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Guide to Closing Costs for First-Time Buyers
Like most major purchases, buying a home involves expenses beyond the reported sale price of the home. Some of these expenses are for processing key paperwork, and others cover measures to help you aware of potential issues with your purchase. Our real estate agents want you to be prepared for the full process of buying a home. Some expenses consist of a flat fee, such as the mortgage application or home inspection fee. Other expenses represent a percentage of the sale price. While exact figures are hard to determine before you make an offer on a specific home, knowing what these expenses are can help you estimate a figure for the assorted expenses involved.
Go With The Pros
New homeowners can recall one key aspect of buying a house: the reams of paperwork. You're making a large and legally significant purchase, and much of the paperwork will be in complex, legalistic language. Many homebuyers hire an attorney to review the paperwork and ensure that all is in order and that there are no aspects of the sale that will surprise either buyer or seller. It's a small cost compared to a home purchase price and can save you much more in unexpected expenses.
You'll have a chance to view your new home before you buy it, but what you probably won't have at the open house is the expertise of a home inspector. Home inspectors are trained and licensed to diagnose signs of damage and deterioration and identify areas in need of repair. You can have this done before you make an official offer, or as part of closing. You may also want to have the lot your home sits on surveyed to help establish boundaries and dimensions. It's more common for commercial properties, but can be beneficial for homebuyers to know where their responsibilities end and where their neighbors' begin.
A Sense of Entitlement
When you buy a home, you're joining a chain of owners. Occasionally, that chain can get tangled or even break. Your closing costs will include a title search and title insurance to make sure that you bought your home from someone authorized to sell it, and to protect you if a dispute over ownership arises. If you omit these, you may wind up making a significant investment in a home you don't truly own.
Starting On The Right Foot
Some closing costs represent the initial payments of expenses you'll continue to pay after you take possession. These include property taxes, mortgage insurance, and homeowners insurance premiums. How much you have to pay upfront can vary, and you may be asked to cover a period before your move-in.
If you'd like to get an estimate of closing costs for one of our Richmond homes for sale, this worksheet should give you a good idea of what to expect. If you have further questions about buying a home in Richmond, we'll be pleased to answer them when you contact us.