Home Buyer Closing Costs- Avoiding An Unpleasant Surprise
One of the biggest mistakes new home buyers often make is not being prepared for the buyer closing costs. They include a number of costs like title insurance, escrow fees and the like, which can quickly add up.
If you are considering purchasing your first home,
you should know that there are expenses beyond the mortgage and the down payment. Buyer closing costs can really add up and are often a complete shock to people who have never owned a home before. By knowing what closing costs are you can find ways to work around them. Or, if that is not an option, you can remember to set some money aside so that you are not caught off guard.
Closing costs include things like title searches and transfer fees, legal fees, property taxes and escrow fees. Many of these are payable to your lawyer who will ensure that the proper disbursements are taken care of. Many closing costs will be incurred by the lawyer themselves as they perform title searches on the property, title insurance, and incur fees filing standard real estate paperwork.
It is a safe estimate that you will spend between two and four percent of the cost of your new house on closing costs. Also, if it has been some time since a survey was performed on the property, you may also need to pay to have a new survey completed, but this is not always the case.
One way to make closing costs less painful is to try and get a certain portion of them included in the offer that you make on the home you are thinking about buying. Some sellers who want to move on will often give you a certain amount back to cover closing costs. While this is not always the case it is certainly something worth checking in to. A good real estate agent will let you know whether this is a possibility or not.
One thing that can take the bite out of closing costs is the knowledge that some, but not all of these expenses may be tax deductible. Some may also be taxable however so they can balance themselves out somewhat. Knowing which are is something that a good book keeper or tax accountant can help you with.
Don't let the fear of closing costs keep you from owning your own home. By being aware of them and budgeting properly you can move past the expenses and on in to your new home.
