What Are All the Costs of Buying a Home?

What Are All the Costs of Buying a Home?

If you’re thinking about buying a home, one of the most common questions we get is: what does it actually cost?

Most people immediately think about the down payment—but that’s just one piece of the puzzle. There are a few other costs to plan for so you can move forward with confidence and no surprises.

Earnest Money

This is your “good faith” deposit when you submit an offer on a home, and is typically 1% of the purchase price. It is due to be paid within 2 business days of your accepted offer. 

It shows the seller you’re serious and is typically applied toward your down payment or closing costs once you move forward with the purchase.

Down Payment

This is usually the biggest expense buyers think about.

Depending on the loan program, it can vary quite a bit—anywhere from 0% to 20% or more. The right option really depends on your goals, timeline, and financial picture.

Closing Costs

These are the most commonly overlooked costs and an important one to understand.Closing costs typically range from about 2–4% of the purchase price and can include:

• Loan fees from your lender
• Title and closing services
• Appraisal and credit report
• Prepaid items like property taxes and homeowners insurance
• Commission and/or broker fee to your Realtor/Brokerage  

The good news is that in some cases, buyers can negotiate for the seller to help cover a portion of these costs.

Home Inspection

This is usually paid upfront, and can cost anywhere from $400-$800 depending on the inspector, size of home, and any add-ons like a radon test. It is an important step in the process. 

A home inspection helps you understand the condition of the home before you move forward, so you can make informed decisions and avoid unexpected issues.

Moving & Set-Up Costs

This is one many buyers don’t think about until later. Moving expenses, utility setup, furniture, or small projects once you move in can all add up, so it’s good to plan for these ahead of time.

A Few Things to Keep in Mind

Every situation is different. There are loan programs, assistance options, and negotiation strategies that can help reduce your upfront costs depending on your situation. That’s why having a plan upfront makes such a difference.

If you’re even starting to think about buying, we’re happy to walk through the numbers with you and map out what this could look like based on your goals. The Sandy Erickson Real Estate Team is here to help you every step of the way.