Clients always ask what initial expenses they need to cover when buying a home.
This list of deposits, fees and closing costs will answer some of those questions. Your Realtor and loan office will be able to provide much more specific information to you based on the home you want to buy and the type of loan you are using, but this list is a great guideline to get started.
Initial escrow deposit– Buyers using the As-Is contract in Florida need to place an initial deposit of about 1% of the cost of the home into an escrow account within 3 days or less. This money will be held in an escrow account and go toward the buyer’s portion of closing costs. It’s important to note this money could be forfeited to the sellers if the buyers do not adhere to the terms of the contract.
Inspection fees– Buyers should always have a home inspection performed by a state licensed and certified home inspector along with a Wood Destroying Organism (WDO) inspection. Pricing will vary depending upon the size and age of the home.
Appraisal fee– If you are getting a mortgage your lender will want to get an appraisal of the property to ensure the home’s value is at least the amount of the sales contract price.
Closing costs and prepaid expenses– Buyers are responsible for a portion of the closing costs which include things such as title fees, taxes, recording fees, insurance premiums and more. If they are getting a mortgage they will most likely have to prepay a few months of insurance premiums and taxes. Your lender will provide a more accurate description and estimate of the fees involved when you apply for a mortgage.
Kelly Harden, Realtor®
Mihara & Associates, Inc.