Counting your pennies is a kind of cute but pretty old school saying and hardly ever applies in house buying but the point is, there are a number of costs associated with the buyer's side of the purchase transaction. Before any buyer starts to think the only financial obligation is the price of the house...think again. Before you even contemplate buying that house, you'd be well advised to count lots and lots of pennies.
Costs associated with your house purchase will be many...loan fees, appraisal fee, home inspection, pest inspection, radon inspections, survey, chimney, water, well, septic...and these are just the most common fees! If your home inspector determines that something (like a chimney, HVAC system, electrical component or plumbing) is a bit wonky or hinky, in other words shoddy, dangerous or missing then he or she will advise a further inspection by someone licensed in that particular field. Sure, there's a chance that someone might come inspect further out of the kindness of their highly specialized and licensed heart but you can't always count on that. Why should you? Don't you like to be compensated for your time and expenses with anything work related? Time is money to plumbers, electricians, chimney sweeps, etc.
Sure, I know that most (including me) Buyer Agents can negotiate some closing costs with the contract but these inspection expenses won't wait for closing to get paid. Uh uh, this stuff is what is know as "out of pocket" expenses.
With the exception of the appraisal (in NC $400-600 residential) and credit check fee ($15-50), most of your loan associated fees will be built into your mortgage so know they are there but for the sake of today's blog we will be setting those aside. Also, let's assume a typical family home - not a McMansion! One other thing to consider is that these inspections are performed during a pretty short window of time - usually 20 to 45 days.
- Home Inspections will give you a fairly comprehensive overview of the condition of the house before you fully commit to closing on the house. ($350-500)
- Pest Inspection eases your mind about the presence of wood destroying pests like termites, carpenter ants and carpenter bees. ($85-100)
- Radon Inspection will indicate the presence of a cancer causing gas in higher levels than indicated safe by EPA. ($50-150)
- Surveys should always be recent so that you know exactly what property you are purchasing and knowing encroachments, easements and location of house site, wells, fences, etc. ($500 to a lot of $$$)
- Chimney Sweeps lets you know if you can actually safely burn that fireplace that you were so keen on having your agent find! ($150-300 PER chimney)
- Miscellaneous covers water integrity, well pump condition, septic condition. ($50-350) Any additional professional inspections (think plumber or electrician). Usually charged by the hour. ($50-85/hour)
That's a lot of pennies! Wouldn't you rather know ahead of time though that before you buy that house you need to assess your out of pocket coinage? No one likes unexpected expenses!
In the mountains of Western North Carolina, call me at MoonDancer Realty and we'll work through this together...understand that you'll still be the one with the out of pocket expenses and I'll be the one making sure you know about them!