You probably spent much time getting disciplined to save money for your home purchase. You must carry this financial discipline through the escrow period, or you could encounter problems.
Budget for Closing Costs – Property Taxes, Legal Fees, and Such
When you decided to purchase a home, you went through several steps to get your finances in order. You probably reviewed your credit report, reduced credit card balances, and reigned your spending. A monthly budget was probably also an item you stuck to, probably with some aggravation. Once you accept an offer for a home, you must keep budgeting for the closing costs associated with the purchase. Here are a couple of odd little fees that can show up and drive you up the wall if you are not careful.
Being required to pay property taxes can be a nasty little surprise. After all, you do not even own the home yet! The requirement, however, comes because of how property taxes are paid. They are not paid every month, so the seller has prepaid the taxes beyond the period they will own the home. They will want that money back! You can negotiate this point as part of the purchase, but you must know it is out there.
In some states, a legal requirement requires a lawyer to represent you in a real estate transaction. This requirement primarily exists in the East. Regardless, attorneys are expensive, and you need to have money set aside to pay their fees. In truth, retaining a lawyer is a good idea since they tend to sniff out any questionable issues in the transaction. Fees can run from a couple of hundred bucks to thousands of dollars.
In addition to the above, there are a lot of small fees associated with closing. They can run from several hundred dollars paid to the escrow company to $20 or so for notary fees. If you do not keep an eye out, they can add up quickly to a few thousand dollars.
Closing on a home can be aggravating with all the costs you have to pay. It will all be worth it when you first walk into your new home.