Carter: If you’re considering buying a house within the next three to six months, but you have no idea what it’s going to cost you, please watch this video and I’ll break it down for you. And before I forget, if you have any questions, just something that you’re wondering about and you need to get into contact with a lender, shoot me a message right now and I’d be more than willing to connect you with anyone that you so desire. But let’s break this down. So the cost of buying a house.
What are the first initial costs before closing? We’ll kind of break that down. The first one, and I’ll abbreviate it for everyone, is going to be earnest money. And that’s typically a good faith deposit that you’re going to buy the house. In a first time home buyer sense, that ranges from $500 to $1,000. So that’s the first initial cost. Earnest money is typically due within five to seven days of an offer being accepted. You don’t need the money right up front, but you will need it within five to seven days.
The next cost is going to be the home inspection. Home inspection, that’s done within typically 21 days, give or take a little bit. With the home inspection, it depends upon the size of the house, if there’s any outbuildings, everything like that. A typical cost is right around 325 bucks. So those two initial things will be the out-of-pocket money, due within the first say typically 21 days of your offer being accepted, depending upon the scenario.
The home inspection, obviously that’s nonrefundable if the offer does not go through, can’t do anything like that. Earnest money, again depends upon the scenario. You might get that back. You might not. It really depends on how your agent’s able to solve that.
Now going further into the transaction, there is always if you’re getting a loan, an appraisal fee. There’s lender fees, everything like that. I am going to sum it up into closing costs. Closing costs, depending upon the price of the house, will include all those fees, the lender fees, the appraisal fee, the loan fee, everything like that, and also taxes, insurance because they can escrow for that. So if they’re escrowing for everything, I would say between three to four thousand dollars. If you don’t have them escrow for everything, then you’re talking on the cheaper side of things, probably $1,500 to $2,000. Again, talk to your lender. If you need a reference or a referral to a lender, just let me know. Again, shoot me a message.
But closing costs, we’ll just say to be broad is three to four thousand. Three to four thousand for closing costs. With that, you can ask the seller to pay for it. So this is typically one of the only things that you can ask a seller to pay for. They’re not going to pay for your home inspection, definitely not going to pay for your earnest money because it’s your good faith deposit. But you can ask the seller to pay for your closing costs.
So along with closing costs, the last fee that you might face is just your down payment. And again, depends on your loan type. If you’re a veteran, probably going to have 0% down. You might get money back at closing, depending upon how you structure things. If it’s an FHA loan, three-and-a-half percent, conventional loan 3, 5, 10, 20 percent. Really, talk to a lender. They’re going to advise you on what your down payment or what the best strategy is going to be.
If you don’t have a lot of money for a down payment or you want to do a lesser down payment so you have money for repairs, structure things so it’s most beneficial for you. Again of course, if you have questions, ask me, ask a lender. And if you don’t want to do this on your own, if you are like, “I just can’t comprehend doing this by myself, buying a house, navigating the process,” shoot me a message. I would be more than happy to assist and guide you through the process.
I appreciate you guys watching and have a great day.