CS Real Estate Texas
Carl Stidston EXP Realty DFW & Surrounding Areas, TX
Mobile: 817-598-6706

Up Front Costs of Purchasing a Home


As a home buyer, there are some upfront costs involved with purchasing a home, in addition to any down payments or closing costs. 

This form will outline those costs and give a brief explanation of each.

Some costs are based on the sales price of the home; for the below example, we will use a home price of $200,000.

Earnest Money: (negotiable)

This is paid to the seller at the time the contract is signed, also known as “Good Faith Deposit”.  This lets the seller know that you are serious about buying their home and can compensate them should the buyer back out of the contract.

This is typically equal to 1% of the sales price of the home but is usually credited back to the buyer during closing with the title company.

Ex: on a $200,000 home, this would be $2000.

 

Option Fee: (negotiable)

This fee is paid directly to the seller of the home within the first 3 days of the contract.

This purchases your right to have an “Option Period” in which you should have an inspection completed.

During this period, you as the buyer has the right to cancel the contract for any reason and still have the Earnest Money refunded to you in full.  Like the earnest money, this can be credited to your closing costs and is usually about $150.

 

Home Inspection:

Should be completed within the option period, this is a service provided by a licensed inspector that you hire and pay directly.  This inspection is never mandatory, but always recommended.  Fees do vary between inspectors, however an inspection plus termite inspection is about $450.

 

Home Appraisal:

This fee can either be paid directly to a vendor or added to your costs during closing, depending on the lender.   Appraisals are required by most lenders to certify the property is worth the sales price before they will loan you the money to purchase it.  This fee will vary between vendors and the size of the property in question, but is also about $450.

 

So, in the above example of a home sales price of $200,000 the upfront costs will be as follows:

Earnest Money………………………………………………………………………………. $2000

Option Fee……………………………………………………………………………………….$150

Inspection…………………………………………………………………………………………$450

Appraisal……………………..……………………………………………………………………$450

                TOTAL Upfront Costs………………………………………………………….$3050

NOTE – the earnest money and option fee should be credited back to you at closing, ($2150); making the true upfront costs: $900.

 

The closing costs and down payment will be addressed by your lender.