Closing costs come hand in hand with purchasing a home. For many first-time buyers, it’s imperative that you discuss with your Fulton Grace agent all of the potential fees you face prior to closing as it is undoubtedly imperative to factor into your budget when you begin looking for your first home! When the property title is transferred into your name, you can expect a few of the costs (including a handful of others) to appear that are either generated by the seller or buyer. The list below is by no means exhaustive so be sure to consult your agent early in the process to understand exactly what you will be expected to pay.
- Home Appraisal
Lenders need to know how much the home you are about to purchase is valued at before a loan can be approved. The amount of the appraisal fee is generally a flat fee that varies among appraisers. The value of the home, as a result of the appraisal, is impacted by the surrounding area. The reason a home appraisal can be so long is the process involved with determining that the requested loan amount is reasonable. Also, the lender needs to regain value on the home if the buyer defaults on any loan payments. A qualified professional will take into consideration things like the structure of your home, age of the dwelling, materials used, square footage, and any renovations. But one of the most important factors is current market conditions; for example, considering what homes in the surrounding area recently sold for. Home appraisals are beneficial to both the buyer and seller. Typical costs to be expected at the end of a home appraisal process is around $300 – $500.
- Home Inspection
Home inspections are used to determine the condition of the home you are under contract to purchase. If a building isn’t structurally sound it could jeopardize the possibility of a bank loan and help determine if it is best to continue your search elsewhere. Also, if a building has issues this could provide excellent grounds to renegotiate the sale price and to have the seller fix the requested essentials before closing. The size of the property and surrounding location can affect the cost of a home inspection. Typical fees for a home inspection are in the range of $300 – $500. Your Fulton Grace agent can help you find a qualified professional to inspect your home.
- Administrative Fees
Administration fees can be among the most costly and unexpected if not anticipated. Lenders are able to request a fee to evaluate and prepare a loan for consideration. Administration fees can include any notary tasks, the lender’s attorney fee, and any documents that were prepared on the lender’s behalf. Be prepared to pay 0.5% of the amount borrowed for a home loan. Lastly, administration fees are in addition to a broker’s commission.
Regardless of any fees you may incur during a closing, try to plan on having more than you think you’d possibly need at your disposal. There are helpful tools for calculating costs that you may not think of at the time and could cost you time settling into your dream home.
WHO IS FULTON GRACE?
We are one of Chicago’s leading providers of comprehensive real estate services. We are home to an ever-growing team of savvy & reputable local realtors, seasoned property managers, and customer-service oriented staff. Whether you’re looking to find a new home, sell your home, or have your property managed, let us be your trusted real estate advisors.