How much does it really cost to get into a home in this market?
Today we want to talk to all the first-time homebuyers out there. We're getting a huge influx of buyers and we get this question a lot from them: “What are my costs as a first-time homebuyer?” We’re breaking it down today.
For any homebuyer jumping into the market, a $200,000 home is a nice average. That buyer could get an FHA loan with 3.5% down. That means they’ll need $7,000 for their down payment. When you make an offer, you're going to put down additional earnest money to show the seller that you're serious about the house. We put these two together.
Once we're under contract, we're going to have an inspection period. When we hire an inspector, we're going to look at the whole house. We're going to check for termites, inspect the chimney, and if the house was built before the 80s, we're going to do a sewer scope. We always recommend being ready for about $1,000 worth of various inspections.
After that, we're also going to have an appraisal of the house. That usually costs around $500. We're also going to have closing costs on closing day. You want to have an additional $5,000 ready for that in the $200,000 price range. When we put all these numbers together, you need about $13,500 to purchase a home in this market.
For any homebuyer jumping into the market, a $200,000 home is a nice average.
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There's a possibility we may have to offer over $200,000 on that home because the market is so competitive right now. You want to make sure that you are ready and have extra money in your pocket should we need to go over the asking price. We usually recommend that for every $10,000 over asking price, you should have an extra $5,000 to secure any appraisal shortage.
If you have any questions about this topic or maybe a different type of loan, we're happy to answer those questions or connect you with one of our preferred lenders who can. If you have any other questions about real estate, please feel free to contact us.
