Before you even think about investing in Real Estate, you need to know that you shouldn’t start shopping for a home without first setting aside a little cash.
from ‘A Heads-up For Home Buyers’ 11 Things you might not have though about.
This is an Investment, Treat it That Way. Consider carefully, your up-front costs. Whether or not you complete the transaction, this is cash that will need to be readily available:
- Earnest Money – a deposit submitted with your offer to purchase (in general about 1% of the sales price). This will either be applied to your down payment or returned to you at closing. Something to note: If you willingly and unfairly breach the terms of your contract resulting in a dispute, and you are found at fault, it is possible that the earnest money deposit could be awarded to the seller.
- Home Inspection – usually within the first 10 days after contract acceptance. You might also be required to have termite, roof, radon, or other inspections. You may request additional, optional inspections such as pool or HVAC. (on average, a home inspection costs $400-$500)
- Appraisal – your lender will let you know when this is due, usually prior to the actual appraisal date. (currently $400-$500)
- Repairs – thought not necessarily an up-front cost, you should have a reserve of cash on hand in the event that repairs are required by your lender or appraiser but the seller is either unable or unwilling to complete them. If you elect to proceed, certain repairs may need to be addressed.
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