The Hidden Costs Of Buying A Southfield Home

When buying a Southfield home, the purchase price is not the only cost you’ll pay when it comes to your dream house.  Knowing the total fees upfront will save you from shock during the buying process.  

To help buyers prepare, here are some of the costs to be prepared for when buying a Southfield home.

Earnest Money & Escrow

Earnest money is 1-2% of the purchase price that you put down to show you are serious about buying the Southfield property.  The amount of earnest money required can vary based on market conditions.  

To make sure you can cover your mortgage insurance (if necessary) and taxes your mortgage company will require you to set up an escrow account.  If you are putting less than 20% down an escrow account may be required.  The total amount needed in escrow can differ depending on your lender, location and loan type.

Loan Origination & Title Company Fees

This can be a big one.  The origination is the cost of having the loan officer do the work of the loan.  It includes the cost of originating, underwriting and processing the costs of buying a home.  Typically this fee is about 1% of the total purchase price.  You can use your good-faith estimate to shop around.

The title company makes sure the title is free and clear.  You can also shop around for a title company or rely on your lender to provide one.

Inspection & Appraisal

You don’t want any surprises when you are buying a Southfield home, so you’ll want to make sure you have an inspection.  But having piece of mind comes with a price tag.  

There are a few types of inspections you might want to have.  First, the home inspection.  It covers everything from structural problems to flooding issues.  Costs vary by location but you can expect to pay up to $500 for your home inspection.  

There are also pest inspections.  In some regions you want to make sure there is no termite damage.  A pest inspection usually costs around $150.  

Last, there is a radon inspection.  The EPA recommends this because radon can be cancer causing.  This inspection can run a few hundred dollars.

The appraisal will tell you how much your Southfield home is worth.  You won’t be able to get a home loan without one.  Appraisals usually cost $200-$400.

Credit Check

This is usually a small fee of around $30 for the lender to pull your credit report.

Extra Insurance, Attorney And/Or Survey Fees

In some areas it is required to have an attorney at closing but other areas do not have this requirement.  Mortgage companies typically have an attorney for their side of things and you are not responsible to pay for that fee.

Sometimes your lender will require a professional survey for you property lines.  If they need to know exactly where your property ends, it can cost you $100.

Some areas require extra insurance like flood insurance. Be sure to discuss this with your real estate agent and insurance professional.

When buying a Southfield home and working through the process, don’t forget to shop around and ask questions.  The fees and charges are not always set in stone, and you might be able to get a better price by finding professionals on your own.  You can always negotiate!