Cash needed BEFORE closing

Often times you often hear of the down payment to buy a house or the cash needed to close. However, there are expenses that require additional funds prior to closing and in addition to the funds needed to close. Here is a quick breakdown:


Earnest Money
While your earnest money is technically credited back to you at closing, you will often need to deposit certified funds into the escrow account of either the brokers involved or the closing attorney. While this is deducted from your cash to close, you will need these funds available prior to closing. Earnest money is typically $1,000 for every $100K being purchased. On all cash offers, this can be as much as 10% of the sales price. I'll be creating a blog strictly about earnest money as there are a TON of misconceptions about what it is and how it works.

Home Inspection
A home inspection is optional but recommended on any home you purchase even if it's new construction! The cost of the inspection is usually based on the sales price and size of the home. They can range from $250 to $500 on homes under $500K. With inspetions you definitely get what you pay for so don't skimp here, get someone that is every thorough with a detailed inspection report. It can only help you!!!

Termite Inspection
Termite inspections are also optional and also recommended on any home you buy even if it is 4-sided brick. They usually cost $45-$75. Termites are very common in the southeast so having an active infestation is not the end of the world. As long as the termites haven't penetrated the home into the studs, a treatment can run under $1,000 on a home under $500K.

Appraisal
This is a mandatory part of a purchase requiring a loan to purchase. The only exception are HUD homes in which your lender will use HUD's appraisal saving your some cash! In the past some lenders would include your appraisal in what they called an application fee or even rolled the cost into the closing costs; however with recent federal guideline changes, the appraisal is paid outside of closing by the buyer. An appraisal can range from $350-$450.

In-Town vs. The Suburbs

I have clients from out of state and current residents that are split down the middle about going ITP (inside the perimeter of I-285 for all non-Georgia dwellers) versus moving out to the suburbs due to the decrease in home prices making it possible to live in the city. Here is my hit (or miss) guide for deciding where you should move to:

If public schools are a concern you should move to the suburbs. Mainly Gwinnett (where I reside) and Cobb County. Private schools and Montessori's vary in either area. Even surrounding counties like Henry have some noteworthy school districts.

If you want to have great retail establishments it's a toss up. Gwinnett has a ton of newer retail along with three malls Discover Mills, Gwinnett Place, and the Mall of Georgia. In-town gives you Lenox Mall, North Dekalb Mall, and Atlantic Station which is sort of a mall with more of a feel of shopping in downtown Chicago or Washington D.C.

Sporting Events by far are more plentiful in the city. While Gwinnett has the Gwinnett Arena and the Gwinnett Braves stadium they cannot compare to the GA Dome, Phillips Arena and Turner Field. But if it's racing you crave then the suburbs will call you-offering Atlanta Motor Speedway in Clayton County and Road Atanta in Gwinnett County.

Commuting is definitely a win in-town because of the use of Marta and surface street traffic not as bad as any of the major interstates. But if you're self employed or you can tele-work then this wouldn't be as much of a factor.

Nightlife is BARELY a win for in-town only because more and more night clubs are finding their way outside of the perimeter for various reasons. But still if you like pubs, tapas spots, salsa dancing, and lounges.....it's the city hands-down.

Crime is a concern throughout the metro Atlanta area, but more so in the city because of the mix of housing. It is very likely to have a street of $500K+ homes on same block or a street over from abandon homes and drug houses. Old Fourth Ward is probably the best example I can think of off the top of my head. Violent crimes are higher in-town, but home invasions and undercover drug houses and brothels are very prevalent in the suburbs.

When it comes to cost of living-mainly gas prices, groceries, and property TAXES, the suburbs win again. The City of Decatur has the highest property taxes in the state followed by Fulton County and Dekalb County--all located (mostly) inside the perimeter.

Ultimately, you have to assess your personal needs and plans to decide which is best, but in today's current real estate market your wallet will not affect your decision as much!!!