With so many programs and loan options available even after the housing crunch it's still confusing on how much it actually takes to purchase a home.
Each bank and government program may have their own way of adding fees and costs but typically these can be built into the loan. If you are a first time home buyer the process can seem scary and sometimes overwhelming but knowing is more than half the battle. By arming yourself ahead of time you can launch yourself into the exciting world of homeownership.
As a first time home buyer it does literally pay to learn all you can. This is the biggest investment you have probably ever made so far and not fully understanding all you are signing can have negative results. Make sure if you don't know what you are signing that you ask. Our agents have heard it all and know the process well. We would be happy to explain in detail the entire transaction of a Ruidoso real estate purchase.
Even though there are programs and loans that allow for a low to zero down deposit you will probably need some liquid cash somewhere along the line.
1. Earnest Money
Earnest money is when you basically put a little down to hold the property. It shows you are a serious buyer that is willing to put money on the line to keep the property. If you simply back out for no legal reason, that money can go to the seller for time loss in selling. The more this deposit is, the better your offer may be to the seller. A typical earnest money deposit may be 1-3% of the purchase price but can be a little as $500. Ask your agent what is appropriate and if an earnest money deposit is even required.
2. Inspection Costs
The cost of the home inspection after mutual acceptance on the purchase and sale contract comes directly from the buyer. Most home inspectors require payment on the spot and this is usually $300 - $800. Make sure you get a professional inspector and not just the least expensive as this is an important purchase and you want to know as much as you can about it.
3. Closing Costs
This is one that can usually be built into the loan or the sellers can pay. But be prepared just in case. This fee can include insurance proration, taxes, lender, title and escrow fees, and anything further agreed upon between buyer and seller. This fee can run between $2000 and $10000 so it really helps to know how this is getting covered.
4. After Purchase Cash Reserves
Once you own a home the fun just begins. You may need extra furnishing for the added space. You may need to replace, upgrade, update or repair things that were not covered in the home inspection contingency. And if anything should go wrong in the future, it always helps to have an emergency fund of at least 3 months saved. It will alleviate so much stress knowing if something major happens, you have it covered.
Century 21 Aspen Ruidoso is the leader in Ruidoso real estate and properties. With dozens of agents for buyers, sellers and investors you are sure to be in good hands throughout your real estate transaction.
Give us a call today or email us anytime for staging tips, pricing strategies and agency services. Homes@zianet.com 800-658-2773