There are times during a real estate transaction when you will be required to spend money. Some are deposits, some are fees, and some are refundable.

At offer:

When you make an offer, you will provide a deposit check for $1000 or $5000, depending on your price range. That check is not cashed unless your offer is accepted. That $1000-5000 is refunded if you choose to exercise your inspection contingency before that deadline or if you do not get a mortgage before your mortgage contingency date.

At Purchase and Sales Agreement:

When you sign the Purchase and Sales Agreement, you will provide a deposit check for approximately five percent of the purchase price. That five percent, plus the initial $1000-5000 deposit, is refunded if you cannot get a mortgage and your attorney notifies the seller’s attorney before the end of the mortgage contingency deadline.

With your lender:

  • Pre-approval: Some lenders will charge a nominal fee ($30-50) for a pre-approval to cover the cost of the credit report. Most do not. This is not refundable. Most lenders do not have this charge.
  • Application: Most lenders have an application fee. This can range from $200 up to $600. This is not refundable in most cases. At this time, you may also be asked to pay for your appraisal. $300-700.
  • At closing: The fees and escrows that make up your final closing costs are listed on your Good Faith Estimate. You will receive a Good Faith Estimate when you apply for your mortgage. A fee is an expense for the mortgage. An escrow is the pre-payment of bills that will be paid with your mortgage, such as municipal taxes and homeowner’s insurance. Fees and escrows vary wildly, depending on the property and mortgage you choose. A typical closing cost total is $6000-8000.

With your attorney:

Some attorneys will discount the cost of preparing your Purchase and Sales Agreement if he or she can also do your closing. As a buyer, you will be paying the attorney who closes for (and represents) the lender at closing as part of your closing costs. Attorney’s fees vary a great deal, some charge by the hour, some by the transaction. Expect to pay $1000 for the Purchase and Sales preparation (and condo doc review), plus $350-700 for the closing attorney (included in the lender’s closing costs.)