Out of Pocket Expenses for Buyers

Out of Pocket Expenses for Buyers

When purchasing a home, you know the sales price you have negotiated, but when you make it to the closing table your might be surprised at some of the other expenses involved in the process. Here is a detail explanation of all of the out of pocket expenses you might encounter when you buy a house.

Earnest Money Expense

The first out of pocket expense that you’ll have is the earnest money. The earnest money shows the seller that you are committed to the purchase & aren’t out submitting offers on other properties. You give the earnest money check to your Broker or Title Company and it’s kept in escrow until the purchase is finalized. This money will go towards your closing cost or down payment at closing. There are instances throughout the buying process, where this is refundable to the buyer should the deal fall through.

Inspection Fees

The next out of pocket expense are inspection fees. There are many types of inspections you may wish to have done on your home which might include:

  • Basic home inspection to determine the condition of the home. Usually runs $300-400, depending on the size & age of the home.
  • Radon Test. This determines if your home has unsafe levels of Radon gas. Usually about $175.
  • Sewer Line Scope. To see if there are any issues with the current sewer line. Usually about $125- 200.
  • Lead Based Paint Assessment. This determines if the home contains lead paint & applies to anything built prior to 1978. This usually runs about $300.
  • Meth Lab Test. This will check to see if there has ever been methamphetamine in the home. This starts around $600 & can go to about $1200.
  • Mold Test to see if your home contains dangerous mold. This usually runs about $300. There’s also Well & Septic testing if the home has them.

These fees are to be paid in full at the time of service.

Down Payment Expense

The next expense is your down payment. This is a percentage of the sales price of the home, which you pay at closing. VA loans do not require any down payment. There’s also first-time buyer programs that provide down payment assistance for buyers that qualify. The most common loan for first timers is FHA. This requires 3.5% down payment due at closing. Conventional loans start with a minimum of 5% down payment and go up from there.

Closing Costs

The last out of pocket expense is closing costs. These are fees paid at the closing of a Real Estate transaction. This pays for things like points, appraisal and title company fees, taxes, pre-paids and many other important items. Luckily, you will know what to expect ahead of time, because lenders will provide a cost analysis worksheet with estimated fees.

If you have any questions about out of pocket expenses, please give me a call!! I’d love to help anybody that’s beginning or curious about this process.

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2017 Real Estate Market at a Glance

2017 Real Estate Market at a Glance

Our housing market is off to a great start this year. Sales are abounding. Many properties are receiving multiple offers, and the days on market are shorter than ever. For more detailed local stats, check out our Market Reports. Mortgage interest rates are still low, hovering in the 4%-4.25% range.

I just saw an article from Realtor.com which says that Colorado Springs is in the top ten hottest housing markets in the nation. Wow! Below is a snapshot from that article, as well as recent stats for this year, at the end of February:

SINGLE FAMILY HOME SALES                          : on pace with last year right now

CONDO/TOWNHOME SALES                              :   Up 7.6% over last year

AVERAGE PRICE OF A HOME                             :   Up 12.3% over last year

AVERAGE PRICE OF A TOWNHOME                :   Up 11.9% over last year

INVENTORY OF HOMES ON MARKET             : Down 23.8% from last year

INVENTORY OF TOWNHOMES ON MARKET            :   Down 15.9% from last year

Source: “These Are the Hottest Real Estate Markets in February 2017,” realtor.com® (2017)

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Things to Do This Weekend (Mar 11-Mar 12) in Colorado Springs

Things to Do This Weekend (Mar 11-Mar 12) in Colorado Springs

Spoken Word Artist Shane Koyczan-  Sat Mar 11, 7:00 pm, Tri-Lakes Center for the Arts, 304 US-105, Palmer Lake, CO

Admission: $18/$20 in advance, $20/$22 day of show. With a style of poetry that speaks to people in their own voice, Shane Koyczan has gained international recognition for his work. To see his work check out his video "To This Day" on YouTube. For more info, visit: TriLakes Center for the Arts

Reptiles & Amphibians Up-Close & Personal, Sat Mar 11, 10:00 am - 12:00 pm, Fountain Creek Nature Center, 320 Peppergrass Lane, Fountain, CO

Admission:$2 member, $3 non-member. Come join the Zookeeping students of PPCC for an up close and personal look at Reptiles and Amphibians. For more information: Fountain Creek Nature Center.


TEDxPPLD Cheyenne Mountain, Sat Mar 11, 2:00pm - 3:00pm, PPLD - Cheyenne Mountain Library, 1785 South 8th Street, Suite 100, Colorado Springs, CO

Admission: Free, registration recommended. 3 of the most popular TedTalks will be selected for viewing and discussion. Some possible topics: Are schools killing creativity? What makes a great leader? How can I find happiness?. For more information: Cheyenne Mountain Library.


Orvis 101: Learn about Fly fishing, Sat Mar 11, 9-10am, 10-11am or 11-12pm, Angler's Covey Fly Shop, 295 S. 21st Street, Colorado Springs, CO

Admission: Free. Colorado has some of the best fly fishing around. If you have ever been curious, stop by for a 1 hr class which includes 20-30 minutes of casting practice. For more information check out their website Angler's Covey.


Imparables El Show, Sun Mar 12, 6:00pm - 8:00pm, Pikes Peak Center for the Performing Arts, 190 South Cascade Avenue

Admission: $60.75 – $132.75. This one will leave you laughing for a long time. Adrian Uribe and Omar Chaparro star in this adult (read 18+) comedy performed in Spanish. For more information: Pikes Peak Center

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Condos vs Townhouses - What's the difference?

There is a lot of confusion about the differences between condos vs townhouses. They share many similarities, and this seems to be the source of this confusion. Even amongst real estate professionals we often hear more opinions than facts. If you are considering buying a condo or a townhouse, it is important for you to understand the different real estate terms.

So, let's start by clarifying, condominiums or condos are a type of real estate ownership. Whereas, a townhouse is an actual style of building.

A condominium is best described as “the concept of ownership of a single unit of air space within a multi-unit dwelling, along with co- ownership of any common amenities (recreation centers, pools, etc...) and common areas of the structures and land among all unit owners.”

Townhouses are generally attached structures of 2 or more stories with common walls. These are a version of the old "Brownstones or "Row Houses" made popular on the east coast.

Let's Review the Similarities:

Townhouse ownership means you own the structure along with any associated land. So the owner of a townhouse can have absolute ownership, like a single family home.

Here's where things get a little confusing. It is not unusual to have “condominium ownership” of a townhouse. In other words, the structure is a "townhouse" while the ownership is "condominium".

Let's Compare the Differences:

Ownership and common areas are the primary differences between condos and townhouses. You can actually have absolute ownership of a townhouse as well as the land (yard) associated with it. In a Condominium you only own the "air-space" inside of your particular unit.

The owners of a condominium development each own an equal share of the "General Common Elements". This includes the structural elements of the building roof, walls, halls, clubhouse, pool, etc...

In a townhouse community, any common elements are deeded to the Home Owners Association (HOA). The townhouse owners are a part of the HOA but don't own an interest in these elements.

"Limited Common Elements" are where we see a departure between townhomes and condos. Limited Common Elements are only seen in condo ownership. These are things that are intended for the use on the individual unit owners. Parking spaces, garages, balconies and patios are examples of Limited Common Elements. Although these are owned by all of the unit owners, they are limited to the use of specific owner/s.

In a townhouse, the balcony and garage are actually owned by the townhouse owner. The exception to this would be if a "townhouse" style home is owned as a "condominium".


Both condos and townhouses are what is known as "Common Interest Communities". A "Common Interest Community" is one where common real estate is maintained through assessments and dues.

Because of the Common Interest Community designation, we see a lot of confusion. The easiest way to remember the differences is this: A condominium is a form of real estate ownership and a townhouse is an architectural style.

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Things to Do This Weekend (Mar 4-Mar 5) in Colorado Springs

Things to Do This Weekend (Mar 4-Mar 5) in Colorado Springs

Colorado Springs Youth Symphony's Winter Concert-  Sun Mar 5, 3:00 pm, First United Methodist Church 420 North Nevada Avenue

Admission: Free. These kids work hard all year, so it is well worth the effort to hear them play in their final concert. For more info, visit: Colorado Springs Youth Symphony

Star Days: Tinkering, Sat Mar 4, 10:00 am - 04:00 pm, Space Foundation Discovery Center 4425 Arrowswest Drive

Admission: Covered in Regular Museum Admission. Love to dig in and see how things work? Come to have some fun while tinkering and use both sides of your brain to creatively solve problems. For more information: Star Days.


Colorado College Student Art Show, Sat Mar 4, 6:00pm - 10:00pm, Colorado College - Edith Kinney Gaylord Cornerstone Arts Center, 825 N. Cascade Ave

Admission: Free. Over 100 pieces of student art are displayed with many of them for sale. Come enjoy free refreshments, a student band, dance, improv, and short film screenings. For more information: Facebook Event.


27th Annual Motorcycle Show & Swap Meet, Sat Mar 4, Sun Mar 5 10 am - 6pm, Mortgage Solutions Financial Expo Center, 3650 N Nevada Avenue

Admission: $10 general admission, 12 and under free. Come see the best swap meet and motorcycle show around. Literally, there is something for everyone with a tattoo competition, vendors, charity auction, food and beer garden and some good ole fashion people watching. For more information check out their website Motorcycle Show & Swap Meet.


Colorado Springs Philharmonic presents 007: The Music of James Bond, Fri Mar 3 and Sat Mar 4, 7:30pm, Pikes Peak Center for the Performing Arts, 190 South Cascade Avenue

Admission: $21 and up. Are you a fan of the James Bond flicks? Come live through all of them musically as the Colorado Springs Philharmonic gives you an exciting ride from Sean Connery to Daniel Craig. For more information: Colorado Springs Philharmonic

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