Are you planning to buy a home? Of course you will have to save money for the down payment, but other than this, you will also have to plan a budget for the other extra expenses that can arise. Since we are aware that you might not know all of these, we decided to give you an average estimate of the most significant ones.
The earnest deposit is included in the down payment, but you have to pay it instantly. Doing this gives the seller evidence that you are a serious buyer and will definitely purchase the property. The average amount for this is around $1000. Some lenders may also ask you to pay 1% of the house price. Once the sales process is over, you will be returned this amount.
Home inspection is also included in the closing costs, but you have to pay this amount beforehand. A home inspection is really important because it can highlight the flaws which your chosen property may have. Home inspections can cost somewhere between $300 and $500.
Considering the fact that most of the homes in inventory are older, chances are the one you choose will need quite a few repairs. This can be dealt with, but we do not recommend that because renovating can be difficult once you have moved in. However, renovations will also have an impact on your budget. Depending on what you need done, you can make a number of home improvements. However, you can estimate them to be almost 1% of the home price.
Moving will incur costs whether you do it by yourself or ask the pros to do so. The latter option may be more expensive, but makes things a lot easier on your part. Even if you choose the former option, you will have to buy new boxes, tapes, and arrange money for the transportation costs.
This is one expense that is never displayed on paper, but is significant all the same. Basically, the seller has to pay fees for both his and your agent, but if this is the case, your sales price will be higher. If the purchase price is not that much, you may have to bear this expense. Agent fees are 3% each (seller and buyer) of the total home price.