So you're thinking of buying a property...well that's exciting!!! How does that impact your bottom line and what costs should you expect?
My first piece of advice is to get pre-approved by a reputable lender. By getting pre-approved, your lender has taken into account your income, reserves, credit score, debt ratio, etc. and you are ready to go shopping.
All in number?
Closing costs can be confusing and there are quite a few line items. As a rough and conservative rule-of-thumb, buyers should expect to pay approximately 1% of the purchase price for closing costs and inspection fees. This takes into account escrow fees, loan fees, prorated taxes (although taxes are one to watch out for and can greatly fluctuate based on when bills are due and if the property has been reassessed recently), and inspections.
If you're cash, you don't need to worry about loan fees or financing related costs, so your costs will be less. If the property is in need of more extensive inspections, like geological, surveys, etc. etc. that is also something to consider.
All in all, if you're purchasing a $500,000 condo, expect to spend about 5k in closing costs. If you're in the $1,000,000 range your closing costs should
be less than 10k unless there are extenuating circumstances.
Best practice? Build your team! Get a lender involved early so that you are shopping at a price point you feel comfortable in, and get a Realtor on your team that knows the ins-and-outs of the escrow process so there aren't any surprises!