What out of pocket costs have you planned for your home purchase?
Are you aware of the up front monetary commitment that it takes to purchase a home?
As soon as you get under contract to purchase a home, a specific timeline that is outlined within the purchase contract begins. There are certain actions that you agree to take within that timeline.
For many, those specified actions include:
- Depositing the earnest money.
- Performing the home inspection.
- Performing the termite inspection.
- Performing any other inspections that are important to the home buyer.
There are out of pocket costs that are associated with the above actions. Let’s take a look at each one.
1. Depositing the earnest money.
Earnest money is part of a home buyer’s out of pocket costs and is the money that a buyer puts down on a home. The earnest money signifies the home buyer’s serious and good faith intention of purchasing the home.
When you are under contract to purchase a home in Arizona, the earnest money is due immediately.
Typically earnest money is to be deposited with the title company that is agreed upon. The amount of earnest money that the home buyer is to deposit is negotiable and typically hovers around 1% of the contract price.
For example, if the contract price is $100,000 and the earnest money that is agreed upon is 1% of the contract price, then the earnest money is $1,000. $100,000 x 1% is $1,000.
As you make your plans for your home buying journey, earnest money should be a prime consideration and knowing the potential purchase price of your home ahead of time will be instrumental.
Did you know that depending on your financing, you can receive a gift from a family member to cover your earnest money?
2. Performing the home inspection.
Here in Arizona, the inspection period for the home purchase typically begins upon execution of the contract. Usually, the inspection period is 10 days, unless otherwise negotiated.
The physical home inspection is almost always the most critical part of inspections. The home inspection will give you a basic understanding of the condition and functionality of the home. If there are any physical or functional deficiencies or problems with the home, this is when you will find out.
Soon after you are under contract to purchase, the home inspection is ordered. The cost of a home inspection will vary, depending on the size of the home and what amenities there are, such as a pool, spa, yard watering systems, etc…
For the average home, the out of pocket costs for home inspections can run from $300-$500.
3. Perform the termite inspection.
The termite inspection will typically be completed alongside the home inspection. The termite inspection is actually a wood destroying organism inspection. The inspector will look for any conditions conducive to wood infestation and deterioration. And report those findings to the home buyer, the title company and sometimes the state.
Termite inspections usually cost the buyer about $65.
4. Performing any other inspections that are important to the home buyer.
There are many other inspections that may be necessary, based on the home and termite inspections.
If the home inspector finds any issues with any of the major systems of the home, such as the plumbing or electrical, they may recommend that you get further evaluations of those systems.
The costs of these inspections can vary and range from an $80 service call on upwards to $250 for a roofing certification.
Although this item isn’t listed above as an inspection, it is one of a home buyer’s out of pocket costs that you must keep in mind.
5. Performing the appraisal.
When you are under contract to purchase a home and you are financing the purchase, your lender will require an appraisal.
An appraisal will assure your lender that they are making a good investment and the value of the home matches the contract price.
The out of pocket costs for home appraisals typically run between $400-$500 and up, depending on the size of the home.
We can help you.
As you can see, there are several up front, out of pocket costs that home buyers should keep in mind as they begin their home buying journey.
We have extended an excellent opportunity to our online community that can help to put your mind at ease as you evaluate your buying costs.
We have negotiated a fantastic promotion for our online community that encompasses the out of pocket costs for both the home inspection and appraisal.
The Buyer Advantage Program
When you purchase a home with us and use our preferred lender, we will reduce your out of pocket costs by up to $1,000, by paying for your home inspection and appraisal.
We are very pleased to have been able to negotiate this with our preferred lender and are even more excited to make the offer to you.
You may not be ready to purchase a home at this time and we understand that. For that reason, we have a certificate for you to download and keep safe until it’s time. Just present the certificate at our first meeting and you will save $1,000 in out of pocket costs on the purchase of your home!