![]() |
Down-payment Most homebuyers are aware of the required down-payment fee but some are not as well informed. Generally the down-payment is 3.5 to 5 percent of the home’s total sales price, however there are some loan types that require lower to zero down-payment. A common belief is that at least a 20 percent down-payment is required for buying a home, but the reality of it is that there are other loan programs available to home-buyers that will require less of a down-payment. Of course buyer and property must qualify and meet specific guidelines in order to obtain one of these type loans. We recommend that you schedule a meeting with your mortgage lender to discuss which loan type is best for you and to help you calculate your down-payment amount. If you are ready to get started with the home loan process, you can get started right now by filling out the form on our mortgage loan pre-approval page. One of our preferred lenders will contact you shortly after you have submitted your information. |
![]() |
Earnest Money Although this isn’t exactly a fee, earnest money still means your funds need to be available at the time of making an offer for a home because it will be deposited with the Title Company. The Earnest Money reassures the seller that you are serious about buying their house. By presenting Earnest Money Funds along with the Contract Offer, the seller’s will get a sense of security while having their property removed from the market. Typically, the Earnest Money in Houston TX and Missouri City TX, is based on 1% of the purchase price. Example: The required amount of Earnest Money required for a home that costs $440,000 would be $4,400 based on 1%. The Earnest Money will be credited back to the bottom line on the buyer side at closing. |
![]() |
Moving Expenses
Moving costs have steadily been increasing and it is wise to be prepared for this expense. The distance and number of items you’ll be moving will determine the moving company’s charges. Those who move from one part of the country to another often find themselves spending thousands in the process. On the other hand, those that are moving near-by or across the city are more likely to rent a moving truck and handle the responsibility of moving their possessions themselves which typically lowers overall moving expenses. |
![]() |
Closing Costs
It is important not to overlook these fees as they are often the second largest expense that a homebuyer pays out of pocket. Closing costs largely consist of mortgage preparation fees and will be discussed in detail below. I always recommend that homebuyers speak with their mortgage lender and request a Good Faith Estimate of what fees you will be expected to pay. Remember: it is important to maintain good communication between you, your mortgage lender and your Realtor®. You should check with these professionals every couple of days should you not hear from them first. |
![]() |
Home Inspection
Home inspections are not mandatory, but they are an important part of the home buying process and should not be skipped. You will want to have a home inspection during the Option Period. The Option Period is a specified number of days allotted to the buyer, which allows the homebuyer to perform any/all due diligence deemed necessary during this time. A professional home inspector will then inspect the home on the homebuyers behalf and search to discover any defects or issues that need to be addressed and resolved prior to finalizing the home purchase. A home inspection generally costs between $350 and $1,000 in Houston TX and Missouri City TX. A home inspection may cost more for larger estates. In addition to a home inspection you may also want to select specialist inspectors whose focus is on specific areas or items of the house. Example: termite inspector, HVAC, electrical etc… |
![]() |
Application Fee Processing a loan application can be a time-consuming process, particularly if the mortgage company is handling hundreds of loan applications at the time of receiving your application. For this reason, some lenders choose to charge an application fee to compensate for the amount of time involved. Out of many applicants, many times a large percentage may not qualify for a loan yet, especially if the loan requirements are strict at the time of applying. If the requirements for lending are strict at the time of your application, they may have many pending applications that are not quite ready to qualify. |
![]() |
Origination Fee
The highest mortgage fee that needs to be paid is what you pay to the lender for your mortgage generation, or “origination fee”. Your lender receives this fee for the preparation of the mortgage before closing. |
![]() |
Discount Points
Buyers have the option to pay this fee for buying down the interest rate on the loan. Your lender should discuss all the available options before you make this decision, as discount points can be used to plan a loan structure in several different ways. Ask your lender about this. |
![]() |
Property Appraisal
A property appraisal is ordered by the lender to confirm that the agreed purchase price of the home and the amount the mortgage company is lending are aligned. The appraisal is required for the loan, therefore this fee is paid by the homebuyer. The fair market value of the property will be ascertained by a professional appraiser. If it is found that the property is valued lower than the sales price in the contract, the two parties must renegotiate and resolve the issue or the purchase will most likely not go through. |
![]() |
Credit Reporting Fee
A fee for checking your credit report may be charged to you by some lenders. Typically, the lender utilizes the services of a third party vendor to check your credit and passes the expense of the credit report onto the homebuyer. |
![]() |
Private Mortgage Insurance If the loan amount makes up a large percentage of the sales price, mortgage companies will charge a private mortgage insurance (PMI) fee for their protection. Once the loan amount is reduced to less than 80% of the property’s market value, this fee will no longer be charged. Until then, PMI is a monthly mortgage expense that should be accounted for before getting a loan. Speak with your lender about PMI. |
![]() |
Property Survey
The mortgage lender will require that the property you are buying will need to be surveyed so that they may verify the property’s bounds and specifications prior to approving the loan. Many times sellers have an existing survey that may or may not be accepted by the lender and Title Company. |
Existing surveys are usually not accepted by the lender or Title Company if there have been any changes to the property. If a new survey is required, the buyer typically incurs the cost unless buyer and seller agree otherwise.
Both buyer and seller involved in the sale will mutually decide who will pay the title company fees, which vary from state to state. Many of these fees do not need to be paid when the transaction is an all cash deal and zero financing is involved. Generally, transactions in Houston TX and Fort Bend County TX the seller will pay the title fees unless otherwise negotiated and written into the contract. The seller can get an estimate of these fees from the websites or apps of Title Companies. Another option is to call the Escrow Officer that is handling the closing of your transaction and request a Preliminary Closing Statement. If you are unsure speak with your Realtor®. | |
![]() |
If you are the homebuyer you will want to call your lender and request a Good Faith Estimate to get a list of all the fees you will incur when purchasing your home. |
![]() |
Title Insurance Fees
Before the title company can issue your Title Policy for insurance against Title defects, they will need to obtain complete documentation verifying a clear title. The Title Company charges a fee for performing and completing this process and issuing the Title Policy. |
![]() |
Title Search A title search is performed by the title company upon receiving the sales contract. Through this, they will go through all existing records of the property title in question to obtain information on its history and to be sure of a clear title. |
![]() |
![]() |
![]() |
Recording Fees
The property deed and other documents will be recorded at the county clerk’s office. The title company charges a recording fee for this service, which will be paid by the homebuyer at final closing. |
![]() |
Owner’s Title Policy
The Owner’s Title Insurance Policy can be charged to either the seller or the buyer as negotiated and agreed in the sales contract. This cost is a percentage of the final sales price. |
![]() |
![]() |
![]() |
Mortgage Title Policy
The homebuyer’s mortgage company will require a Title Insurance Policy in which the fee is calculated by a percentage of the final sale price. |
![]() |
Flood Certificate
If you purchase property in an area that experiences heavy flooding or determined to be located in a flood plain, then a Flood Certificate will be required. The Flood Certificate Fee varies from state to state. Speak with your insurance agent and get a quote for additional Flood Insurance. Typically, Flood Insurance is a separate insurance policy. |
![]() |
![]() |
![]() |
Escrow Fee
The Title Company processes your application and charges a fee for this service. |
![]() |
Tax Certificates
Tax certificates will be requested by the title company to find out about any outstanding taxes and payment history. Taxes due from the date of closing until the year end will be prorated and paid by the homebuyer. Payment for property taxes may be a part of the monthly mortgage payment. |
![]() |
![]() |
![]() |
Document Fees
The transaction will require the preparation of several documents. Different types of documents may be needed which include Affidavits, the Deed of Trust and Notice to Purchaser, among others. |
![]() |
Recording Fees
The County Clerk’s office will need to record some of the documents such as the Deed, |
![]() |
Home Owner’s Insurance
The mortgage company requires homeowners insurance for the protection of the |
![]() |
Property Taxes
Property taxes can be significantly different for each neighborhood, municipality and state. If you purchase real estate in newer neighborhoods, the taxes tend to be higher. Tax rates can vary and may be quite high in some states and can be as much as up to 6% of the value of the house. |
![]() |
Home Owner’s Association Dues
Only owners of properties situated in neighborhoods that have a Home Owners Association, (HOA) will need to pay this type fee. The HOA Fee is charged to residents for operational and maintenance expenses of the common areas of the neighborhood, and the fee amounts can greatly differ from neighborhood to neighborhood depending on the number and types of amenities provided. The fees for condos and townhomes tend to be higher as it includes maintenance of the lawn and overall exterior. |
![]() |
Property Maintenance & Repairs
Ownership of a property means taking responsibility for repairs and maintenance costs which you do not typically pay as a tenant. We recommend that you create a reserve fund to be financially prepared for these expenses which can often arise unexpectedly. |
![]() |
Home Warranties
In addition to the home owner’s insurance, you can protect yourself against minor repairs and defects not included in the homeowner’s insurance policy by purchasing a home warranty for extra protection. |
![]() |
Appliances and Fixtures
Replacements in any home are most commonly needed for appliances and fixtures. These could include lighting fixtures, ovens, ceiling fans, microwaves, washer/dryers and refrigerators. When you buy a home, it is a good idea to find out how much these items may cost if and when you replace them. |
![]() |
Services
Depending on the size and type of property you are buying, you may need to purchase several pieces of equipment to perform maintenance, lawn care and/or landscaping. Before you make the decision to purchase any equipment, take the time to research what kind of costs are associated with hiring a professional lawn service vs. purchasing the lawn equipment and doing the work yourself. Remember, you have to store and maintain the equipment as well. You may discover it is best to hire a professional lawn service to maintain the lawn & landscape for you. |
![]() |
Property Updates
Though there is no end to the number of updates you can make to a home, you should only go for items that will add value to the property. One way to make sure your house stays competitive on the market when you sell is to make all the updates that are commonly present in other homes in your neighborhood. For example, if most homes have custom decks, granite counter-tops and travertine backsplashes, you should aim to make these updates to your home as well. However, be sure not to go too far with the upgrades or you won’t get a worthwhile return on your investment. Do not over remodel or over build – you may not recover the investment when you go to sell your home. |
![]() |
Basic Utilities
Expenses for electricity, water and gas are usually different in each area and for different properties. The seller can give you an estimate of how much utilities will cost you each month so that you can budget accordingly. |
![]() |
Now that you are familiar with the costs affiliated with buying a home, you can calculate a rough estimate and be better prepared for all the additional costs related to your home buying situation. As each state has different criteria for charging fees, a professional real estate agent in your locality can inform you about local fees and rates.
All your queries can be expertly handled by Team Sadler Realtors in the Houston TX and Missouri City TX areas, so please feel free to contact Team Sadler for more help in buying or selling a property.
There is no cost to the home-buyer when utilizing the services of a Realtor® when purchasing a home. A Realtor® will be helpful in presenting homes within your budget and within your list of likes as well as having many useful resources that frees up a home-buyers time so they can focus on details and more important matters while enjoying the process of looking for that new dream home.
See choosing the right Realtor®.
Additional Resources: Common Homebuyer Fees
8 Costs to Consider Before Buying a Home
Costs of Owning a Home – The Monthly Tally
Renting vs. Buying: The True Cost of Home Ownership
We hope you find the additional resources above helpful.
Thinking of buying or selling your home? We are passionate about real estate and would love to put our local real estate knowledge, marketing expertise and experience to work for you. You can contact Team Sadler here or Call or text: (713) 628-4487.
No Hype – No Pressure – Just Honest Customer Service
About the Author: The above Real Estate information about COMMON HOMEBUYER FEES – Know Your Costs of Owning a Home, was provided by Jeff Sadler a Missouri City, TX real estate agent. Jeff Sadler can be reached via email at realtor@teamsadler.com or Call / text (713) 628-4487.
Jeff & Whitney have successfully helped many wonderful clients move in and out of Sienna Plantation – Missouri City, TX and surrounding areas.
We service Real Estate Sales in the following Harris County & Fort Bend County areas: Missouri City, TX – Brightwater, Lake Olympia, Sienna Plantation, Riverstone, Quail Valley. Sugar Land, TX, Aliana, Avalon, Commonwealth, Greatwood, Heritage Colony, Sugar Creek, Sweetwater, Telfair, Riverstone, First Colony.
Houston, TX – Afton Oaks, Braes Heights, Galleria Homes, Hunters Creek, Westbury, Willow Meadows, Willowbend, Maplewood, Marilyn Estates, Midtown, Medical Center, Memorial, Meyerland, Montrose, Museum District, Parkwest, Piney Point, Rice Military, Upper Kirby, West University, Rice University, River Oaks, Tanglewood. Bellaire, TX. Pearland, TX.
COMMON HOMEBUYER FEES
KNOW YOUR COSTS OF OWNING A HOME
Thank you for checking out
TeamSadler.com