Closing Costs for Buyers in Arizona
If you’re thinking about purchasing a home in the Phoenix, AZ area you may be wondering how much money you need saved up. There are lots to consider so let’s go through them.
Let’s first think about down payments. You can put as much money down as you’d like but in terms of minimums it depends. FHA loans usually require 3.5% of the purchase price. If you buy a home for $100,000 you’d need to put down $3,500. Conventional loans are 5% so that would be $5,000.
However, there are many programs where you can get down payment assistance or get zero down payment. One of which is the USDA mortgage loan which some areas offer and some don’t. The down payment could possibly be the biggest chunk of change you’d need to have saved up. But wait, there’s more to find out on how much does it cost to buy a home in Arizona…
Next let’s talk about closing costs. In Arizona, you can usually count on your closing costs being 3% of the purchase price. If you bought a home for $100,000 you would pay around $3,000 for these costs. However, if you don’t have cash on hand when you make an offer you can ask the seller to cover your closing costs. It’s pretty common. However, you may want to raise your offer price to make up the difference so the seller doesn’t see your offer as a weak one.
When you get an accepted offer you will put down earnest money. This proves your seriousness about your decision to buy the house. If you were to back out of the contract by breaking the terms within you will lose this money. This usually averages 1% of the purchase price but there is no set figure. So if you bought a home for $100,000 you would deposit $1,000 into an escrow account with the title company once the offer is accepted.
Related: Search Homes for Sale in Arizona, Making the Move from Renter to Buyer, What to Consider When Making an Offer
One thing you don’t want to ignore when wondering how much does it cost to buy a home in Arizona, is the home inspection. You have 10 days after the accepted offer to do your due diligence and have the home inspected. The amount of this depends on the size of the home but you can probably count on paying anywhere from $350-$500. This will tell you everything there is to know about the condition of the house.
Next up is the appraisal. If you are financing your new home your mortgage lender is going to want an appraisal performed. They won’t lend more than the home’s appraised value. In the contract offer you can choose to pay this yourself or ask the seller to pay. The appraisal can usually cost around $300-$400.
When figuring what does it cost to buy a home in Arizona you’ll want to consider all of these things. On the high end it could cost about $10,000 out of pocket to get the house. However, on the low end, it could only cost you under $1500 if you asked the seller to pay the appraisal and your closing costs and got a zero down payment loan. You would only be paying the earnest deposit and inspection.
It’s all how you negotiate the offer. I happen to be a pro at negotiations so if you’re looking to buy your next home in the Phoenix area, please contact me and we can get started. I specialize in Maricopa, AZ but also work in the Phoenix valley area.
To Buy or Sell a Home Contact:
Jason Bechtold, Realtor
The Maricopa Real Estate Company