Whether you are purchasing your first home or your fifth the entire process can feel like you’re trying to take a sip of water from a fire hydrant. One question I get far too often is “what hidden fees can I expect when purchasing a home?!”. Super fair. I want to know that too!

First thing to be aware of is your earnest or option money. Once you make an offer and it gets accepted you will immediately need to submit money to the title company for your earnest money and your option money. Your earnest money is like your good faith money. It is typically about 1% of the contract sales price, and will go towards your downpayment as long as you make it to closing.

Your option money is a bit less, usually $100-$500, and it buys you an option period, or a period of time to get the home inspected and negotiate any repairs with the seller. If you back out of the transaction during this option period, you only lose your option money, plus the cost of inspection. However, if you make it to closing, this goes towards your downpayment and closing costs.

Inspections and appraisals are another thing, however these are typically billed to title and are a portion of your closing costs and prepaids that come from lending. Typically when you purchase a home you will have a down payment, and closing costs, and the total of that number is what you bring to closing. The only cash you need up front is your earnest and option money, which like stated above, goes towards your down payment at closing! Hope this helps!

For more information visit our YouTube Channel for a quick video on this topic!

https://youtu.be/QdPncGBBZvo