Stacey-Ann's Blog


Costs involved in buying a home

I work with mostly first-time homebuyers who are not familiar with the process of buying a home and who may be confused about how much money they may need to be able to buy.

DOWN PAYMENT - The minimum down-payment is usually 3.5% of the purchase price.  However, this can range from as little as 0% to as much as 20% of the price depending on the type of loan.  There are some programs available that assist with down-payment.  The Down Payment on your DREAM program in PG County is an example of a down-payment assistance program for first-time home buyers purchasing a vacant foreclosure in the County.

CLOSING COSTS - Closing costs are the costs associated with purchasing the home, acquiring the mortgage, purchasing title insurance, as well as any state or city taxes involved.  These costs vary by location and depending on your mortgage arrangements but usually run between 3% and 6% of the purchase price.  Sometimes arrangements can be made to have the seller assist the buyer with some or all of the closing costs.

EARNEST MONEY DEPOSIT - This deposit is submitted with the offer.  The deposit is held in escrow and credited towards the buyer's down payment and/or closing costs.  However, this check is cashed following acceptance of the offer.  The seller may be entitled to the deposit if the buyer defaults on the contract.  This deposit is usually a minimum of 1% of the purchase price and the amount may need to be increased in competitive situations.

HOME INSPECTION - This is paid for by the buyer at the time of inspection.  The costs involved vary depending on the size and purchase price of the home but cost approximately $250-$500.

TERMITE INSPECTION - Many mortgages require a termite inspection.  This can either be billed to the closing company and paid at the settlement table or paid for up front.  The costs range from $35-$55.

OTHER INSPECTIONS - Any additional inspections that the buyer is interested in having done are paid for by the buyer.  These may include radon inspections which can cost between $125 and $200, mold inspections, well water tests, septic system evaluations, chimney inspections, and anything else the buyer is interested in investigating prior to committing to purchase the home.

APPRAISAL - A few lenders will have the appraisal paid for at closing.  However, many lenders will have the buyers pay for this up-front.  That way if something goes wrong with the contract the lender is not stuck with the cost of the appraisal.  This can vary in cost from approximately $350-$550.


If you are interested in learning more about purchasing a home  or for more information about the down-payment assistance programs available in Prince George's County, MD don't hesitate to contact me.

If you or someone you know would like information about buying, selling, or renting a home in Prince George's, Montgomery,  Charles, Calvert, Anne Arundel, Howard, and/or Baltimore Counties please contact Dr. Stacey-Ann Baugh of Century 21 New Millennium.


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Donations made to charity with every successful closing!

Dr. Stacey-Ann Baugh

Century 21 New Millennium

240-481-3565 (C)

202-546-0055 (O)




Information deemed reliable but not guaranteed! 




Comment balloon 5 commentsDr. Stacey-Ann Baugh • October 19 2009 07:17PM


Hi Stacey-Ann, This is an excellent post and good info.  I am amazed to find that occasionally a buyer or seller has no clue at all and their agent has not informed them that these costs will be incurred.

Posted by Susan Neal, Fair Oaks CA & Sacramento Area Real Estate Broker (RE/MAX Gold, Fair Oaks) about 9 years ago

Hi Stacey-Ann...good list.  I find that it is so important to spend more time upfront with first time home buyers.  I always want to make sure there are no surprises at closing!

Posted by Lisa Matykiewicz (United Brokers Group) about 9 years ago

I  have had several buyers lately that, even though they have purchased a home before, are not prepared for the costs. Good list.

Posted by 1 ~Judi & Don Barrett & Chassy Eastep - Integrity, BS Ed, Integrity Real Estate Services -IDABEL OK (Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745) about 9 years ago

A thorough list that prepares the expectant buyer... very good!  First timers need to understand what it all entails.  Thanks for sharing!

Posted by Diane Rice, SFR, SRES, CNC ( Rice Prprty Mgmnt & Rlty, LLC, South Holland, IL) about 9 years ago

Susan - I am always amazed at how few people know what's involved in buying the home

Lisa - I think even with good faith estimates, etc.  Many buyers are shocked at the amount of money they need to bring at closing

Judi - I think people quickly forget what is involved

Diane - thanks for the reblog

Posted by Dr. Stacey-Ann Baugh, A doctor who makes house calls. (Century 21 New Millennium) about 9 years ago

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