Plan on paying a variety of closing costs when buying a new home, typically due at the time of service provision. Some sellers may negotiate with buyers to cover some of the closing fees, but other buyers may find that they have to spend this money out of their own pocket.
Some of the common costs that arise when buying a home include:
Origination fees
The origination fee is accrued when filling out the application for the mortgage. This is paid to the mortgage lender and is typically required early on in the buying process. This fee may include other charges, such as the survey fee, title search, and cost for the appraisal.
Land survey
Surveys are usually warranted when borrowing money to buy a property. Banks want to see documented proof of the boundaries and demographics of the property, and this occurs during a land survey. Survey costs vary depending on many factors, but typically cost a few hundred dollars. (for information on land surveyors, contact DC Gohn Associates Inc Surveyors & Engineers)
Appraisal
Buyers have to get the property appraised to determinate the value of the property to satisfy the bank or lender that is helping buyers with their financing.
Title search
A title search eliminates the possibility that you are paying money for a piece of property that the seller can't actually sell. A title search involves making sure the owner actually does own the property, as well as if there are any liens or claims against it.
Credit report
Buyers will likely be faced with the cost of a credit report, detailing their credit history. This will be done during the initial phase of financing, and may be included in some buyer's origination fees.
Home inspection
The home inspection is required by lenders to ensure they are not giving you money for a lemon. A qualified inspector will walk through the home and report back any issues or problems that are found. This would include issues with the plumbing, heat, roof, pests, potential dangers, and whether the property is structurally intact.
Legal costs
Buyers do benefit from the legal expertise of a real estate lawyer during this process, but this will cost. The primary advantage is that the buyer has an expert looking out for their best interests during the transaction, and to identify any contractual issues or errors.
Real estate buyers can expect to pay a number of fees at the time of closing. With some savvy negotiation, some buyers may be able to get some of these fees paid for by the respective seller. However, if it isn't agreed upon and isn't written into the purchase agreement, then it falls on the shoulders of the buyer to pay up.
