By: Jeanette Joy Fisher

If you’re home shopping or in the process of buying property, you want to make sure you have all your costs covered.

Home buyer’s who purchase a home without a real estate agent (or sometimes purchase through an inexperienced agent) can find out too late they don’t have enough money to close and move.

10 most overlooked costs home buyers miss:

1.) Property Taxes and Assessments

Home buyers often need to set up an escrow account with the new mortgage lender. This means that they must pay a portion of taxes upfront. In some states, the seller has already paid the local taxes and this amount must be paid back to the seller at closing. Also, some counties have transfer taxes whenever a property changes hands.

2.) Insurance

Fire insurance or a homeowner’s insurance policy usually needs to be paid for up front. Although you may be able to get an insurance binder from your company on a payment plan, most mortgage companies require the first year paid during escrow or closing.

3.) Appraisal Fees

Mortgage lenders require appraisals to make sure your property covers your loan amount plus their investment risk. The buyer normally pays between $150-$450 to the appraiser.

4.) Survey Fees

Some lenders require a property survey. You may also want a survey if the property lines are in question. Survey fees vary from $600-$2,500, or more for large parcels.

5.) Septic System Certification

If your new property does not connect to public sewers, you may need a septic clearance for your lender. Often the home seller pays this cost, but you want to make sure you get no hidden charges or surprises.

6.) Water Quality Certification

The same holds true for properties with a well and not public water service. For your own piece of mind, you will want to check the water quality and have this clause as a condition in your purchase contract. Not only do you want to make sure the water quality passes, you want to make sure the well has plenty of flow so you don’t run out of water.

7.) Miscellaneous Origination and Loan Fees

Your mortgage lender adds fees for processing your loan, document preparation, underwriting, closing, funding, and sometimes “garbage fees.” Check your estimated costs statements and look for hidden fees. Before committing to a lender, shop for your best loan and compare lender’s costs.

8.) Association and Maintenance Fees

Most buyers understand that a condo comes with association fees. However, some housing developments also charge maintenance fees. Don’t assume that the fees will be nominal. Many condos in California have association fees over $400 per month. Some of these fees need to be paid annually, which means a home buyer needs to pay upfront.

9.) Utility Service Fees

Check your hook up and installation fees for water, gas, electricity, cable or satellite TV, phone, trash, sewer and other services. Sometimes the water department covers the sewer and trash service. These fees quickly add up and you don’t want any surprises like a $340 water deposit required by some companies.

10.) Moving Costs

Plan your move before committing to a purchase. Know whether you can move yourself or need to hire professional movers. You may be shocked to find out the costs involved. Ask for referrals of clients and check out moving companies. Prices for truck rental and moving companies vary.

Make sure you have all your purchase and moving costs covered before you make an offer to purchase a home. You don’t want to find out when it’s too late that you need more money.

About the Author:
Jeanette Fisher teaches first-time home buyers and beginning real estate investors the six steps to home financing. FRE.E Ebook, “Credit Tips for Mortgage Financing.” http://www.recredithelp.com

By: Jeanette Joy Fisher

Before you list you home for sale, determine what you don’t want to leave behind.

Our friends sold their home for full price and moved out a few days before closing.

The next day they received an angry call from the selling agent telling them that they had to bring a mirror back before the sale would close. When the home buyers did their final walk through, they refused to make their down payment because a large mirror had been taken down.

This mirror, an antique family heirloom, was never considered by the sellers as part of the sale. The seller refused to give her grandmother’s mirror back.

However, their sales contract, a standard Home Purchase Contract with Terms and Conditions, included all attachments. The mirror was considered by the buyers and their agent as part of the sale. The mirror did not hang like a painting on a nail. The heavy mirror had been screwed into the wall with the screw heads covered with fancy wooden circles cut to match the wood frame.

The buyers refused to budge. Our friends refused to budge protesting that their listing agent knew the mirror had belonged to the seller’s grandmother. (Their agent was a family member.) The sellers pointed out that their agent should have told them that the mirror was considered “attached.” After three days of quibbling and negotiations, the listing agent agreed to forfeit $3,000 of her commission and the sellers dropped the price by $2,000.

Decide what goes to your next home and what you agree to leave behind, before you offer your home for sale. Take down any attachments that you don’t want to part with, such as any item screwed into a wall or a light fixture permanently wired. What a home buyer doesn’t see, they won’t expect to buy with your home.

About the Author:
Jeanette Fisher teaches real estate investing and interior design college courses. She is the author of Sell Your Home for Top Dollar–FAST! and other books. For a free report, “Design Psychology for Selling Houses,” visit http://sellfast.info

By: Jeanette Joy Fisher

If you’re thinking about selling your home and moving up to a larger home, do your math homework before offering your home for sale. Read the following story to see what can happen to home sellers who don’t do their math.

A young family sold their home in California, before they determined how to buy their next house. All they thought about was moving into a larger home for their growing family.

Two years before, after this young couple purchased their first home, they bought a minivan with payments. They increased their credit card debt with home furnishings purchases. Then, the wife quit working to stay home with their new baby. The family still had sufficient money to make all payments on time.

They fell in love with a larger new model home in a nearby tract home development. The sales agent convinced them the new home would only cost them another $200 per month.

The family had no trouble selling their home. To qualify for the new home mortgage payment, they had to pay off the minivan, student loans, and the credit card debt. Out of their home sale proceeds, these payoffs left less than a 10% down payment for their new home.

Because of their changed income and low down payment, they didn’t qualify for the new home of their choice. With only 5% down, the couple had to pay higher interest rates on a second to avoid mortgage insurance. Without the wife’s second income, the total payment meant that they only qualified for a new mortgage for a home which cost less than the one they sold!

Before you put your home on the market, make sure you can buy the home you want.

Consider the following financial concerns:

Talk to a loan officer and check your credit. Don’t get caught after selling your home, when it’s too late, to repair any credit issues. Of course, you may have a great down payment from the sale of your home, but other bills like credit card debt, auto loans, and student loans may need to be paid off so you qualify for the new mortgage payments.

Ask your loan officer how much of a monthly payment and the down payment amount you’ll need to buy the home of your choice.

Do your math. How much can you expect to net from selling your home?

1. Do you have a mortgage pre-payment penalty that could eat up a significant amount of your equity?

2. Determine selling commission expenses. Can you sell your home effectively on your own or do you need to pay 4-6% of your selling price for a real estate agent’s expertise?

3. Estimate your closing costs. Ask a local closing or escrow company for an estimated closing cost amount for a home in your price range.

4. How much work does your home need to ready the property for a top-dollar sale? Which upgrades or redecorating expenses make sense financially?

Consider all the expenses of selling, determine your actual profit, and compare that amount to your required down payment. How much of a home you can buy with your qualified monthly payment amount?

After you do your math homework, you’ll be ready to think about selling your home. Don’t get caught like this young family and be forced into a smaller home.

About the Author:
Jeanette Fisher helps stage homes for top-dollar sales. She teaches Design Psychology and real estate investing. Jeanette is the author of many books including “Sell Your Home for Top Dollar–FAST! and Credit Help! Get the Credit You Need to Buy Real Estate http://recredithelp.com Free “Credit Tips for Mortgage Financing” http://sellfast.info