Fees to be Aware of When Purchasing a Home
Purchasing a home is arguably one of the biggest financial decisions you will make in your lifetime. As you start your hunt, don't forget there will be other costs associated with your purchase along with the price of the home. Here are 5 fees to keep in mind as you begin to budget.
- Home inspection. This is a crucial step in the home buying process. The findings that come from the home inspection can help you negotiate price and repairs. Generally, you can expect to pay between $400 to $700+ depending on the home, size, and the location. If your lender requires a 4 Point & Wind Mititgation report, those are additional costs. You may choose to have additional inspections for pests, radon, mold, pool, and more.
- Title services. Title services encompass the transfer of the title from the seller and a thorough search of the property’s records to ensure no one will pop up with a claim to the property. Additionally, you may need to buy title insurance which will protect the lender or your investment in the home. In different areas of SWFL it’s common for the sellers to pay for buyer’s title, others areas the buyer usually pays. Important to know to anticipate a higher fee.
- Appraisal fee. Before getting a loan, you will likely be required to get an appraisal of the home to determine its estimated value. This will be conducted by a third-party company and the cost can land anywhere between $400 and $1,000, depending on the size of the home.
- HOA fees. Many communities have a homeowners’ association that enforces monthly fees. This money is used for general maintenance and updates to areas like pools, parks, and more. In SWFL there are many communities which have several additional fees associated with the property. There may be a master HOA, and a property HOA, assessments, mandatory club fees, and there may be a transfer fee which can be a few hundred or several thousand dollars.
- Taxes. The taxes each buyer pays at the closing table differ, but it is not uncommon for it to be up to two months’ worth of county and city property taxes. Additionally, there may be taxes for the transfer of the home title. When purchasing a property in SWFL, the home will be reassessed after purchasing so the taxes will most likely fluctuate from what the current owner pays so don’t rely on their tax bill. Since Florida offers homestead exemptions, your taxes will vary based on your particular use of the property- claiming as your primary residence or using it for another purpose such as a second home or rental property.
When financing your purchase, it’s a great idea to contact a reputable mortgage lender before viewing homes. This way you'll be prepared of the costs involved along with knowing what amount you're qualified for and comfortable with.
