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10 Fees Associated With Buying a Home for Sale in Orlando

10 Fees Associated With Buying a Home for Sale in Orlando

If you’re buying a home, you know it comes with a price tag – and the total cost is a bit more than what you list in your purchase offer. That’s because there are some fees associated with buying a home.

Here’s what they are.

10 Fees Associated With Buying a Home for Sale in Orlando

When you buy a house in Orlando or anywhere else, you’re going to encounter some costs. Some of them, like your earnest money deposit, you’ll get back; others are simply part of the cost of buying a home.

#1. Earnest Money

An earnest money deposit is money you give the seller to show that you’re serious about buying his or her home. (You don’t actually give it to the seller; you give it to your agent, who puts it in escrow.) After you close the deal, your earnest money deposit goes toward your closing costs, your first mortgage payment or your down payment.

#2. Down Payment

You’ll have to come up with a down payment to buy a home. For most people, the down payment is between 5 and 25 percent of the home’s total purchase price. The higher your down payment is, the lower your monthly mortgage payments will be.

#3. Homeowners Insurance

Your lender will require you to buy homeowners insurance. That way, if something happens to the house, your lender won’t lose its investment (and neither will you).

#4. Property Taxes

Everyone has to pay property taxes, which vary by location. The taxes typically go toward public services, such as police, fire and EMS, roads, sewage systems, and schools.

#5. Private Mortgage Insurance

Not everyone has to pay for private mortgage insurance. However, if you put down less than 20 percent of the home’s purchase price as a down payment, your lender will most likely require you to buy it. This insurance protects your lender if you default (fail to pay) your mortgage payments.

#6. Appraisal Fee

You’ll have to pay a professional appraiser to value the home you want to buy before the bank will give you the money. You can’t choose the appraiser or shop for the best rates; the lender chooses an appraiser it trusts for the job.

#7. Loan Origination Fees

Your lender will charge you loan origination fees to generate and process your loan. The lender will let you know how much the fees will be, and they may even be negotiable (so it doesn’t hurt to ask).

#8. Title Search Fees

You’ll have to pay an attorney or title company to make sure that the seller who’s selling you the home is its legal owner. The title search will also show if there are other problems with the title that could later affect your ownership of the home, such as liens.

#9. Home Inspection

Smart buyers have a home inspection before they lay down any cash to buy a house. The inspection will show you what issues the home has so you can use them to negotiate with the seller – or, at the very least, know exactly what you’re getting into.

#10. Closing Costs

You’ll have to pay closing costs when you actually close the deal on the home. These typically range between 2 and 5 percent of the home’s total purchase price.

Are You Buying a Home in Orlando?

We can help you find your dream home on a golf course in the Orlando area. Call us at 407-529-4621 or get in touch with us online to talk about your idea of the perfect golf course home.

Explore our:

  • Homes for sale at Alaqua Country Club
  • Bay Hill Club homes for sale
  • Houses for sale at the Country Club of Orlando
  • Keene’s Pointe Golf Club homes
  • Homes for sale at Isleworth Country Club
  • Real estate listings in Sweetwater Golf and Country Club
  • Homes for sale at Heathrow and Legacy Clubs

 

Posted in: Buying a Home Tagged: Appraisal Fee, Closing Costs, Down Payment, Earnest Money, Home Inspection, Homeowners Insurance, Loan Origination Fees, Private Mortgage Insurance, Property Taxes, Title Search Fees

What You Need to Know About Earnest Money Deposits

What You Need to Know About Earnest Money Deposits - Orlando Homes for Sale

If you’re buying a home for sale in Orlando, Baldwin Park or Longwood (or anywhere else in central Florida), you’ll have to put down an earnest money deposit to show the seller you’re serious.

But what is earnest money, where does it go, and do you ever get it back?

What You Need to Know About Earnest Money Deposits

An earnest money deposit, commonly called a good faith deposit, is money you put down on a home to show a seller that you’re serious about buying. It’s not the same as your down payment; this is money that comes out of your pocket before you even obtain financing on the home. You include your earnest money with your purchase offer.

If you’re like most people, you need to know:

  • How much an earnest money deposit costs
  • Who holds your earnest money
  • What happens to your earnest money deposit when you buy – or don’t buy – the home

How Much Does an Earnest Money Deposit Cost?

You can expect to spend between 3 and 5 percent of the home’s purchase price on an earnest money deposit. Let’s say you’re making an offer on a home that costs $100,000. Your earnest money deposit should generally be between $3,000 and $5,000.

The amount you put down as earnest money can – and will – vary based on the home you’re buying, how much the house costs, and even the neighborhood it’s in. When you find a home you love, talk to your Orlando Realtor® about how much you should put down as an earnest money deposit – he’ll be able to give you the guidance you need.

Who Holds an Earnest Money Deposit?

You never, ever give your earnest money deposit directly to the seller, even if you’re buying a For-Sale-By-Owner home. Instead, you give your Realtor a certified check or money order. Your agent will then give it to his or her broker, or the seller’s broker, who will put it in an escrow account that nobody can touch. The seller can’t access it, and neither can you. The money sits in escrow until closing day.

What Happens to Your Earnest Money Deposit When You Close on the Home?

When you close on the home, your earnest money deposit still belongs to you. The money you put down will be applied to your:

  • Down payment
  • Closing costs
  • Other fees
  • Mortgage payments

The money never goes to the seller. You only needed to kick out some of your own cash to show the seller you were serious about buying his or her home; that way, the seller could be comfortable taking the home off the market and preventing other buyers from making offers on it.

What Happens to Your Earnest Money Deposit if You Don’t Buy the Home?

In some cases, you can back out of a real estate transaction with your earnest money intact. However, in others, you’ll lose your earnest money deposit to the seller.

Contingencies

If your agent has built contingencies in your real estate purchase contract, such as a financing contingency, an appraisal contingency or an inspection contingency, and one of those provides an “out” for you to back out of the deal, you should be able to keep your earnest money. Your agent will ensure that it’s returned to you as quickly as possible.

Some ways you can get out of a real estate purchase contract because of a contingency include a low appraisal, bad results in a home inspection, or a failure to obtain financing within a certain time frame.

No Contingencies

If you simply get “cold feet” and want to back out of the real estate transaction without a solid reason, the seller may be entitled to keep your earnest money deposit as compensation for having turned away other buyers who would likely have purchased the home.

The bottom line: Before you make an offer on a home and hand over your earnest money deposit, talk to your Realtor and be sure you’re making the right decision. You should be 100 percent invested in buying a home before you come up with an earnest money deposit.

Are You Buying a Home in Orlando?

If you’re thinking about buying a home in Orlando or any of the surrounding communities, we’d love to help you find something that’s just perfect for your needs.

Call us at 407-529-4621 or contact us online to tell us what you’re looking for. In the meantime, explore our:

  • Homes for sale in Alaqua Country Club
  • Homes for sale at Bay Hill Club
  • Country Club of Orlando homes for sale
  • Homes for sale at Keenes Pointe Golf Club
  • Isleworth Country Club homes for sale
  • Sweetwater Golf and Country Club homes for sale
  • Homes for sale at Heathrow and Legacy Clubs

 

 

Posted in: Luxury Real Estate Orlando Tagged: Appraisal Contingency, Contingencies, Earnest Money, Financing Contingency, Inspection Contingency, Real Estate Purchase Contract

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About Abr Orlando

We love working with Buyers and have worked hard to develop the skills necessary to assist our clients. All of us at Accredited Buyers Representative-Orlando LLC are certified as ABR®’s or working towards that and other NAR Designations to help you find your perfect spot. This short video highlights some of the important benefits of working with an ABR® when buying your next home. Education and Experience produce results for our clients.

ABR Orlando
1936 Lee Road Suite 100
Winter Park, FL 32789
Email: dave.hoyle@abr-orlando.com
Phone: 407-529-4621

  

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