Up-Front Expenses When Purchasing a Home

Financial

If you’re in the market for a new home, there are plenty of details to consider before making such a significant purchase. Whether you’ve just started browsing smithfield va real estate or have been searching for the perfect house for months, it’s important to keep in mind what you need to have on hand. When you’re prepared for the up-front costs of purchasing a home, you’ll be able to act quickly when you want to make an offer, especially in a competitive market.

Earnest Money Deposit

Before you start looking seriously for a potential purchase, it’s a good idea to have your down payment and closing cost funds readily accessible. Once your offer is accepted, you’ll need to put down an earnest money deposit. While the amount can vary based on many factors, the more you can put down right away, the more solid and attractive your offer will be. Regardless of the final number, this amount is typically fully refundable in the event that the sale doesn’t go through.

Home Inspection Fee

It is the buyer’s responsibility to pay for a home inspection. Fortunately, you can shop around for the right choice based on price, availability and services offered. This is a non refundable fee that must be paid out of pocket. However, it’s almost always required and is certainly an investment that will likely work in your favor.

Appraisal Fee

In addition to an inspection, your lender will require an appraisal to determine the true current value of your potential new home. In general, this is usually advantageous for the buyer, as it offers protection from overpaying for the property. This is also a nonrefundable fee, but you can save some cash by making sure the house is fully functioning and any updates are complete. Otherwise, you may have to pay an additional fee for a second visit from the appraiser.

Having the cash on hand for these out-of-pocket expenses can help make the home buying process a much easier one. Talk to your realtor today so you can be fully prepared.