At the end of an escrow transaction, buyers will have to pay regular closing costs. Understood as the cost of doing business, closing costs cover things like the VA funding fee (military VA loan buyers), document preparation, title and escrow fees, etc. During a transaction, additional outside of costs will often come up that prospective buyers should be aware of. The following is a list of just some of the more common costs.
Home Inspection / Approximate costs start at $350+
During the first couple of weeks is the general inspection contingency period, at this time buyers will independently hire a licensed home inspector to thoroughly inspect the property for defects. The inspection is generally a surface inspection, no walls, appliances, or furniture are moved. A brief walkthrough of the home’s discrepancies is provided to the buyers, along with a summarized report. This service paid at the time of appointment and is calculated generally by the size of the property. This is an optional expense, although highly recommended.
HVAC Inspection / Approximate costs start at $300+
If a home has central AC, it’s highly recommended that a buyer order an HVAC inspection from a certified company. This is another inspection that happens during the general inspection contingency period. Certified HVAC professionals will conduct a visual and diagnostic inspection to determine the condition, cleanliness, and efficiency of the system. This is an optional expense, although highly recommended if the central AC system is older than 10 years.
Loan Appraisal / Flat fee, approximately $675
Following the competition of the inspection period, the appraisal is then conducted, and a valuation report subsequently issued to the buyer and their lender. The appraisal determines value but also serves as a short “live-able” condition inspection for the lender. This is when the leader gets “eyes on” the property to validate their investment. If a rush is needed, it can be an extra $100. Buyers must pay for this fee if they are using a loan. Whether the lender mentions it or not, the buyer will ultimately pay for it.
Building Permit Package / Approximate costs start at $250+
If a buyer suspects a property might not have proper building permits, they will order a Building Permit Package for review from a private real estate research company. Again, ordered during a general inspection period. The report will provide a summary of permit dates, purpose, and status. Flood Hazard reports are provided along with pertaining Department Permits and Planning database information. This is an optional expense.
These are just some of the additional outside of escrow closing costs expenses. When considering a home purchase, get an experienced real estate agent to help you properly navigate your home search and purchase journey!
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