Buyers Cost Guide

Down Payment

What it is: A portion of the home’s purchase price paid upfront by the buyer.
Fees: Typically ranges from 3% to 20% of the home’s price, depending on loan type and lender requirements. Larger down payments often result in lower monthly payments and may help avoid private mortgage insurance (PMI).

  • Conventional Loan: 3%-5% minimum

  • FHA Loan: 3.5% minimum

  • USDA & VA Loans: No down payment required

Earnest Money (Good Faith)

What it is: A deposit made by the buyer to show serious intent to purchase. It’s held in escrow and credited toward the down payment or closing costs at closing.
Fees: Can range from $1,000 and up. It demonstrates good faith and could be forfeited if the buyer backs out of the deal without a valid reason.

Closing Costs & Prepaids

What it is: Fees paid at the closing of a real estate transaction. Closing costs can include lender fees, title insurance, attorney fees, recording fees, and more. Prepaids cover items like property taxes and homeowners insurance that must be paid upfront.
Fees: Typically 3%–6% of the home’s price.

Inspection

What it is: A professional evaluation of the home’s condition, including its structure, systems, and any needed repairs.
Fees: Varies depending on the home’s size and location, generally between $300–$600. Specialized inspections, like radon or pest, may incur additional costs.

Appraisal

What it is: An assessment of the home’s value, required by lenders to ensure the loan amount aligns with the property’s market value.
Fees: Typically costs between $400–$600. Payment is typically due at the time of the appraisal. Check with your lender.

Utilities

What it is: Fees charged by utility companies (electricity, gas, water, etc.) to start or transfer services.
Fees: Varies by provider and location, usually ranging from $50–$200 per utility. Some companies may waive the deposit based on credit history.

Brokerage Processing Fee

What it is: A flat fee charged by the brokerage to cover administrative tasks related to the transaction.
Fees: $99 in this case and is due at the time of closing.