Here’s a topic that very, very few people mention when they make videos on buying or investing in Real Estate…these are the hidden costs associated with buying property, and exactly what they are. Enjoy! Add me on Snapchat/Instagram: GPStephan
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What’s the first cost you have to incur? INSPECTIONS. This is when you have the ability to inspect the property for any defects or needed repairs, and then decide if this is a deal you feel comfortable buying. Depending on the type of property and age of the home, a basic inspection can run you anywhere from $350 all the way up to $3000.
After you’ve done your inspection, you have to pay for your appraisal. Anytime you’re getting a loan from the bank, they will require an appraisal that proves the home is actually worth what you’re buying it for. Appraisals are usually done within a week after the seller accepts your offer, and usually runs anywhere from $400-$1000 for the most part depending how many units you’re buying, or if it’s just a single family home or condo.
While we’re on the topic of loans, the bank LOVES to charge you fees…lots of fees. Many banks will charge about half a percent to upwards of 1% of the loan amount as their origination fee. This means on a $500,000 loan, you could potentially pay $2500-$5000 as a mortgage fee.
Next, you have to make sure your insurance paid for by the time you close.
And by now, this brings us into our “Escrow” Fees…in some states you have “lawyers” who handle the transaction, in California we have escrow companies. In California, they typically charge $2 for every $1000 of purchase price, plus sometimes a base fee in addition to that. So on a $500k dollar home, you’re looking around $1000-$1500 plus whatever base fee they might have.
Then you have TITLE FEES. A title company ensures that the deed to the property can be delivered free and clear of all encumbrances and liens…basically, it means that you can take full ownership to the property without worrying that someone else is out there also claiming that they are the legal owner. I’d say this ranges anywhere from $500-$1200 depending on the type of property, title company, and what’s involved - again, there can be several factors that play into this.
And then…last but not least…you have miscellaneous fees that can add up. A $250 notary fee. A $65 overnight messenger fee. A $30 audit fee, etc…we can just chalk this up to an extra $500 in random, miscellaneous things.
TOTAL: $6000-$13,982
You’ll see now that we have a wide range of expenses…here in California, I’m assuming the typical $500,000 house. Obviously closing costs of nearly $14,000 IS EXTREMELY EXCESSIVE, but it really depends on so many factors and what type of companies you opt in for, whether it’s single family or multi family, whether it’s owner occupied or for investment, what insurance you get, and whether or not you can negotiate these rates with the companies. I’d always recommend shopping around and negotiating to get the lower rate EVERY SINGLE TIME YOU BUY SOMETHING.
For business inquiries or paid one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness @gmail.com
Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq
Favorite Credit Cards:
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American Express Platinum - https://goo.gl/C9n4e3

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25 thoughts on “The hidden cost of buying real estate”
  1. Avataaar/Circle Created with python_avatars Boseph says:

    thank you brudda

  2. Avataaar/Circle Created with python_avatars Mya Dalena says:

    Boobs (he said comment anything)

  3. Avataaar/Circle Created with python_avatars I am milan says:

    Excellent

  4. Avataaar/Circle Created with python_avatars Lukas Richter says:

    Fantastic video Graham. Thank you for the information.

  5. Avataaar/Circle Created with python_avatars Cika Fogarty says:

    Very informative and easy to follow thank you

  6. Avataaar/Circle Created with python_avatars Shawn Sapp says:

    What is a good real estate school in the la area.

  7. Avataaar/Circle Created with python_avatars Lorena Hernandez says:

    This is great, thanks.

  8. Avataaar/Circle Created with python_avatars Stephanie Oropeza says:

    What are review fees? ☺️

  9. Avataaar/Circle Created with python_avatars Nick Hernandez says:

    Absolutely Phenomenal! Really helpful as we do our research in purchasing a home!

  10. Avataaar/Circle Created with python_avatars Even Better says:

    Thank you

  11. Avataaar/Circle Created with python_avatars Wiz says:

    liked and saved for when I'm in the market for buying a home. Thank you for just being you

  12. Avataaar/Circle Created with python_avatars Genesis Campos says:

    awesome

  13. Avataaar/Circle Created with python_avatars charles gaskin says:

    Your awesome

  14. Avataaar/Circle Created with python_avatars Kirk Enad says:

    Thanks for knowledge.

  15. Avataaar/Circle Created with python_avatars Behemoth MIMP and Games says:

    Random comment to give Graham more attention.

  16. Avataaar/Circle Created with python_avatars Tatyana Vogt says:

    This is super helpful, thank you!!

  17. Avataaar/Circle Created with python_avatars Amanda Jones says:

    Great video!

  18. Avataaar/Circle Created with python_avatars Upper 90 says:

    Great stuff! Going through your old videos for real estate advice. You should do and update again.

  19. Avataaar/Circle Created with python_avatars Daydreamer says:

    U the best man!

  20. Avataaar/Circle Created with python_avatars Daniel Olarte says:

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  21. Avataaar/Circle Created with python_avatars regina edry says:

    Great advice. Thank you.

  22. Avataaar/Circle Created with python_avatars Jordan Santos says:

    Thanks helped a ton!

  23. Avataaar/Circle Created with python_avatars Krisenherd says:

    Why is nobody talking about the Audermars Piguet Royal Oak Offshore?

  24. Avataaar/Circle Created with python_avatars Oscar Sandoval says:

    Do I shop my loan offer around from bank to bank right after being pre-approved before searching for property or after I've found property?

  25. Avataaar/Circle Created with python_avatars Dread says:

    Great video! New buyer here.

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