The Costs of Buying Home

Earnest Money

1% of the sales price is customary, but earnest money is a negotiable term. The earnest money is credited to the Buyer at closing as a portion of the down payment or closing costs. Earnest money is refundable if the buyer backs out during the option period.

Option Money

The amount is negotiable, but generally ranges from $100-500. The option period gives you time to have the property inspected and negotiate any repairs/credits. It also gives you the right to terminate the contract and receive your earnest money back.

Inspection

During the option period it is recommended that you hire an inspector to look at the property. The majority of the time on a home under 3,000 square feet, an inspection will run around $350-$500. You should also have a pest/termite inspection completed, usually around $100.

Appraisal

An appraisal of the property typically costs between $450 – $550. You will need to pay your lender/appraiser for this prior to the completion of the appraisal.

Survey

If the Seller does not have a usable survey, the survey is typically purchased by the Buyer. A survey will typically cost around $500-$700.

Closing

Closing costs consist of mostly loan items, title fees, and sometimes taxes. The total amount generally falls between 2-3% of the purchase price. These costs will be paid at closing along with your down payment.