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10 Home-Buying Costs You Need to Know About

Posted by admin on May 28, 2014
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If you’re a first-time home buyer, you might get a little queasy when the last line of your good-faith estimate comes in at several thousand dollars. And after the color returns to your face, you might also be a little more than perplexed by some of those fees.

Knowing what you’re paying for—like these 10 common costs—can ease that check-writing pain.

1. Earnest money

To prove you’re “earnest” in your purchase commitment, expect to plunk down 1% to 2% of the total purchase price as an earnest money deposit. This amount can change depending on market factors. If demand in your area is high, a seller could expect a larger deposit. If the market is cold, a seller could be happy with less than 1%.

Other governing factors like state limitations and rules can cap how much earnest money a seller can ask for.

2. Escrow account

An escrow account is basically a way for your mortgage company to make sure you have enough money to cover related taxes and mortgage insurance. The amount you need to pay varies by location, lender, and loan type. It could cover costs for a few months to a year.

Escrow accounts are common for loans with less than a 20% down payment and mandatory for FHA loans, but it’s not required for VA loans.

3. Origination

The origination fee is a hefty one. It’s the price you pay the loan officer or broker for completing the loan, and it includes underwriting, originating, and processing costs.

The origination fee is a small percentage of the total loan. A typical origination fee is about 1%, but it can vary. Use your good-faith estimate to shop around.

4. Inspection

You want to be assured your new home is structurally sound and free of surprises such as leaks or pests living in the walls. Those assurances come with a price.

Home inspection: This is critical for home buyers. A good inspector will be able to notify you of structural problems, flooding issues, and other potentially serious problems. Expect to pay $300 to $500 for a home inspection, although cost varies by location.

Radon inspection: An EPA-recommended step, this inspection will determine whether your prospective home has elevated levels of the cancer-causing agent radon. A professional radon inspection can cost several hundred dollars.

Pest inspections: Roaches are one thing. Termites are a whole different story. Expect to pay up to $150 for a termite inspection.
5. Attorney

Some states, such as Georgia, require an attorney to be present at closing. In some other areas, this is optional. If you use a lawyer, expect to cover the costs, which vary by area and lawyer.

It’s typical for mortgage companies to have a lawyer on their end, although they should cover the bill.

6. Credit check

Just because you can get your credit report for free doesn’t mean your lender can (and it will actually pull all three). You have to reimburse the lender, usually around $30.

7. Extra insurance

If you live in a hazard-prone area, you might need to purchase extra insurance, like for flood.

8. Appraisal

Your lender won’t loan you money for a home without knowing what its fair market value is. An appraisal will cost $200 to $400, depending on location and property size.

9. Title company

You pay this to the title company to make sure the property’s title is free and clear. Your lender will recommend a title company, but you can also shop around for one.

10. Survey

It’s not required in all instances, but your lender may require a professional surveyor to determine exactly where your property lines are drawn. Prices vary widely, but expect to pay at least $100.

Remember: You have bargaining power. Shop around to get a feel for what rates and fees apply in your area. If you aren’t sure what a lender is charging, ask for an explanation—the charge might not be set in stone. If you’re unhappy with a charge, negotiate.

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    Paul M.

    “Craig, I would like to thank you for your expertise in helping me along with the Mies Family Trust in selling the rental properties located in Long Beach and Costa Mesa. These transactions went very smoothly and professionally.” I would also like to thank you for assisting the Mies Family Trust in the acquisition of the 8 unit apartment building in Santa Ana. Every year this building has proven to be a winner for the Trust with some great cash flow. Since acquiring this building, we have been able to refinance and pull out some built up equity and purchase a 10 unit building in Long Beach in which you assisted.

    All of our transactions over the years have gone very smoothly and I look forward to working with you again in my next real estate transaction. I will also continue to recommend you to my clients.”


    Paul M.
    2016-10-29T19:08:21+00:00
    “Craig, I would like to thank you for your expertise in helping me along with the Mies Family Trust in selling the rental properties located in Long Beach and Costa Mesa. These transactions went very smoothly and professionally.” I would also like to thank you for assisting the Mies Family Trust in the acquisition of the 8 unit apartment building in Santa Ana. Every year this building has proven to be a winner for the Trust with some great cash flow. Since acquiring this building, we have been able to refinance and pull out some built up equity and purchase a 10 unit building in Long Beach in which you assisted. All of our transactions over the years have gone very smoothly and I look forward to working with you again in my next real estate transaction. I will also continue to recommend you to my clients.” Paul M.

    Ken E.

    “Craig Wise did a great job in selling my rental property. He provided me with quality information about pricing it correctly, advertised and marketed it effectively, and provided solid guidance in negotiating a sales price. Craig was extremely professional in handling all aspects of my sale and got me top dollar for my property after only being on the market a few weeks. Craig will be my realtor for any future real estate needs.”


    Ken E.
    2016-10-29T19:08:59+00:00
    “Craig Wise did a great job in selling my rental property. He provided me with quality information about pricing it correctly, advertised and marketed it effectively, and provided solid guidance in negotiating a sales price. Craig was extremely professional in handling all aspects of my sale and got me top dollar for my property after only being on the market a few weeks. Craig will be my realtor for any future real estate needs.” Ken E.

    Estella G

    “I have known Craig Wise for over twenty years on both a personal and business level. Craig has done a phenomenal job in building a loyal list of clients and a very professional image. Craig’s success stems from his ability to keep his client’s needs a high priority and consistently meeting expectations, even in the toughest markets.

    My house was recently sold by Craig in only 2 weeks. He thoroughly impressed me with his tenacity and dedication in finding me a single story home in this challenging market.

    Craig is an ideal realtor, he is a savvy yet humble individual, has a very energetic work ethic, is always eager to go above and beyond for his clients.”


    - Estella G
    2016-10-29T19:10:18+00:00
    “I have known Craig Wise for over twenty years on both a personal and business level. Craig has done a phenomenal job in building a loyal list of clients and a very professional image. Craig’s success stems from his ability to keep his client’s needs a high priority and consistently meeting expectations, even in the toughest markets. My house was recently sold by Craig in only 2 weeks. He thoroughly impressed me with his tenacity and dedication in finding me a single story home in this challenging market. Craig is an ideal realtor, he is a savvy yet humble individual, has a very energetic work ethic, is always eager to go above and beyond for his clients.” - Estella G

    Wally L.

    “I had the pleasure of working with Craig while searching for a rental home for my family in South Orange County. As this was a new process for my wife and I, it was great to finally find a real estate professional that genuinely cared about us and our needs. Craig went out of his way to answer questions, solve issues when they arose, and step us through the necessary paperwork. He was always on time and had a wealth of knowledge to share with us. I would highly recommend Craig and will be using his services in the future.”


    - Wally L.
    2016-10-29T19:06:51+00:00
    “I had the pleasure of working with Craig while searching for a rental home for my family in South Orange County. As this was a new process for my wife and I, it was great to finally find a real estate professional that genuinely cared about us and our needs. Craig went out of his way to answer questions, solve issues when they arose, and step us through the necessary paperwork. He was always on time and had a wealth of knowledge to share with us. I would highly recommend Craig and will be using his services in the future.” - Wally L.

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    “I cannot tell you how happy I am to enthusiastically recommend the services of Allwest Properties.

    Allwest made it possible for our rapid expanding law firm to relocate to a much larger office space. We chose Allwest not only for their expertise in the industry, but the personal level of service they provide, as well as expert negotiation skills. They not only negotiated a cost effective lease rate for our new space but also received an allowance to cover the rent on the remaining lease term for our existing space -- well above our expectations.

    Their knowledge, extensive experience, responsiveness, familiarity with this areas commercial real estate and network of related professionals make them the ”go to professional” to get things done. The process could have not gone any better! I am fully convinced that if they have not been involved, none of this would happen.”

    - Newport Trial Group
    2016-10-29T19:02:51+00:00
    “I cannot tell you how happy I am to enthusiastically recommend the services of Allwest Properties. Allwest made it possible for our rapid expanding law firm to relocate to a much larger office space. We chose Allwest not only for their expertise in the industry, but the personal level of service they provide, as well as expert negotiation skills. They not only negotiated a cost effective lease rate for our new space but also received an allowance to cover the rent on the remaining lease term for our existing space -- well above our expectations. Their knowledge, extensive experience, responsiveness, familiarity with this areas commercial real estate and network of related professionals make them the ”go to professional” to get things done. The process could have not gone any better! I am fully convinced that if they have not been involved, none of this would happen.” - Newport Trial Group

    Gina G.- Chomp Chomp Nation

    Craig has a broad skill set which has resulted in successful site selection based on short and long term brand strategies. Craig is a superior negotiator and expert in commercial leasing which have a dramatic effect on the bottom line of any growing business. Craig’s business acumen and integrity are second to none.

    - Gina G.- Chomp Chomp Nation
    2016-10-29T19:03:36+00:00
    Craig has a broad skill set which has resulted in successful site selection based on short and long term brand strategies. Craig is a superior negotiator and expert in commercial leasing which have a dramatic effect on the bottom line of any growing business. Craig’s business acumen and integrity are second to none. - Gina G.- Chomp Chomp Nation

    Sharon C.

    “Craig, I want to Thank you so very much for all the help you gave me while I was settling my mom’s estate. Living on the East coast I couldn’t be in California all the time, but you went far and beyond what a Realtor is expected to do. I couldn’t have done it without your expertise and help in selling the condo in Escondido and my parents home in Laguna Niguel. You made a sorrowful time much easier. And being able to talk to you made the problems a little better. I am very happy that I can call you a true friend. I would recommend you to anyone in Orange county that is looking for a very professional and caring Realtor.”

    -Sharon C.
    2016-10-29T19:05:10+00:00
    “Craig, I want to Thank you so very much for all the help you gave me while I was settling my mom’s estate. Living on the East coast I couldn’t be in California all the time, but you went far and beyond what a Realtor is expected to do. I couldn’t have done it without your expertise and help in selling the condo in Escondido and my parents home in Laguna Niguel. You made a sorrowful time much easier. And being able to talk to you made the problems a little better. I am very happy that I can call you a true friend. I would recommend you to anyone in Orange county that is looking for a very professional and caring Realtor.” -Sharon C.

    John T.

    “Craig is detail oriented and looks out to protect the interests of his clients. He’s professional, courteous and cooperative. He would be a great person to have on your side.”

    - John T.
    2016-10-29T19:05:54+00:00
    “Craig is detail oriented and looks out to protect the interests of his clients. He’s professional, courteous and cooperative. He would be a great person to have on your side.” - John T.

    Robert B.

    “I count it a great privilege to recommend Craig Wise for any of your Real Estate dealings. I first became acquainted with Craig as we worked side by side in the Real Estate Department of a major lender. During the fifteen years we have know each other we have gone from coworkers to good friends. I have always know Craig to deal with people with the utmost of character. This is the reason that when my son and daughter-in-law were first time buyers and I asked Craig to assist them through the entire process and he made sure the transaction went smoothly. You will not find someone who combines knowledge, skill and integrity to a greater degree than Craig.”


    - Robert B.

    2016-11-02T21:48:42+00:00
    “I count it a great privilege to recommend Craig Wise for any of your Real Estate dealings. I first became acquainted with Craig as we worked side by side in the Real Estate Department of a major lender. During the fifteen years we have know each other we have gone from coworkers to good friends. I have always know Craig to deal with people with the utmost of character. This is the reason that when my son and daughter-in-law were first time buyers and I asked Craig to assist them through the entire process and he made sure the transaction went smoothly. You will not find someone who combines knowledge, skill and integrity to a greater degree than Craig.” - Robert B.

    Chris Z

    Craig - thank you, I sincerely appreciate your dedication to getting things accomplished with the commercial association. You showed great fortitude given the difficult personalities over the years and I thank you for everything you have done

    - Chris Z
    2016-11-15T05:27:27+00:00
    Craig - thank you, I sincerely appreciate your dedication to getting things accomplished with the commercial association. You showed great fortitude given the difficult personalities over the years and I thank you for everything you have done - Chris Z