Buyers should be aware of all the out of pocket expenses involved in buying a property. You will need a few thousand dollars already in your bank account on top of your closing costs. A mortgage loan does not pay for your initial deposit, inspections, appraisal (for loan) or your home owner's insurance.

Please be aware you must be able to provide the source of any cash you use towards your home purchase. If you have stacks of bills under the mattress, or are waiting on money without a definitive payment date - that is NOT going to work. Money used to purchase real estate must come from legitimate (legal) means in an account with a financial institution. Same goes for any “gift” money.

When a seller accepts your offer an initial deposit is immediately collected to secure the contract. If during the process you (or the seller) decided to cancel the contract - you will most likely get this deposit back. However depending upon the circumstances you may have to forfeit this money to the seller – if you back out without any legitimate reason. Once you are “under contract” or “pending” the seller's broker holds your initial “earnest money deposit” or EMD and we deduct it right off from the purchase price. The amount of the EMD can be in specified in the listing, generally it is $1,000.00 for every $100,000.00 of the purchase price. The EMD must be in the form of a bank , or personal check and it must be made out to the name of the brokerage firm that owns the properties sale listing (there are exceptions if seller's attorney is used.) I will always provide you with exact instructions for this.

Protect yourself - NEVER give any cash to a real estate agent or mortgage broker or attorney!!

Next you will want to perform inspections to make sure that you are not unaware of any major faults or structural issues that may negatively effect your loan, insurance policy, or the value of the property. Inspections are only for your protection and are not mandatory – however; your loan may require. Home inspections are usually $400+ depending on the size of the homes and the tests performed.

Pest, Radon, Mold inspections are all additional fees and are performed on an as needed basis.

You should have inspections performed by a certified and licensed professional home inspector.

You CAN pay them in cash or on a credit card - just get a receipt.

** If the property has well water your home inspector can usually perform laboratory water testing.

** Properties without working utilities or that have been winterized will incur additional costs.

**Septic inspections should be performed by a reputable and insured septic company (only.)

Septic system inspection will run you around $350-$700. A new septic system can be $7k-$30k.

When an inspection is performed you are paying an expert for a condition snapshot, a report documenting the exact condition of the structure. If there are any major ($1500+) issues we will then obtain estimates to establish dollar value for the repair, or negotiate a credit from the seller. If a property is sold “as is” or the seller is unable to make repairs, then you may be responsible financially.

You may want to walk away from a property based upon the inspections – these costs are unrecoverable.

You will need to purchase homeowners insurance prior to closing – the average cost for a years premium can be around $1000 or more depending upon the value of the property. Please be sure to obtain a quote as soon as you are under contract – or even before! Some companies require payment in full while others can bill you. Flood insurance may be required for properties located near water which can be costly. Mortgaged properties must be properly insured - a policy must be in effect before you can close.

If you are using a mortgage to purchase your property then you will have to pay for a bank appraisal which will be another $500.00 or more out of your pocket. If the property does not appraise for the value of the loan you wish to borrow, this becomes another unrecoverable expense. Some deals are lost at this point, but we try our best to renegotiate and continue.

You can see how the home buying process can be expensive especially if you are under contract more than once –

it is always better to walk away than to continue with a purchase you may regret in the future.

Your real estate professionals are here for you no matter what! Both buyers and sellers will require an attorney that specializes in real estate law. If you know of any that you like, feel free to use them – I have a few that are remarkable at what they do. Once you are under contract your real estate attorney will discuss their fees with you, they tend to run around $700.00 and you can pay them at closing – sometimes their legal fee is included in your closing costs disclosure that your mortgage expert has provided. Your mortgage broker fees are listed on the closing disclosure and are included in the closing costs for your loan. Real estate agents and brokers like myself are actually paid by the seller at closing. - You do not pay for my services as your buyer's agent.