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    Columbia MO Home Buying – Don’t Be Surprised by Closing Costs

    Buying one of our local Columbia homes for sale will be the biggest–and probably most expensive decisions–you will make in your lifetime.  While your first home may not be your last, it will certainly present a steep learning curve and a crash course in the home buying process.

    If you’re a first-time home buyer, then the price you pay for the home isn’t the final price you’ll pay.  Closing costs can take many a new prospective home buyer by surprise; consequently, our real estate agents put together this handy guide about closing costs when budgeting for your new home purchase.

    Closing Costs at a Glance

    Closing costs generally make up anywhere from 2% to 5% of your home purchase price, and if you don’t have that kind of money in liquidity ready to be paid on your closing date, that could pose a problem.  Closing costs encompass all of the things that go into the home buying process.  Down payment, legal fees, lender fees, inspections, and title insurance are just a few of the things you may be responsible for paying upon closing for your home.

    In order not to get caught off guard, speak to a qualified lender who has experience working with all the parties involved in a housing transaction.  These professionals can give you an idea of how much you’ll need to have socked away for closing costs and help get you prepared for paying those costs.

    How to Save on Closing Costs

    Closing costs, generally speaking, are an unavoidable part of any real estate transaction, but lessening that burden at the closing table can be a big win for your pocketbook and give you more flexibility to put more money towards your down payment or into making home improvements.

    If you’re working with a lender, you may be at the mercy of their connections when it comes to third parties involved in the closing process; however, a good lender should let you have a voice in who you use for some of those services.  Shopping around for home inspections, pest inspections, mechanical inspections, and many other third-party services can save you a lot.  Additionally, try to work with a lender who doesn’t require an origination fee for your loan.

    Finally, you may be able to work with the seller on some concessions to pay for the required third party services or help you split some of the costs associated with your loan.  Work with your realtor and the seller to negotiate these concessions and see if you can save some bucks.

    Use a Title Company

    Title companies and their role in real estate transactions take up a big chunk of closing costs, but if you’re inexperienced in real estate, it’s probably best to stick with using a title company.  A title company’s job is to protect you, the lender, and the seller from getting into a property transaction where there may be some issues.

    If you choose to not use a title company and do the research on your own, understand that you may be taking a significant risk.

    Your Columbia Real Estate Professionals

    Contact us at Columbia Real Estate to get started on your home buying journey!

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