• Kara H

4 Upfront Costs to Buying a Home

Updated: Dec 4, 2019

Congratulations! You've made the decision to buy a home, and you've even saved up the downpayment. While I hate to add on to the burden of a homebuyer, I find it helpful to disclose a few other costs that are involved in a home purchase.

While most of the cost of purchasing a home occurs on closing day, there are a few items that are paid for upfront during the process. Don't let these expenses catch you off guard and ruin your home buying experience!

For more information on the home buying process, make sure to check out my Home Buyer Guide

Earnest Money Deposit

Earnest money is provided by the buyer at the start of the contract to show that they are serious about purchasing the home. It is held in escrow during the transaction by one of the brokerages or closings attorneys. The money acts as a good faith gesture to the seller that you will complete the transaction. If the buyer terminates the contract for a reason not allowed, the seller may be able to keep this money. If all goes well and the contract proceeds to closing, the earnest money will be credited to the buyer at closing.

The amount of Earnest money provided by the buyer is negotiable and specific to each sale. A typical amount to provide is 1% of the purchase price.

The contract you sign as a buyer has several built in protections for you. Unfortunately, not all contracts get to the closing table, but if the contract is terminated for a reason allowed you will be refunded your earnest money.

Possible reasons you are allowed to terminate the contract:

  • Unable to obtain financing

  • Home does not appraise

  • Seller does not meet agreed upon terms during appropriate timeline Seller does not obtain clear title

Reasons you are not allowed to terminate the contract:

  • You change your mind

  • You find another house you like better School district changes

  • Unplanned divorce

  • Job transfers

Home Inspection

A Home Inspection should be scheduled ASAP. The home inspector will come to the home during the appointment time and inspect all major systems of the house: The home's structure, roof, electrical, plumbing, heating and sir systems, and appliances should all be evaluated. Every home inspector is different, so make sure you ask what will be included in the inspection. After the inspection, the inspector will issue a report with his findings. In most cases, you will have the opportunity to ask for repairs to be made by the seller. This is another important part of negotiation, and your realtor will guide you through the process.

The cost of your home inspection will depend on several factors such as the size of the home, the type of foundation, and the age of the home. Most home inspections range from $350 - $500 in the Charleston market. This may seem like a lot of money, but it’s 100% worth it!


Your contract is likely contingent on an appraisal, and the house must appraise for the purchase price in order for the contract to move forward. This step protects you as a buyer and is usually required by your lender since they are the ones investing their money into the home. Your lender will schedule the appraisal and send you a copy of the report once completed.

If for some reason the appraisal comes back under the purchase price, you as a buyer may have the option to renegotiate the purchase price or terminate the contract. Some types of loans have more strict criteria than others for this process, but your lender and your realtor will be able to provide you with more information specific to your circumstances

Most appraisals are $400 - $600, but the exact amount will depend on your lender.

Moving Costs and Utilities

These costs vary significantly based on the area and company, but don’t neglect to set aside money needed to connect utilities, pack your belongings, and move. Even without professional movers, moving costs can sometimes come as a surprise to new homeowners. Keep your stress levels low by planning for these expenses ahead of time.

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Charleston, SC Realtor, Social Media Consultant, Dog Mom, Food Lover, Life Enthusiast, and Entrepreneur...in no particular order.


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