Thank you for your interest in beautiful Coastal Delaware!
Most people are excited to find out how low taxes are in Delaware but you probably would like to know more about the costs associated with buying a home and the closing costs. Once you decide to write an offer and it is accepted by the seller of a home you like, your deposit will be held in an escrow account. Then you will make application with a lender and then you will decide on the necessary inspections and your Realtor will get them scheduled for you. In Delaware you can expect to pay between $350-$500 for the home inspection depending on the size of the home. If there is a well – a water test will cost about $140-$250 (re-tests $100-250.) If the property has a septic system- septic inspection costs on average $450-500. Radon is not frequently found in Delaware but a Radon Test is always a wise test just in case, expect $100-$150. In most cases you will usually have a termite inspection. Expect $100-200. Most home inspection companies in our area will bundle all of these tests together for convenience.
Transfer Tax is the largest portion your closing costs. The transfer tax in Delaware is 3% (1.5% to the state and 1.5% to the county) of the purchase price and it is customarily split between buyer and seller evenly at 1.5% each. However, if you are purchasing new construction, many builders will request that the buyer pay the full 3% transfer tax tieing this condition to an attractive incentive. Please be aware this can be negotiated! And, we can usually negotiate this down for you. Title Insurance is the next biggest portion of the closing costs. Title insurance protects you from any future claims of ownership.
Lender costs do vary depending on rates, but be careful agreeing to work with a builder's "preferred lender" in order to get an incentive without getting competitive bids. In the past we have seen some lenders buried origination fees into the HUD and there is no recourse for the buyer one they agree to accept the incentive. As part of the mortgage process your lender will order an appraisal ($400-$600) and survey ($400-$600.) The seller typically pays for the preparation of the HOA docs and DUCIOA/Community Docs.
In all, if you are taking a mortgage you can expect to pay 3-4% of the purchase price in closing costs for your new Delaware home. If you pay cash, you can expect to pay 2.5-3% of the purchase price.
Coastal Delaware is a wonderful place to live and enjoy life. If you'd like to receive more information about the area, please let me know your mailing address and I'll be happy to send it out to you.