Why You Should Save Up Extra When Buying or Selling a Home

Are you trying to figure out how much money you should have saved up before you try to buy a home? Most people don’t pay for an entire home out of pocket, but you still need to have some money saved to pay for different expenses that come along with buying a home. Here are a few reasons why you should save up extra money when you’re buying or selling a home.

Closing Costs

First of all, you’ll have some expenses that will come along with closing costs. When you finalize everything with your house sale (or purchase) you’ll be going through the closing processes. Some costs come along with those processes such as paying for the title insurance for your home, paying any attorney fees to any lawyers that helped you with the legal agreements, or paying for any appraisals or tax fees. These fees can cost thousands of dollars, so it is important to be prepared for these costs.

Agent Commissions

Another reason why you should save up extra money when you’re buying or selling a home is that you might have some commission costs if you are working with a real estate agent in your deal. Real estate agents always charge commission costs for their services. Commissions usually cost around 5-6% of your entire home selling price. This ends up being tens of thousands of dollars that you’ll need to pay to your real estate agent. If you’re trying to avoid paying commission, there are other ways. Selling a home directly to a buyer means you don’t need to pay commissions to an agent. Many investors or cash home buyers will purchase homes in this manner.

Inspection Costs

You should also save extra money as you’re preparing to buy a home to help you to cover any inspection costs. Most traditional buyers will require that you have inspections performed upon your house to make sure that it is structurally sound. These inspections will often lead to some minor repairs and renovations that need to be performed, which can cost a few thousand dollars depending on what repairs you need to do. Make sure that you save money so you can move forward with your deal after the inspections phase.

So, if you’re preparing to buy or sell your home, remember that you need to have some extra money saved up for unexpected costs. You’ll need to pay for closing costs, real estate agent commissions, and inspection costs. Having sufficient money saved will help your buying or selling process to be stress-free.

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