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Hawaii Ranks #1 for Hidden Home Buyer Fees
By Selected News Articles @ 4:00 PM :: 519 Views :: Cost of Living

The U.S. States with the Most Unexpected Hidden Home Buyer Fees

from FrontDoor.com

Nobody expects buying a home to be cheap. But there are many costs that unsuspecting buyers may not be aware of. The various additional fees, such as appraisals or Owner Title Insurance, can add up to five-figure sums.

Knowing about these costs in advance can help first-time buyers prepare for the bold and exciting step of bidding on a home. And it can help those already on the property ladder to consider their best next move. Figuring out potential fees is also a way to get into good habits ahead of dealing with other ongoing home ownership costs such as monthly utilities and essential maintenance — which experts estimate can cost around $1,180 on average.

Buyer fees include charges for things like home inspection and appraisals, which reassure you and your lenders that the home you’re buying does not have any hidden surprises of its own — such as structural issues. But they also include everything from taxes and insurance to lawyer fees and bank charges. These fees vary around the U.S. depending on local laws and customs and also in proportion to average property prices.

To help you find your way, we at Frontdoor calculated the additional fees that homebuyers must pay when purchasing the average-priced property in each U.S. state.

What We Did

We used Houzeo to get a cost estimate for the 20 common additional charges home buyers face in every state, sourcing average local prices from Zillow and down payments from Realtor. These charges include Origination Charges, Services the Borrower Did and Did Not Shop For (such as appraisal fees and survey fees), Taxes, Prepaids, Initial Escrow Payments and Owner Title Insurance. We ranked all states by the size of their fees as a percentage of the average local property price and also the hidden fees they pay a greater or lesser price premium for compared to the national average.

Key Findings

In Hawaii, homebuyers pay an average of $17,966.04, based on the median price of a house locally, this is the largest amount of unexpected fees.

However, as a percentage of the total property price, homebuyers in Hawaii pay the 9th cheapest cost, with unexpected fees accounting for only 2.16% of the total price.

At the opposite end of the scale, in West Virginia, homebuyers pay an average of $5,009.62, based on the median price of a house locally, this is the smallest amount of unexpected fees.

However, as a percentage of the total property price, homebuyers in West Virginia pay the 4th highest cost, with unexpected fees accounting for 3.25% of the total price.   

Colorado is the state with the cheapest home buyer fees, equal to an average of 1.95% of the average local property price.

Delaware is the state with the most expensive home buyer fees, equal to an average of 3.75% of the average local property price.

The States Where Homebuyers Spend the Most and Least on Unexpected Property Fees

First, we looked at the states with the highest average unexpected home buyer fees in dollars. Hawaii tops the list with almost 18,000 dollars ($17,966.04) of unexpected fees on average. This will come as no surprise to anyone living in Hawaii, as the state has the highest living costs of anywhere in the U.S.

There’s a drop of almost 3,000 dollars before we reach the second-highest state for hidden home buyer fees. Californian homes have an average of $14,693.55 in unexpected fees, which accounts for around 2% of the property price….

read … Full Report

 

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