Today I want to discuss the fees and costs associated with buying a home. Besides your down payment, you will have some fees and costs you’ll need to pay upfront and also in closing. 

There are three upfront fees:

  1. Initial deposit. This is generally 1% to 3% of the purchase price. You submit this to escrow within three days of receiving an acceptance. 

  1. Appraisal. This is frequently paid directly to the lender, is non-refundable, and is commonly around $500 to $600 paid out of pocket or on your credit card. 

  1. Money for inspections. This is due at the time of service to the inspector. Inspections may include the home inspection, plumbing inspection, and/or electrical inspection.

After these upfront costs, you’ll also have closing costs. There are four different categories of closing costs:

  1. Title fees. What’s customary in Southern California is for the seller to pay for the owner’s title policy, but if you’re getting a loan, the buyer is paying for the buyer’s lender policy. 

  1. Escrow fees. In Southern California, it’s common for escrow to be split 50-50. This is one of the larger costs of closing. 

  1. Lender fees. You’ll need to go over this with your lender. Your lender may have underwriting fees, document preparation fees, and/or origination fees. You don’t want to be surprised by these.

  1. Prepaid items. The escrow may require that you prepay taxes for a few months or your homeowner’s insurance, so be prepared for that. 

If you’re thinking about buying a home, please give me a call or send me an email. I look forward to speaking with you and walking you through the process. 

This content is not the product of the National Association of REALTORS®, and may not reflect NAR's viewpoint or position on these topics and NAR does not verify the accuracy of the content.