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10 Hidden Fees When Buying A Home

When you’re buying a house, you have the sales price, that’s the amount that you’re paying for the property, but if you think that’s the only thing you’re spending money on, I’ve got some bad news for you. Fees, points, credits, escrow, title, there can be so many extra and hidden fees that you go in thinking one number, and you end up paying a lot more so because of that, in this article I’m going to go through the top 10 HIDDEN costs that people don’t tell you about, or maybe they do, but they’re not as well known as just the sales price. Now, this won’t be about hidden fees once you buy the house and start living in it, more of hidden fees when it comes to acquiring the property. So with that being said, let’s look at the top 10 hidden fees of purchasing a house. 

 

Fee number 1 is the home inspection. Wait, you already know about the home inspection, so why am I including it on the list. Well, what you might not know is that you pay for the home inspection immediately, as opposed to at closing, and the home inspection could cost up to $800 depending on the size of the house. It’s important to use a reputable company and inspector. Some real estate agents will push you to use their inspectors that they have a relationship with already. Be aware of this. You don’t want to wear your tinfoil hat thinking everyone is conspiring against you to cover up items on the home inspection. But at the same time, you probably don’t want your real estate agent to be best friends with your home inspector, that doesn’t look good either. The company that I use is US Inspect. This is not an advertisement for them nor was I paid to say this, I just have used them in the past and they have been very thorough. 

 

Fee number two is the appraisal. A common theme that you’ll notice here is that once you go under contract, you’re going to have to start paying money. Some of the items we’ll discuss are fees at closing, but the appraisal fee is one that is due upfront. The D.lender usually requires this to be an upfront payment because even if the loan does not move forward, the appraiser still needs to be compensated. Expect an appraisal to be approximately $400 – $500. 

 

Fee number three is the Earnest Money Deposit. Now, wait, this one is not so much a fee, as it is money that is due upfront that some may not know about. When you submit your offer, in its simplest form, you’re just sending over a piece of paper to the other side saying that you’ll do something. Well, the sellers need more commitment than that. You got to have some skin in the game.  You need to submit your Earnest Money Deposit, commonly referred to as your EMD with your contract. This is an amount, usually 1. 5% to 3% of the sales price that is put into escrow and is a good faith deposit that you will go through with the contract. The higher your deposit, the stronger your offer. The EMD will end up going towards your closing costs, but it is due upfront when you submit your offer so be sure you and your agent have a game plan and are ready for the EMD at the time your offer is written. 

 

Fee number four is title insurance. Ahh title insurance, everyone’s least favorite real estate topic. The long and the short of it is this: You probably don’t need it. Just like you probably don’t need health insurance for 6 months, you could probably skip on dental insurance for a year. You probably don’t need car insurance for a year. That last one might be a crime now actually, so don’t quote me on that. But if you’re buying property for $400,000, $200,000, or however much money, you need to do what you can to protect your investment to make sure that no other parties could legally take that property away from you. Because if someone has a lien on that property and you don’t have title insurance that found that out, you might be in some trouble. Title insurance is going to cost about at least $1,000 for lender’s title insurance, and then another $1,000 for owner’s title insurance, this is paid at closing. I’m always going to buy title insurance with properties I purchase just to be on the safe side and I will probably not be happy about paying those fees for it. 

 

Fee number five is the county transfer tax. Whenever you buy or sell property in a jurisdiction, that jurisdiction is going to take their cut of the pie. Now it may only be small cut of the pie, maybe just the crumbs, but hey, that’s your hard-earned money so every little bit matters. It’s going to vary by jurisdiction, but a recent $400,000 property my buyers purchased had a County Transfer Tax of $350 and a County Mortgage tax of $300 totaling about $650 in fees. 

 

Fee number six, I’m going to sound like a broken record but it’s now time for the State Transfer tax. States going to get their money too and it’s going to be a little bit higher. Obviously the state transfer tax will differ by state, but here in Virginia using the same $400k property, the state transfer tax came out to $987. 50, which is 25 cents for every $100 worth of property. Or to make it easier, . 0025 of the sales price. Let’s also not forget about the State Mortgage tax, which is about the same percentage before, that. 0025 of the mortgage not the sales price, so of the mortgage. So on that $400k property, we have $987. 50 in-state transfer and $969. 75 in State Mortgage totaling $1,957. 25. That’s almost $2,000 in fees right there. Some states do not have a state mortgage tax so be sure to check in with your local lender to see if these numbers will apply to you. 

 

Fee number seven is property tax. Lots of taxes here. These are paid at closing and are usually pro-rated for half the year because around here most jurisdictions require you to pay property taxes bi-annually. You can easily look up your city or county’s property tax by going on your jurisdiction’s property tax website. One thing to know is that property taxes are based on the value of the home. So if the sales price you buy your house is more than what it was last sold for, which is usually the case, your property taxes will be going up in the future. 

 

Fee number eight is your homeowner’s insurance premium. The average homeowner’s insurance premium is about $1,000. Unless you’ve done something differently, you can expect to pay this at settlement. Remember, all jurisdictions could be different so be sure you’re in touch with your lender and settlement company to see which items are billed at settlement. 

 

Fee number nine is your HOA transfer fee. If you a purchasing in an HOA, a fee may be due at settlement. And that fee could be up to $300. What does it go towards? Setting up your account, putting you in the system, and that’s about it. If you’re like an HOA president or treasurer or something you might get mad at me for this part but it’s basically a couple of hundred bucks that you’re going to pay and not really get anything back of value. It is what it is. 

 

Fee number 10 is the title services. These are things like the settlement fee, the title abstract, the title insurance binder, and the title closing protection agency. And you can look up all these title fees on your own. That’s not the point of listing them out. The point of listing them out is that this is an additional $550 on top of all the other fees that we’ve covered. And maybe you’ve come across companies or maybe you’ve thought to yourself that you’ll negotiate with the title companies and get them to waive their fees but that’s how they make money. There’s one title company in my area. I think they charge a flat rate of $250 to close. And you need to ask yourself. Do you really want to get the cheapest real estate attorney out there? You’re buying a home. Do you really want to try to save $50 or $100 to get the least expensive company? Title companies have their fees. Some are higher than others. 

 

Try to get a few good recommendations before choosing a title company. Most of the settlements I do now are split settlements where the buyers have their title company and the sellers have. Be sure to do your research because like most things, even real estate attorneys, you get what you pay for. And bonus, we have a bonus hidden fee. The 11th hidden fee when buying a house is for condos and that is your condo move-in fee. I will put in another disclaimer that this will vary by condo and by association. But many condos include the move-in fee at closing. This is going to be anywhere from $100 to in some cases $700 to move-in. If you’re purchasing a condo, your move-in fee, if you have one, is probably going to be anywhere from $100 – $300. There you have it, the 10, or make that 11 hidden fees to buying a house.

Your Favorite Realtor – Nicole Anthony – Keller Williams Realty
Browse our Chattanooga homes for sale listings.

Categories
Real Estate

How To Determine If Your New Neighborhood Is Safe 

 

A neighborhood’s security should be an absolute priority when selecting your dream home. It is crucial to research to make sure you feel secure in your new area. Before you buy your new home, you’ll want to try to eliminate as many dangers as possible. Try these tips to ensure your comfort and safety. 

Take A Walk or Drive Around The Area 

By driving or walking, you can feel the environment and a sense of what it provides. Some attributes a safe neighborhood would apply are 

-Local Business: Does your community have family-owned restaurants, ice cream shops, and bookstores? Money spent in the neighborhood is a great sign of prosperity. When people are or feel secure financially, they are often more likely to help the community grow and thrive. 

-Neighborhood Watch Groups: If your new locale has a neighborhood watch group, it shows the pride and pleasure the people take in the community. Most of the time, a small group of people will take the initiative to start it up to protect the neighborhood and report any suspicious activity. 

-Local events: Whether there are farmer’s markets or block parties, community events are a near-perfect way to bring families together. The more active and engaged in the area is, the safer you’ll feel living there. 

Use A Crime-Mapping Service

Sites like SpotCrime and CrimeReports collect crime reports and police information. You can simply type the address of your dream home and review all reported crimes in that area. These sites break down the types of crime committed and the dates they were committed. A good tip is to compare this crime rate to surrounding areas or neighborhood crime rates. It’s also important to keep in mind that these crimes may or may not paint out the entire neighborhood’s picture. In a smaller community, crime rates may rise due to the small number of people living in that area. 

Connect With People Who Currently Live There

 One of the best and most effective ways to research a neighborhood is to connect with those who live in that area. Your future neighbors will have the best information and insight on what goes on in that community. This strategy is not only good for determining safety, but if this neighborhood truly fits your lifestyle. You typically wouldn’t want a neighbor who sings late at night with a garage band. 

It may feel awkward or intimidating, but knocking on your new neighbor’s door can be very favorable. You want to be comfortable with these people and have them be comfortable with you to live safely and happily in your neighborhood. What may be gossip, could be handy to get a good insight into the safety of the neighborhood.

The security of your neighborhood should be a great priority when selecting your brand new dream home. Do a bit of research and spend some time in your neighborhood before continuing your purchase. It will help you with understanding the safety of the community and if you fit in. Buying a new home is a great commitment and you want to make sure you are making the best decisions you can.

Categories
Real Estate

The Importance of Dealing With a Professional When Selling Your Home

If you either want to buy a new home or sell one that you own, you could probably make the sale on your own. You can sell it to a friend or relative and still get paid. However, you would have missed out on a ready market that would have paid a better price for the home. This is simply because you were not aware of the market out there that is willing to pay more than you got for the property.

Real estate agents provide professional service for you if you have a house for sale. They are exposed to a vast market that is willing to pay any amount to purchase the home from you. Their professional services are also ideal because they will be with you until the buyer makes the final payment for the house.

What real estate agents do

As a homeowner seeking to sell their home, navigating the market might not be the easiest task. You will have quite a several challenges coming your way especially if you are not a professional nor are you experienced in this sector. One reason is probably that you might not be able to realize the best time of the year that you can put your house up for sale in Chattanooga and get the best price for its sale.

You should be aware that the market reacts differently during different times of the year when it comes to purchasing a new home. This is probably why there is stiff competition at some point of the year than during another point of the year. If you do not have a few tricks up your sleeve to help you make a good sale for your home, you might have to offload it at a much lower price than it should go for.

Professional real estate agents in Chattanooga are skilled and experienced when it comes to selling homes. They can do this even if you are desperate and would want to sell the home during an off-peak season so that you can cover an expense such as medical bills for a loved one. Professional real estate agents can take advantage of the market during whatever season of the year and will make a sale for your new home. They guarantee that their expertise will ensure that both you and their firm win after the buyer pays for the new home. You should seek their services whenever you want to sell such property!

Bottom line

All in all, professional real estate services in Chattanooga provide you with the best services that will get you a fair price for your home. They will list your home among the homes for sale and would use their expertise combined with their experience to sell the home to a ready market. The best thing here is that you would get to sell the home at a far much higher price than you thought it could go for.

Author: Nicole Anthony https://www.charlottemabryteam.com

Categories
Home Inspection Real Estate

How to Reduce the Home Price After the Home Inspection

In the process of finding a house for sale, usually, when the seller agrees to an offer, the buyer orders a home inspection to get to know the actual condition of the property. Since, as a buyer, you are supposed to pay for the home inspection, and it is your right to make sure that everything from the entrance door to the roof, walls, floor, kitchen, and washrooms are in optimum working condition, you also have the leverage to ask for discounts from the seller if the inspection report shows severe damages.

It is perfectly normal for any used house to have some defects and shortcomings when examined by a professional home inspector. If any severe damages are potentially a safety hazard, like leakages, breakages, termites, etc., it is in seller’s interest to solve these issues as the mortgage lender may reject your application based on such a home inspection report, and the whole deal can fall out. In this scenario, it is the responsibility of a good professional real estate agent to get maximum benefit to the buyer by negotiating wisely with the seller or their agent. Usually, the process involves hiring the best local company that does house repairs and get a quote from them on all essential improvements pointed out in the report by the home inspector.

This negotiation that aims to get a monetary concession from the seller’s side has Three possible primary outcomes: Either the seller fixes the repairs or the buyer fixes them and gets paid from the seller, or the seller reduces the price of the house to compensate for repairs. Again, the best possibility can be chosen only after carefully evaluating the terms of the agreement, the home inspection report, and the situation on-ground. The best person to deal with this situation on your behalf is your real estate agent. They have the depth of experience one requires, as they deal with similar issues regularly. Your agent can guide you to choose from the best of these paths in a manner that benefits you most in terms of finance.

Remember, the seller never agrees to all repairs as most of them are either not of an urgent nature or do not pose any imminent structural danger to the building. Therefore always expect a compromised solution to this price reduction negotiation. If the possession date is near, it is in the interest of the seller to accommodate the cost for repairs in the house price and save the hassle. If the discount or cash-back is enough, this may also be a sweet deal for you. On the other hand, if there is no urgency, the sellers can agree to do the repairs on their own, which is a more beneficial option as they would control the cost. If you, as a buyer, take on the challenge of repairs, you can hire the best professional repair company, which would obviously cost more and hence not a favorable option for the seller. Whatever mode you choose for the implementation of the house inspection report to reduce the price of the home, try to keep the negotiation as fair as possible, otherwise it can, in some cases, lead to a fall out of the whole deal and you would have to start fresh looking at other homes for sale.

Article by: Desmond Thornton https://thorntonhomeinspections.net