Costs to Buy a House

The other day I was reminded again of how buying a home in the Phoenix Real Estate market isn’t like buying anything else most people buy. And I remember when I looked at Phoenix Arizona Homes  and bought my first house – I was so surprised and stressed out by all the money I spent before I even bought the house. So, for everyone that has never bought a house, here is a quick run-down of typical expenses you may need to pay in addition to paying for the house.

The first expense you’ll get is the earnest money deposit. This is due when you make an offer, and it is typically $1000 or 1%, whichever is greater.  This is actually part of the purchase price of the home, but you pay it well before the rest of the money is needed.

The next expense you’ll get is deposits for turning on the utilities if the seller has turned them off.  This can run from $30 to $200 for each service you’re connecting — electric, water and gas. These need to be on for the inspection and then turned back off until closing.

After that, you’ll pay the inspectors, for their inspection reports. These reports run about $350 – $400, for a basic inspection plus a termite inspection. If the property has a pool, that runs another $50-$60.  This isn’t a required expense, but highly recommended to have someone inspect the home and spot any problems that might not be so obvious. The inspector may recommend getting further evaluations from specialists such as a structural engineer, air conditioning technician, or a roofer, depending of course on the findings in the initial inspection.

Finally, if you are getting a loan, your lender will require an appraisal, which runs $400-$500 and also needs to be done and paid for before closing.

So when you add all that up, it costs $1900 – $2600, to cover the out-of-pocket expenses that are needed before you even pay for the house itself.  Even if you take the $1000 earnest money out of those figures, it still adds up to $900 – $1600, which is a lot of money that most people who haven’t done it before aren’t aware of, and haven’t budgeted for.

Our Phoenix AZ Realtors are experts at helping you find the gems in the Phoenix MLS as you look for Phoenix Homes for Sale.  What’s more, they have many more tips to share with you if you are looking to make a home purchase. Contact us at or 480-776-5214. We’d love to help.


Want to increase your net profit? Control those costs!

My grandfather once taught me “a penny saved is a penny earned.” Nowhere is that more true than in the sale of a home, probably due to the number of pennies involved in the transaction. With sales price being such an important factor for a seller, few stop to think about ways to minimize the costs of selling their Phoenix Arizona Homes. Monitoring and controlling the costs in the sale is key to saving thousands of dollars and to receiving larger net proceeds from the transaction. Here are some costs to keep your eye on.

One of the largest costs is commissions paid to the Phoenix Real Estate agents. Commissions vary from 4%-7% of sales price depending on the type of real estate transaction. While lower costs may seem like a winner, many times you get what you pay for. With so much riding on the selling price, Phoenix AZ Realtors should bring great service, a solid marketing plan and sharp negotiating skills to the table. If your agent is bringing less to the table you may also see a lower sales price.

With every home sale, home owners are required to pay the Owner’s Title Policy and to share in the escrow fee paid to the local title/escrow company. While the fees are not negotiable, the title/escrow company used to process the transaction is negotiable. All title/escrow companies publish their fees in rate books which are readily available to review and compare.

Do you live in a Home Owners Association (HOA)? If so, then your HOA may charge a transfer fee, disclosure fee, or capital improvement fee. Few homeowners understand what their HOA will charge them for the transaction but charges may run from $500-$2000. A quick phone call to the HOA should clarify what fees are charged. While these fees are non-negotiable with the HOA, there is the possibility of negotiating/sharing the cost of these fees with the buyer for your home.

For most Phoenix Homes for Sale a Home Warranty is considered a must purchase for the new buyer. The cost ranges from $325-$600 and is a negotiated item payable by the buyer or the seller. Many times home sellers pick up the cost of a Home Warranty for the first year to protect the new buyer from unforeseen repairs.

Are you in an area where first-time home buyers are known to be moving? The Phoenix MLS will show history of recent purchases in your area if you are unsure. If so, you may want to prepare yourself for requests to contribute to the buyer’s closing costs. These contributions are generally up to 3% of purchase price and could be more. The contribution covers appraisal fees, A.L.T.A. title policy, impound accounts, origination fees and other loan costs. While the contribution to buyer loan costs can be very important to getting a home sold, stronger buyers rarely need such assistance.

Do you want to learn more about ways to control your selling costs and get the most money from the sale of your home? Contact us at (480) 776-5214 or