Today we are going to be talking all about closing costs! Check out the video below to learn all about them! If you don’t like videos, read on below.
Last week we went through closing costs when you are selling a home, but there are also closing costs associated with purchasing a home. Most buyers are aware that they need to save up for a downpayment. They also know they need to pay for inspections. But, many people don’t realize there are also quite a few fees that you need to budget for.
I had a buyer a couple of years ago that had to let their dream home go because they didn’t have enough cash to close on the home. This could have been solved if they had know to budget for an extra 3%. I really don’t want you to end up in that situation. So here are my 3 tips for buying a home when it comes to closing costs.
Write out a budget
Meet with your realtor and write out a budget. Depending on the time of year that you are buying, closing costs can vary from 2-4% of the purchase price. That means if you are buying a $500,000 houses here in Portland, you can expect your closing costs to be about $15,000. We have a great buyers guide for you once you are ready to get serious about buying a home. You can download it HERE
Be honest about what you can afford
Take a look at your finances and budget for what makes sense. Just because you are approved for a $500,000 house doesn’t mean that is what you should spend. If you only have $7,000 to put towards closing costs, we may want to look at buying a cheaper home. You don’t want to move in and be immediately house poor, so lets come up with a real budget and decide what kind of purchase makes the most sense to you.
Stretch your money
Make a plan for your money to go farther. Depending on the health of the overall market, we may be able to ask the seller to pay for some, or all, of your closing costs. This means that your money can go farther. While this is an option in all markets, if we end up writing an offer on a home with multiple offers, the chances of our offer being accepted and getting closing costs covered is very low. There are things we can do to combat this, so we just need to sit together to plan everything out.
Closing costs are not a fun part of the real estate transaction. They do however pay for your new deed, so they are crucial to buying a home. If you want to sit down to discuss the specifics about what fees are covered, or if you just have general real estate questions, I would love to chat with you anytime!
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Thanks for joining me today and I will talk to you soon!
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