Money You Can Expect To See & Spend In a Home Buying Transaction
You may or may not know this already, but before you cut the big check for your new digs - there are a few smaller checks we need to write too.
Here at The Tounsley Group, we’re firm believers that educated people make good decisions - therefore it is our mission to educate you on everything we possibly can that’s real estate related.
So in this blog post, we want to dig into a list of different numbers that you can expect to see (and spend) as a home buyer prior to closing!
Money You Can Expect To See (and Spend) in a Home Buying Transaction
Earnest Money
Your earnest money is due the day the contract is fully accepted by both parties. This is good faith money and is money you have a chance to get back if any of your contingencies are not met.
Note: earnest money does have to be signed off by both parties (buyer & seller) on where this money will go, prior to it leaving the title company.
You can expect your earnest money to be anywhere from $1,500-$10,000 depending on purchase price or nature of the transaction. This amount will be credited to you at closing as part of your out of pocket funds.
Home Inspection
Your home inspection money is due at or before inspection - typically less than 2 weeks after you go under contract. The cost depends on the size of the house and if you have any additional add ons.
You can expect anywhere between $450-$550 for the home inspection itself and you might need some add-ons like:
$75-$125 for Radon Test
$100-$150 for Water Test
$225+ for Sewer Line Scoping (3rd Party)
Appraisal
Your lender will order your appraisal through the bank right after you go under contract. They will typically collect this money from you prior to ordering or wrap it into your loan fees at closing.
You can expect your appraisal to be anywhere between $800-900. If for some reason the appraisal needs to be rushed, you can typically expect $1,000+.
Down Payment/Closing Costs
Your down payment and closing costs are due at closing. This will be a certified check made out to the title company in which we will be closing. This is all your costs added together.
Closing costs are your lender fees, your appraisal (if you didn't pay upfront), and the title companies fees. They can be anywhere from 1%-3% of your purchase price.
Your earnest money will be credited to you and deducted from your total amount due. Your lender will give you an estimate of your total out of pocket costs which will be your down payment + your closing costs fees.
While all of these funds are not needed right away, I can’t stress enough how important it is to have them set aside for when you need them!
While I can’t predict all scenarios, what I can do is tell you throughout my experience that having a place for these funds to sit ahead of time takes a lot of stress out of the home buying process and allows you to fully focus on your transaction.
Ready to buy a home in Billings, MT?
Overall, it’s important that you’re aware of all the different numbers that are involved in a home buying transaction. One of the biggest home buying mistakes that I see people make is only focusing on the purchase price. And while that’s of course an important number to pay attention to, there’s so much more that goes into it!
The good news is that when you’re aware of the numbers and you’re working with a solid real estate team, you can go into the home buying process with confidence and peace of mind.
If you’re ready to buy in Billings - whether you're a first-time buyer, moving across town, or relocating to Billings for the first time - I'd love to help you navigate the home buying process.
CLICK HERE to get in touch and let’s find the home that’s best for you in Billings!
