What earnest money, inspections, and closing costs really cost

First-time buyers get tripped up less by the purchase price and more by the extra lines they did not plan for. This page is the cost talk I have in consultations.

These are typical ranges, not a quote. Your numbers depend on the house, the loan, and the contract.

Earnest money, due at contract

Earnest money is the deposit you make when your offer is accepted. I usually talk about about 1% to 5% of the purchase price, due at contract.

It tells the seller you intend to close. It is held according to the contract, and if you make it to closing it is credited toward your cash to close. It is not a mysterious extra fee that disappears.

You can lose it if you miss a deadline. The inspection period is the one I stress the most.

If we miss that deadline, you can lose your earnest money. We put the dates on a calendar the day we go under contract, and we book inspectors quickly on purpose.

Inspections, during the inspection period

A whole-home inspection typically runs $400 to $500. That report is your punch list and your reality check. Beyond that, I often talk through these extras:

• Radon: about $130
• Termite: about $100
• Sewer scope: about $200
• Structural: about $300, if the first report or the house itself says we need it

You do not automatically order every test on every house. An older home with original plumbing is a stronger candidate for a sewer scope. A house in an area where radon is common is a stronger candidate for a radon test.

I will tell you what I would order if I were buying it.

Inspections are not about finding a perfect house. They are about knowing what you are taking on, and about having a window to negotiate repairs, ask for a credit, or walk away the way the contract allows.

Appraisal, after you are under contract

If you are getting a loan, the lender will require an appraisal. Plan for about $500 to $700.

The appraiser is working for the lender, not for you or for me. If the house comes in low, we have a conversation about price, extra cash, or whether the deal still works. I would rather have that conversation with facts than pretend every house will appraise at the offer price.

Closing costs, at closing

Buyer closing costs in the range I use are about $7,000 to $12,000. That bucket can include lender fees, title charges, prepaid taxes and insurance, and other line items on your closing disclosure.

It moves with the loan and with credits we negotiate. A seller credit or a lender credit can lower what you bring. None of that should show up as a surprise on closing day if we have been watching the numbers.

Down payment, also at closing

Your down payment is separate from closing costs. Plan for 0% to 20% depending on the loan. Earnest money is usually part of that picture, not on top of it, because it is credited at closing.

For a fuller cash overview, see how much you need to buy your first home. For loan type tradeoffs, see FHA vs conventional.

A quick example, without pretending it is your file: on a $250,000 house, earnest money at 1% is $2,500 and at 5% it is $12,500. Inspections might run about $400 to $500, or closer to $1,000 if we add radon, termite, sewer, and structural.

The appraisal is about $500 to $700. Closing costs are still the bigger wildcard at about $7,000 to $12,000.

I use $250,000 here only because it matches the price cap many first-time buyers give me. Your house will be a different number.

I will keep repeating this because it matters: schedule the inspection period on time. The rest of these costs are planning. Missing a deadline is how people lose money they did not need to lose.