In this episode of The Real Estate Breakdown, real estate agent and Realtor, Pey Behin explains the top five hidden fees buyers will find when purchasing a home in Washington DC, Maryland and Virginia.

Here are some basic real estate advice for all buyers and especially the first-time home buyers. Time and time again during home-buyer appointments, I find that buyers are not aware of the “closing costs.” So time to address what they are in a video. Please like and share if you find this useful! Thank you all for your continued support – Pey.

“Don’t start shooting yet. It’s so hot. Justin! Majida! Turn the heat down. I’m glistening. Lord, it’s hot in here. Hey Google, turn the temperature down 10 degrees. Google? Siri? Alexa? Somebody? Sorry guys, if you can’t tell by my shiny forehead, it’s hotter than Iran in here. I’m about to start enriching uranium. Timely joke: done.

Today we are getting into the- Five.

… one, two, three, four, five.

One, two, three, four, five. Five. Five.

The Top 5 Hidden Costs of Closing on a Home. So what are you saying Pey? Closing costs aren’t part of my down payment? Nope. We’re going to get into that, after this.

Okay, so let’s do this. Today we’re talking about the closing costs, five things they consist of, and how they’re separate from your down payment. When you’re buying a house, you actually need dos payments. Numero uno, number one … That’s my Persian Tourette’s. Number one, the number one payment … There is two payments.

The number one payment you’re going to have is your down payment. Now, that can be anything. Most people think it’s 20%. It’s actually a minimum of 3%. You could put 3%, 10%, 20%. Under 20%, you’re going to pay mortgage insurance. We’ll talk about that in another video.

But what most people don’t tell you is that if you’re putting 3, 5, 10% down on a house, you actually need about another 3% in closing costs. Now, what is that? So look at it this way: if you put 3% down, it’s actually 6%. If you put 10% down, 13%. 20%, 23%.

“Yes, Pey. I know how to add three to numbers.”

So what does that actually cover? Number one is the home inspection. Now, we’re not really going to talk about that now, we already covered that over here.

The second thing your closing costs are going to cover is your appraisal. Now let’s say you’re getting the mortgage on the home, the lender wants to make sure that the house is worth the money he or she is lending you. The value of the home is then given by the appraiser. Now, we’re not really going to get into this too much. There’s another video on the appraisals right here.

“But Pey, the lender’s not going to take anymore money from me, right? My hard earned money. That’s it, the appraisal? The appraisal money actually goes to the appraiser, not the lender.”

The lender is taking point number three. So what are the lender fees? In this area, DC, Maryland, Virginia, lender fees are generally a fixed fee. In other states, it could be up to 1% of the loan balance. The lender will either have a banking fee, underwriting fee, processing fee, a flood certification fee, credit report fee. And then there’s Brian’s lunch money. He likes to eat at [Morden’s 00:02:38] every afternoon, so you’re paying for that.

Then after the lender, you have your title attorneys. The title fees are essential because they do something. Title fees are essential because … Hang on. I got it right here. No, no, no, no. Maybe God can help us. So stupid.

Title fees are essential because they include some things like title insurance. Title insurance is essential because let’s say if some 50 years ago, deed was disappeared, and divorced parties, long-lost daughter shows up out of nowhere after 50 years and tries to claim stake on the home. Well, it protects you on that, to show that the house was transferred properly.

Now, you can turn this fee down. I would not. It’s a 1000 bucks, give or take. Very little price to pay for that situation arising. Then there’s also the lawyer fees, title abstract. We’ll get into that in another video.

And last, and definitely least, you have the government. Uncle Sam. Your property taxes, usually set aside in some sort of escrow account. And then there’s the county taxes, the state taxes, recordation fees, county clerk fees. Everybody’s got their hands in your pie. And that’s a lot of taxes.

Duh. (singing) This is America. Don’t catch you slipping up.”


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