How to Avoid Sticker Shock at the Closing Table When Buying a House

Make sure that you are familiar with these fees and have budgeted for these home buyer costs.

• Downpayment - This is the most common fee that homebuyers are familiar with. Typically downpayment expenses run around 3.5% to 5% of the sales price, but there are options for 0% downpayment loans. Some homebuyers believe the myth that you need 20% down to purchase a home. The truth is that there are programs that make it possible to buy a home with no downpayment, if you and the property both meet the loan requirements. The best way to find out home much money you will need for your down payment is to talk to a mortgage lender. You can fill out the form on our loan pre-approval page for Colorado Springs to get this process started if you are at that point now.
• Earnest Money - Earnest money is not necessarily a fee, but it is something to be aware of because you will need the funds ready when you put in a contract on a house. Earnest money is basically a buyer’s proof that they “earnestly” want to http://www.greatcoloradohomes.com/uploads/agent-1/Don't-Be-Surprised-By-Homebuying-Fees-3.jpgpurchase the home. A purchase contract is a great start, but there needs to be some cash involved to protect the sellers interests while they take their house off of the market. In Colorado Springs, earnest money is usually around 1% of the purchase price of a home. A home priced at $250,000 would typically ask $2,500 for earnest money. This $2,500 is credited back to the buyer at closing.
• Closing Costs - This is usually the second largest out-of-pocket expense for a home buyer. I will break down these closing cost in more detail below, but I wanted to add it to this section because it should never be overlooked. Most of the fees involved in closing costs are associated with the preparation of your mortgage.
• Moving Expenses - This is an expense that seems to be rising every year. The cost of moving is dictated by the amount of items and the distance that you need to move. It’s not uncommon for homebuyers moving across the country to spend well over $10,000 in moving expenses. First-time home buyers typically don't have as many possessions and can usually move with much less expense.
• Home Inspection - The home inspection is technically an optional fee, but I would never recommend skipping this very important home buying step. In most states, our real estate contracts offer an inspection period for the homebuyer to have the property inspected by a professional. The real estate inspector will determine whether there are any problems that need to be addressed before moving forward with the home purchase.In Colorado Springs, this fee is usually around $300-$500, depending on the size of the home. There are also specific inspectors who specialize in certain parts of the home. You may also need to hire an additional inspector who specializes in one of the following industries below, based on the home you are buying:

How to Avoid Sticker Shock at the Closing Table When Buying a House

Neal Paskvan is a full time Realtor specializing in Downers grove, Darien,Woodridge, Westmont and Du page county Real Estate