5 Extra Costs That Come With Buying a Home

By Josh Smith

We all know that the biggest coat when you buy a home is the home itself but when you buy your fist home you'll quickly find a collection of additional fees that can add up fast. The prices will vary from city to city, but most first time homebuyers can expect these extra costs.

5 Extra Costs That Come With Buying a Home:

Earnest Money - $500

When you get ready to make an offer you will need to give the seller's realtor a check to show you are serious about buying. This amount will usually be in the neighborhood of $500, but could be higher in higher home price areas. This amount goes toward your home purchase.

Home Inspection - $500 to $1000

After the seller accepts your offer you will need to have a home inspection performed. This isn't required, but you would be a fool to pass on this service. If a home inspection finds my major issues you can ask the seller to fix the problems or reduce the purchase price.

Typically you, the buyer, pays for this service and the cost varies based on the inspections requested and the size of the house. When you call to schedule, ask for a bundle discount.

You may need to hire an HVAC specialist to check out the furnace and air conditioner closer. A closer look may cost $80 to $300 depending on what you need and local rates. Again, if this inspection turns up issues the seller can be asked to pay for the repairs.

Utility Deposits - $200 and up

If you don’t already have a relationship with water and gas utility providers you may be required to put down a deposit of $200 or more. In our case the water department is holding on to $200 for two years because of the large number of defaulting payments. Annoying? Yes. Required? Yes.

Closing Costs - $2,000 and up

While you can ask the seller to cover closing costs it only serves to inflate the price you pay for the house. If you can pay the closing costs on your own you’ll be in a better place. Costs will vary based on the value of the property and bank you use. When shopping for a mortgage the bank should be able to provide some estimates based on the home price range you are looking in.

Home Insurance - $500 and up

You were probably planning on home insurance already. But were you planning to pay the whole year up front? Depending on the bank and the purchase process you may need to pay for the first year of home insurance up front. This price will range based on your home and posessions, so shop around. You should start with an insurance company you already use, to ask for discounts.

To find out what all of these costs will be in your city, ask your realtor. A good realtor will be able to answer all of these questions in the first meeting. If your realtor has no clue, find another. If you don't have a realtor and these costs are all news to you, you should look into getting one.