Purchasing real estate often comes with unexpected costs that can catch buyers off guard. These surprise fees can add up quickly, turning what seemed like an affordable deal into an expensive money sink.
Knowing what to look for before signing can help you avoid these surprises and maintain financial health.
Administrative fees
One common fee to watch for is the administrative or processing fee. This fee refers to the cost of processing the transaction, and it is often charged by the real estate agency or brokerage. While it may seem minor, it can range from a few hundred to a few thousand dollars. It is worth asking if the other party will reduce or waive this fee before you agree to pay it.
Document preparation fees
Another fee to be aware of is the document preparation fee. This fee covers the cost of preparing necessary legal documents, such as the deed and title. Some sellers include this fee in the overall price, but it can come as a nasty surprise if the seller charges it separately. Be sure to verify if this fee is already included or if it will be an additional expense.
Title insurance fees
Title insurance protects against claims or liens against the property. While lenders usually require buyers to purchase lender’s title insurance, they may also charge buyers for owner’s title insurance. Reviewing the title insurance details can prevent paying for unnecessary coverage.
HOA fees
The homeowners association fee is another potential surprise. If the property is part of an HOA, buyers may have to pay a fee to transfer ownership within the association. This fee is often not disclosed until late in the transaction, so consider asking about it early.
Being aware of these fees ensures that you can spot them during a real estate transaction and ask the right questions of the other party. Strive for clear communication with all parties involved so you can have a smoother, more transparent transaction.
