William's Places: The True Cost of Buying A Home

The True Cost of Buying A Home

The True Cost of Buying a Home


Do buyers really understand the costs involved in buying a home? Reflecting on my own home-buying experience, and thinking about the experience that I’ve had with a recent buyer in getting them the house that they want, has turned on a light bulb of sorts in my head. There are sooo many costs involved with buying a home that most people aren’t aware of when they first start on their home-buying journey.


The problem isn’t that Realtors don’t explain the costs. We actually do, but it is the way in which we do it that causes the most confusion for most buyers. Or maybe it’s just my relative lack of experience that’s surfacing? I am not so sure which one it is, but I do know that a detailed explanation should be provided in writing of the true cost of buying a home.


There are five different items which you will need to have money up-front for. In the order which you will need cash on hand for those items, they are:  

1.     Down Payment

2.     Appraisal

3.     Home Insurance

4.     Home Inspection

5.     Closing Costs: which include

a.     Attorney’s Fees for title search and insurance, and representation

b.     Prorated taxes already paid by the seller

c.      Other prepaid items, such as oil/gas


Each of those items will vary, depending on the type of home you are purchasing, and other variables. Such as the type of financing you are using. Conventional, FHA, VA, and USDA all have different requirements for down payment amounts. Appraisals usually run anywhere from $200 to $500, depending on the area and type of property being appraised. Same thing applies when it comes to home insurance. Seller concessions may reduce the total amount of closing costs that you will have to pay, dependent on the terms that your realtor negotiates in the contract to purchase.


As a buyer, you should have this discussion with your realtor at the beginning of the home buying process. Doing so will allow you to prepare, or be prepared, for  all of the nuances of buying a home, and will help to eliminate any last minute surprises and help you to achieve your goal of owning a home with much less stress.

Greater Waterbury CT Real Estate FaceBook William James Walton, Sr. on LinkedIn William James Walton, Sr. on Twitter William  James Walton's videos on YouTube 




Courtesy of William James Walton, Sr. , Realtor, WEICHERT, REALTORS® - Briotti Group

Serving northern New Haven and southeastern Litchfield Counties (Waterbury, Wolcott, Prospect, Naugatuck, Middlebury, Southbury, Watertown, Thomaston and Plymouth)


Call William James Walton, Sr. Real Estate Agent with WEICHERT, REALTORS® - Briotti Group (203) 558-7463 for help with your real estate needs -buying or selling -  in Waterbury, Watertown, Wolcott, Middlebury, Southbury, Prospect, Naugatuck, Plymouth and Thomaston

Buyers - Search for Greater Waterbury, CT Area Homes For Sale

Sellers - Request a Free Home Evaluation, Look at Recent Home Sales

Comment balloon 11 commentsWilliam James Walton Sr. • February 27 2010 10:56PM


Busy night for you! Another great post full of awesome information.

Posted by Cindy Cranston (Fulmer Realty- Floresville, LaVernia, San Antonio) about 10 years ago

I always take the time to have a preliminary consultation with all buyers.  It customarily is 1-2 hours. It is important for buyers to under the process and all of the costs.  

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) about 10 years ago

William-  You are right that buyers need to be aware at the beginning of their home search that there are costs they will have to pay for up front.  Some buyers are not the slightest bit aware that they will need to put down earnest money when they get their offer accepted.  In WI, the title work is largely paid for by the seller, with the buyer only being responsible for paying for the lender's policy and the deed being recorded.  Closing costs is a big one that buyers ask me about a lot.  I always have them speak with their lender about this, as each lender and loan program vary so much. 

Posted by Jen Olson (First Weber Group Realtors) about 10 years ago

William, way too often first time buyers approach the process with the same mindset of a rental, not being familiar with the process. Not only letting them have an idea upfront about the nature of the costs involved and the types of programs available to help them, but also having them appreciate the estimate of monthly costs associated with the purchase after the sale. Home ownership has so many benefits, but all the costs must be covered.

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) about 10 years ago

Great information, William.  You are right on when posing the question, "Do buyers really understand the costs involved in buying a home? So many people don't have a clue.  Thanks for sharing, and have a great week.


Posted by Eldon Hendrix (Hendrix and sons Home Inspections) about 10 years ago

William that is a good list but I would add a couple of more things to it.  Title Insurance, Recording Fees, Bank Fees, and besides the prorated taxes that will be paid to the Sellers, there will also be taxes and insurance that will be collected at the closing to be escrowed.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 10 years ago

William -


Great information here for buyers. They really need to know their out of pocket expense.

Posted by Loreena and Michael Yeo, Real Estate Agents (3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co.) almost 10 years ago

It is always good to have buyer consultation to make your client aware of this before you go look at the first house.

Posted by Team Honeycutt (Allen Tate) almost 10 years ago

Joan is right on, and so are you. It is extremely important that we explain the process and details to home buyers. Especially international and first time buyers. I normally send out about 3 emails loaded with information about the process before I meet a buyer. By then, they have had a chance to do some homework and it's just a matter of answering their questions. Just like a foundation is important to a house, a foundation of knowledge is important to a home buyer (or seller for that matter).

Posted by Nathan Tutas, Your Central Florida Real Estate Expert (Tutas Towne Realty, Inc.) almost 10 years ago

Excellent advice.  We should educate Buyers concerning the process, as early as possible.  Margaret C.

Posted by Margaret C. Taylor, St Marys/Calvert/Charles MD Real Estate Agent (Century 21 New Millennium MD) almost 10 years ago

I think it isn't the cost of buying the home that surprises people it is the cost of actually owning a home that surprises people. I think people need to add at least 10% to their budget when buying their first home or they maybe surprised how difficult it is to keep up with everything.

Posted by George & Arlene Paukert (Road to Wealth, Inc.) almost 10 years ago