Home Buying Process & Closing Costs

Fees of HomebuyingMost home buyers are unaware that it's taking 50% longer to close an escrow on a home than it did two years ago.  Buyers need to know their obligations for out-of-pocket expenses, earnest money deposits, appraisal hurdles, and how negotiations work. The more thorough you are in this part of your presentation, the less emotional drama and hang-ups you will have as you are going through the buying process. Steph Kaye & Associates can't prepare you for everything, but we can ease your stress by laying out a timeline and few scenarios that will help you understand the home buying process and closing costs involved.

Fees of Home Buying: Contract To Close

Between the time your contract is signed and the purchase closes, a number of fees will be required. It's important to have these funds available and ready to complete the home purchase process.

Here's what you'll need to have prepared:

  • Minimum Earnest Money Deposit: $1000.00 or 3% of the purchase price.
  • Home Inspection Fee: $300.00-$400.00.
  • Appraisal: $350.00-$500.00.
  • First year’s Homeowners Insurance: ~$600.00-$1500.00. (Dependent upon Sales Price)
  • Locksmith: Call your local locksmith three days prior to closing.
  • Utilities: Call Consumers Energy @ 800-477-5050 and/or DTE @ 800-477-4747 three days prior closing.

In the majority of cases, Steph Kaye & Associates can get the seller to pay for most, and sometimes all, of your closing costs, prepaid items and prorations. These may include, but are not limited to, the following costs:

  • Lender title policy.
  • Lender origination fee.
  • Pre-paid interest.
  • Escrow funds.
  • Reimbursement to seller for taxes.

Seller's Contribution Limits

There is a limit on the contributions that sellers can make towards the buyers cost. These vary by mortgage type and maximum, and are as follows:

  • With a 3.5% down payment FHA Mortgage, we can get the seller to contribute up to 6% of the purchase price.
  • A conventional 5-10% down payment allows us to get the seller to contribute up to 3% of the purchase price.
  • In a conventional 20% down mortgage, we can get the seller to contribute up to 6% of the purchase price.
  • Contribution amounts for short sales vary, but can't exceed 3%.

Want to know more about the closing process? Contact Steph Kaye & Associates today and we will answer your questions.