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    Understanding Closing Costs When Buying Your Perfect Home

    You’ve found the perfect house with everything you’d hoped. It’s near the right schools, close to work or in your favorite part of town. Just when you think you have everything figured out, you discover the last hurdle—closing costs on your new home.

    So what are closing costs, who pays what and how do you sort through the paperwork so you can move in as soon as possible? Here are a few tips to help you get through a process that doesn’t need a manual to understand.

    Application and Appraisal Fees

    The application fee is most often paid by the buyer, so ask your lender what the fee covers, such as a credit check. Often, a Tri-merge credit report is pulled to get your credit history and score. Your credit score plays a big role in determining the interest rate you’ll get on your loan.

    It may also cover the appraisal fee, but having a third-party appraisal can help you feel more secure and perhaps even point out problems you may have never noticed or have been informed about.

    Also look at the prices of the homes within the neighborhood, and average them according to location and size. If your home is in a good school district, whether you have children or not, means you may get more for your home if you consider reselling in the future.

    Inspectors and Insurance

    Buying a home is one of the landmark purchases you will make during your lifetime, so don’t rush. Investing a few dollars in due diligence can go a long way. Hire your own property inspector to look at the important things you may not be thinking of—a solid foundation, pest problems and faulty plumbing can be a big hassle if you encounter this after you have signed the papers and moved in.

    According to an article published in the Washington Post, a house location survey is an excellent way to know exactly where your property line is drawn, and what you are truly buying. It also shows the relationship between yours and adjoining properties. This is helpful if you plan on minimal to extensive landscaping or perhaps putting in a pool or spa. This survey can run approximately $275 to $450.

    Ensuring Your Home is Truly What You Think It Is

    You will also want to consider some additional costs to make sure you are covered in case of unforeseen circumstances. Title and homeowners insurance, notary fees, local, state and federal taxes, as well as escrow fees should be figured into your budget. If you happen to be buying a home in an area that is “a flood zone,” you will need to look into flood insurance as well.

    A home in Arizona priced at $200,000, will most likely incur three to five percent of the total purchase price in lender and third-party fees. Once you have these steps taken care of, it is often in your best interest to have an attorney look at your documents to see if you are truly getting a fair market price on your home.

    Closing Cost Fees

    Closing is when the title of the property is transferred from the seller to the buyer. Depending on the arrangement you have with your broker, some costs can be paid by either the buyer, the seller, or split between the two. Negotiation is always part of the process so do your homework and ask your broker what the options are before signing on the dotted line.

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