Debunking Myths About the Home Buying Process - Part 2
Considering buying a home? Let us arm you with all the facts needed to find the best agent to help you navigate your home buying journey. Click here to view Part 1 of this series.
MYTH: Filling-in my contact information on a home search website will get the listing agent to send me information.
FACT: Search engine websites all have little boxes saying something like “More Information,” “Schedule a Tour,” “Contact Agent,” etc. prompting you to fill in your contact information. Many buyers think this goes directly to the listing agent so they’re very surprised when the person who calls them is not the listing agent. The reality is your information is sent to a buyer agent who has a contract with that site, trying to gather buyer clients. BUT DON’T WORRY! If you read Part 1 of our Debunking Myths blog series, you’ll know it’s better to work with a buyer agent than directly with the listing agent anyway, for many reasons. So take a few moments to chat with this agent to see if they are good fit for you, and if so, they can get you any of the information you were interested in! Better still, find a recommended agent for your area and if you come across a listing online you’re interested in then simply ask your agent about the home instead of filling in your information and playing real estate agent roulette!
MYTH: I only need enough money for my down payment. If I have a 100% financing loan, I don’t need any cash on hand.
FACT: There are several costs to plan for when buying a home, throughout many parts of the process. Below are the costs you need to be aware of, organized by when they are due. It’s important to remember that each state and each regional area within those states are different when buying real estate. So any specific numbers mentioned here are examples and you should refer to your local agent for more specifics.
Making an Offer:
Earnest Money: Most states have earnest money as a customary part of the offer from a buyer to a seller. While technically everything is negotiable, in Western North Carolina you could expect to need anywhere from $1,000 and up for this. (Check with your Nest agent to see what you can expect in Atlanta, Tennessee, and Virginia.) The good news is this fee is applied to your total purchase price at closing.
Due Diligence Fee: North Carolina is unique in that there is a due diligence fee involved as part of the offer process. While technically a buyer can offer $0 for this, the chances of a seller accepting it are pretty slim. The amount a buyer could expect to pay completely depends on the current market for the specific area you are in and your individual price point but you could easily expect to pay anywhere from $500 up to thousands of dollars for this. The good news is this fee is also applied to your total purchase price at closing.
While Under Contract: These are typically due at the time of service.
Appraisal: Lenders require a buyer to purchase an appraisal of the home to ensure that they’re not overspending for the new investment. This usually ranges from $300-$600, depending on the size of the home and the appraiser. Your buyers agent should be able to help you arrange this, and recommend a trusted appraiser.
While the next list of expenses are technically optional, they are strongly suggested as it’s better to examine a home while someone else owns it than to wait until you are the responsible party for home repairs.
Inspections: This can range from a basic home inspection ($300-$700) up to the full spectrum including radon, pest, fireplace, septic, water and other specialized inspections that can easily make hundreds turn into thousands of dollars.
Survey: If you’re buying a home on a 0.12 acre lot in a brand new developed community with a plat, then a survey may not be very useful to you. However, many potential homeowners would benefit to know exactly where the property lines are. Not only does this help you know where your property ends and your neighbor’s begins, surveys also can bring light to certain issues such as driveway encroachments. The price for surveys greatly depends on the size of the lot, steepness of the grade, etc., so be prepared to pay in the ballpark of $400-$3,000 or more for large acreage.
Closing Costs: This is paid at closing to cover lender and law firm fees. Your lender can give you a good estimate of what your closing costs will be.
Down Payment: Varies for each buyer’s specifics.
This may seem like a lot, but don’t feel overwhelmed! As part of your planning process for purchasing a home, reach out to your local agent to get a better understanding of these items in more detail and to learn specifics of what you may need to save for the purchase of your new home.
Check back soon for more home buying myths and facts!
Rebecca Griffee is the Air Traffic Controller and a Broker with Nest Realty Asheville. With her experience as an agent, Rebecca is excited to play a role in the growth and success of the Nest team and their clients.