Typical Costs to Buy a Home
Piedmont Preferred Realty, Inc. serves real estate buyers in Chapel Hill, NC;
Buyer usually pays for:
· Appraisal (usually costs $300-$350) and is usually paid when ordered by lender, but may be paid at closing.
· Home Inspection (cost varies with size of property, but a general range for a 1,200- 3,500 square foot home is $300.00- $450.00.It is usually paid upon delivery of services or soon thereafter, but may sometimes be paid at closing.
· Survey (cost varies with the size of the property)- Buyer may elect to waive a current survey if lender does not require a recent one or if you have access to the survey that was done for the seller. Usually paid upon delivery of services or soon thereafter.
· Wood-destroying insect inspection (a report costs $65-$75) It is often paid at closing.
· Water and septic inspections may be required by the lender if the property uses well water and/or has a septic system and is usually paid upon delivery of services or soon thereafter.
· Closing attorney (usually runs between $350 -$500 for a typical closing) Additional fees from the closing attorney may be for wiring, recordation, or courier fees may also be charged and these are paid at closing.
· Title Insurance ($2/$1000 of purchase price is usually what it costs) and is usually paid at closing. Using seller’s existing title insurance company sometimes gains a discounted rate.
· A buyer’s loan program determines other costs such as: escrow amounts for taxes and insurance, points (1 point equals 1% of loan amount), documentation fees, application fees, credit report cost, etc. These can be negotiable.
· Once a lender has been chosen and he has a buyer’s information he/she is required by Federal law to give buyer/s a Good Faith Estimate, which should be a very close approximation of closing costs, within 72 hours of loan application. If the type of loan selected changes, however, a new Good Faith Estimate should be provided.
· Ad Valorem taxes- cost depends on tax rate and date of closing.
The seller has some cost to sell as well. Seller usually pays for:
· Deed Preparation is paid at closing
· Revenue Stamps (usually $1/ $500 of purchase price) are paid at closing.
· Recordation of the deed is paid at closing.
· Any unpaid mortgage balance/s is/are paid at closing.
· Any unpaid taxes will be paid at closing. This may be show up on the closing statement as a credit to buyer if taxes cannot be paid yet (if it’s prior to Sept 1)
· Any Real Estate commissions are paid at closing.
**This is meant to give a general idea of costs and when these costs are normally paid. The buyer must assume responsibility for getting the more precise costs in his/her particular circumstance. And sometimes a seller will pay some of the closing costs, but that is usually best negotiated up front and asked for by buyer in the offer to purchase agreement. When the cost of closing and down payment appears daunting, don’t forget that only 20 % of the down payment has to be paid by you, the rest can be paid with “gift money”. If gift money is used, the lender will require a letter by the donor stating the gift money amount. With interests as low as they are currently, lenders are offering incredible 3% down loan programs or even 0% down loan programs. Sometimes you can take out a primary mortgage and an 2nd mortgage all at the same time. The possibility of home ownership has never been so achievable.