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How to Estimate the Cost of Buying a House

The purchase price is only the start of the expenses you'll need to manage when you buy a house. Before you buy, be sure to estimate the full cost of your dream home.


  • Step 1: Calculate your down payment Determine how much money you will put down on your new house. Most loans require a down payment of at least 5 percent of the total purchase price.
  • Step 2: Determine closing costs Determine the closing costs that you will be required to pay. Typically, these total 2 to 3 percent of the purchase price.
  • TIP: Closing costs can include assessment fees, insurance, taxes, prepaid loan interest, and other processing fees. Negotiate for the seller to cover some of the closing costs.
  • Step 3: Add the cost of a home inspection Figure at least $200 for a home inspection before you complete the purchase. Anticipate higher costs if you want services beyond a basic property inspection, such as radon or lead testing.
  • Step 4: Factor in legal expenses Factor between $300 and $1,000 for legal expenses to oversee contract details if you need assistance negotiating the terms of your loan. Legal fees will depend on how complex the issues are and how much time your lawyer spends on them.
  • Step 5: Add in moving expenses Add moving expenses, which will vary by distance, the amount of truck space you use, and gas. Include labor and packing costs if you are using a full-service moving company.
  • TIP: Moving expenses are often tax deductible, especially if you are moving for a new job in a new city.
  • Step 6: Find out about utility connection fees Find out if you will need to pay utility connection fees in your new home. Include the cost of having the water, electricity, gas, and phone service connected or transferred to your name.
  • Step 7: Add all of the costs for total price Add all of the various costs -- your down payment, closing costs, home inspection fees, legal fees, moving expenses, and utility connection fees -- to determine the total cost of purchasing your new home.
  • FACT: In 2009, 21 percent of new home buyers were single women, up from 14 percent in 1995.

You Will Need

  • Down payment
  • Closing costs
  • Home inspection
  • Lawyer
  • Movers
  • Utility connection fees
  • Negotiation techniques (optional)
  • Receipts (optional)

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