Important Costs Every Home Buyer Should Know

Buying a house in any real estate market is an exciting adventure to find that perfect first home, second home or investment property. Throw in today’s “buyer’s market” and the additional opportunity can really make your home search that much more exciting. Below are the typical fixed costs to expect when buying property in New Hampshire.

NH State Transfer Tax is $1.50 per hundred of the sales price of the property. This is split 50/50 between the buyer and seller. A quick way to figure out what your cost would be is the following:  Sales Price x 0.0075 = NH State Transfer Tax due at closing. $300,000 x 0.0075= $2,250.

Appraisal- If you are financing the purchase you will have to pay for a bank appraisal to verify that the price you are paying is of realistic value. This cost typically ranges from $350 to $500. If you are paying cash and want to make sure you are purchasing at the correct value you can still make your offer contingent upon a satisfactory appraisal.

Home Inspection - This is one of the most important parts of your home purchase. The home inspector will spend hours at the property going through every part of the house to make sure there aren’t any major problems. Along with the home inspection, typically the inspector will also take care of testing the water quality at the property and testing for Radon Air and Radon Water. When you add up all these tests you are looking at around $700+/- for your home inspection.

Septic Inspection- The inspectors for this will come out to the site and will dig down to the septic tank to check the water level and baffles. They will also dig down into the leach field to check and make sure the system is leaching properly. The average cost for a septic inspection  is generally around $200 to $300.

Title Search - You cannot own the property unless it has a clear title. Below is what a title search entails.

• Does the seller have a saleable interest in the property?
• What kind of restrictions or allowances pertain to the use of the land (real covenants, easements, or other servitude’s)?
• Do any liens exist on the property which need to be paid off at closing (mortgages, back taxes, mechanic’s liens, or other assessments)?
• Does the seller have a saleable interest in the property? What kind of restrictions or allowances pertain to the use of the land (real covenants, easements, or other servitude’s)? Do any liens exist on the property which need to be paid off at closing (mortgages, back taxes, mechanic’s liens, or other assessments)?

Typically the cost I have seen for the title search is around $500+/-

So when you add all of this up on a $300,000 home purchase you are looking at around$4,100 +/- for your typical fixed costs. If you are financing bear in mind that the banks like to escrow 6 months of taxes up front and if you need mortgage insurance (PMI) some banks also like to escrow 6 months of this at closing.

One more cost that pops up is at closing is that as the buyer, you are required to pay the seller for whatever fuel is left in the tank. The price per gallon is based off what the seller orginally paid for that fuel. This cost is sometimes reflected on the closing statement or at closing you just give your check to the seller.

When working with a lender it is in your best interest to give them any and all documentation required by the bank to obtain the loan as soon as possible. If you are self employed one thing that is important to know is the banks will verify your income with the IRS.

I hope this helps those of you who are thinking about buying property or are already taking advantage of this buyer’s market. If you have any questions or think I might have missed something, please let me know

-Dan
603-252-6428