Upfront Costs of Buying a Home

Upfront Costs of Buying a Home

Many buyers are confused as to just what their out of pocket expenses between the time they find the house they want to buy and go to settlement will be. This is an overview of some of the common costs and when you can expect to incur them.

Earnest Money Deposit (EMD): As a part of your offer to purchase you will have to write a check made payable to the settlement company you choose for earnest money. This is “good faith money” for the seller, and should you default on the contract after your contingencies expire the seller can make a claim for it. This check is held by your agent and not cashed by the title company until after you have ratified the contract. This money will come back to you at settlement towards your closing costs and down payment, and should you void the contract under any of the contractual contingencies it will be returned to you. The stronger your EMD, the more seriously sellers will take your offer. Amount varies depending on the cost of your home and what you are comfortable offering, but it is usually no less than $1,000. 3-5% is a strong EMD.

Appraisal: Most lenders will ask for a credit card to pay for the appraisal upfront after they receive your ratified contract and lock in your interest rate. Usually $350-$450

Home & Radon Inspection: The home and radon inspector you choose will require payment at time of service (after ratification). Usually $350-$650 (depending on home size and value) for the inspection and $150 if you choose to check for radon.

Termite Inspection: A termite inspector will go out and look for evidence of termite infestation or damage. Usually around $50, and most termite inspectors will agree to be paid at closing.

Remember that you can place most of these fees on the settlement statement as paid outside of closing (POC) and receive money from the seller to cover them!


The Withrow Group
Representing Buyers & Sellers in


To contact Steve: (301) 404-0410

To contact Josh: (410) 829-4477  

Long & Foster Real Estate, Inc
7700 Old Georgetown Rd
Bethesda, MD 20814