Real Estate prices are constantly rising, not to mention the hidden costs involved. These hidden costs are not included in the purchase price and are usually disclosed during negotiation and closing.
Most people focus on the purchase price when looking for a house on sale. It is important to consider the purchase price, but you need to take into account other hidden costs that will increase the purchase price. Here are some hidden costs you will find in Rancho Palos Verdes real estate.
Earnest Money
Earnest money is a deposit paid to the seller of a house to show that you are interested in buying the home. It ranges between one and five percent of the purchase price, and it is paid to the seller’s agent and placed in an escrow account. If you cannot pay the remaining balance, you might lose the earnest money depending on the contract.
Property Taxes
Another hidden cost in Rancho Palos Verdes real estate is property taxes. You are required to pay taxes on the home, hence it is important to consider the amount you will be required to pay for the property. You should also ensure that the seller does not have any pending tax bills on the property before you close the deal.
Interest Rate
If you are using a loan to finance the house purchase, you should note the interest rate might be high or low depending on your credit score. If you have a low credit score, you will be required to pay a high down payment, and the interest rate will be higher. Before you purchase Rancho Palos Verdes real estate using a loan, ensure you have a near-perfect credit score.
Closing Costs
During closing, you must pay a certain percentage of the house’s purchase price to cover closing costs. The amount paid will cover loan application fees, appraisal fees, inspection fees, attorney fees, and title insurance, among others.
Maintenance and Repairs
After closing the deal, you will have to repair some damaged areas in the Rancho Palos Verdes real estate. If you buy a relatively new home, the maintenance and repair costs will not be that high. However, if you buy a fixer-upper, the maintenance and repair costs will be high.
Summary
If you are looking for a new home, do not be discouraged by the hidden costs discussed above. If you hire a good realtor, they will ensure you know all the hidden costs and give you adequate time to pay them. Most hidden costs are low; hence if you are well-prepared, they will not be an issue.
