Buying a home involves several key expenses that potential homebuyers should understand. Here are the four main expenses discussed:
1. Earnest Money
Earnest money is typically about 1% of the home’s purchase price, demonstrating the buyer’s serious intent to purchase[2][6][8]. This money is held in an escrow account during the buying process and will later be applied to closing costs or down payment.
2. Home Inspection
A critical due diligence step, a home inspection costs between $300 and $500. A licensed inspector thoroughly examines the property’s:
- Plumbing
- Electrical systems
- Foundation
- Walls
The inspection provides a comprehensive report on the home’s condition, helping buyers understand potential issues before finalizing the purchase.
3. Down Payment
Down payment requirements vary widely:
- Can range from 0% to 20%
- Some loan products offer zero-percent options
- Others require 3.5% to 20% down
- The specific amount depends on the loan type and lender
4. Buyer Closing Costs
Closing costs in Indiana typically range from 2% to 5% of the home’s purchase price. These expenses include:
- Title and settlement services
- Appraisal fees
- Lending fees
- Points
- Other transaction-related services
For a median home price in Indiana of $248,332, closing costs could range from $4,967 to $12,417.
Pro Tip: Always consult with a local real estate professional to understand the specific costs and requirements in your market.