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In this episode, we’ll discuss common fees during the home buying process.

Key Talking Points

· Down Payment

· Earnest Money Deposit

· Title, Deed, Settlement, and Escrow

· Title Insurance

· Home Inspection

· Appraisal

· Home Warranty

· Moving

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Workbook Pages

· Home Purchase Cost & Fees Planner

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Here is a quick way to estimate how much cash you will need to purchase your home.

Down Payment % + 3%

So, if you are making a 10% down payment, you should plan to have about 13% (10% + 3%) of your home purchase price. If you are buying a home for $300,000, that would mean you should have about $39,000 for your home purchase.

Earnest Money Deposit (EMD) is basically a down payment on your down payment. This is an amount you pay into escrow to show the seller you are serious about purchasing their home.

Settlement companies usually handle all the roles associated with title, deed, settlement, and escrow. Title states ownership, while the deed records when a title is transferred. Settlement is when you close on the home and finalize the purchase. Escrow is a neutral vault to ensure everything is distributed to the buyer and seller correctly.

Title insurance can be purchased from the title company and is different than homeowner’s insurance. Your lender will likely require you to obtain Lender’s Title Insurance. Owner’s Title Insurance is optional, but could help protect you from previous liens against the home and claims to ownership.

A home inspection will help you learn about any needed repairs as well as how to operate and maintain the home. If you do need to make repairs, you may be able to negotiate these with the seller. This is different than an appraisal, which is completed for the lender to provide them with an estimate of the home’s value.

A home warranty is also different from homeowner’s insurance. It can help lower the cost of repairing or replacing home systems and appliances such as A/C systems, hot water heaters, and refrigerators. 

Don’t forget about moving! Pricing can vary widely depending on how far you are moving, the level of service the moving company is providing, how much you are moving, and how long you may need your belongings stored before being delivered to your new home.

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Content is intended for educational purposes and not as direct advice for any particular real estate transaction. If you have signed an exclusivity agreement with a real estate agent, this is not a solicitation for your business. For more information visit www.HomeBuyerMentor.com