Here are the five extra costs to be aware of when purchasing a home.
The costs associated with buying a home can be a little shocking, so being prepared is important. The typical down payment is around 3% to 5% of the purchase price. Once we go under contract, the buyer will make an earnest deposit. An earnest deposit is part of your total down payment and is usually around 1% of the purchase price. Think of this money as a token of good faith.
I usually recommend that you save an additional 2% to 3% of the purchase price for your closing costs. Closing costs include the fees to obtain a mortgage, prorated property taxes, prorated HOA fees, title policy insurance, and fees to transfer the property into your name. Closing costs are a negotiable item; however, in today’s strong seller’s market, I rarely see a seller contribute towards a buyer’s closing costs. We usually see that in a buyer’s market.
In addition to those closing costs, there are some out-of-pocket costs throughout the transaction. These include any inspections that you do in your due diligence period and the appraisal. Depending on the age and size of the home, budget anywhere from $500 to $1,000 for your inspections. The appraisal fee is usually around $500 to $600.
If you’re curious about what it’ll take for you to purchase a home, then reach out to me. I would love to walk you through the process. You can always call me directly at 602-741-7531, or you can send me an email at Team@AZPalmerProperties.com. I look forward to hearing from you.