Upfront Costs of Purchasing a Home in Gig Harbor

Buying a home is a major financial milestone—and while most buyers anticipate a down payment, there are several other upfront expenses you should plan for. In this post, I’ll walk you through the most common out-of-pocket costs you'll encounter before you get the keys to your new home in Gig Harbor. You'll also learn how these costs can vary by market conditions, loan type, and lender—and I’ll share some local insight so you can budget with confidence.

What Are Upfront Costs When Buying a Home?

Upfront costs are the expenses you pay before or at the time of closing. They’re different from ongoing monthly costs like your mortgage payment, property taxes, or HOA dues. These include your down payment, inspection fees, appraisal, and more—some of which are due within just a few days of your offer being accepted.

Common Upfront Costs to Expect

Let’s break down what you’ll likely need to budget for in Gig Harbor:

Down Payment

Your down payment will depend on the loan program you choose. Options range from 0% down with a VA loan, to 3.5% down with FHA, or 10–20% with a conventional loan. Regardless of loan type, the down payment must be “liquid” (like funds in your savings account). If your funds are tied up in stocks, retirement accounts, or are a gift, you’ll need to disclose that early so your financing paperwork stays solid—and so your earnest money is protected.

Earnest Money Deposit

This is your "good faith" money that tells the seller you're serious. It’s typically about 1% of the purchase price, though in a hot market (think Gig Harbor 2021), we’ve seen buyers offer up to 5% to stand out. It’s usually due within 3 days of mutual acceptance, and if everything checks out, this money gets applied to your down payment and closing costs.

Home Inspection Fees

Inspections are optional—but highly recommended. They give you a clear picture of what you’re buying. General inspections usually cost $350–$700 in our area depending on home size. Additional inspections (like sewer scopes or roof inspections) can run $300–$600. Pro tip: in fast-paced markets, some sellers provide pre-inspections. You can also opt for a verbal walk-through with an inspector if you’re on a tight budget but still want peace of mind.

Appraisal Fees

Your lender will require an appraisal to confirm the home’s value. This typically costs between $500–$750 and is paid upfront. The appraisal protects both you and your lender by ensuring the loan amount matches the property’s market value.

Closing Costs

Expect to pay about 2–3% of the purchase price in closing costs. These can include:

• Loan origination fees

• Title and escrow services

• Recording and underwriting fees

• Prorated HOA dues or taxes

• Prepaid interest

A good local lender will break this all down early so you’re not caught off guard. In some buyer-friendly markets, we can even negotiate to have the seller cover these costs.

Prepaid Property Taxes & Homeowners Insurance

These are upfront charges collected by your lender to set up your escrow account. You’ll typically prepay the first 6–12 months of homeowners insurance and a few months of property taxes. These costs vary based on your purchase price and location.

HOA Fees (If Applicable)

If you're buying into a neighborhood with a homeowners association, you may owe prorated dues at closing. You’ll also pay an upfront transfer or setup fee depending on the HOA’s policy. Always double-check the resale certificate for these details during your review period.

Moving & Utility Setup Costs (Optional but Real!)

While not part of the transaction, moving and setting up your new home can quickly add up. Think movers, storage, utility deposits, trash service, mail forwarding, and those inevitable Target runs. Budgeting a few hundred to a few thousand dollars here can help avoid surprise costs during an already busy time.

THE INCIDENTALS

These costs aren’t necessarily deal-breakers, but they do pop up quickly and require cash on hand:

• Earnest money: Paid fast—within 3 days of acceptance.

• Inspections: Scheduled early in the contract timeline.

• Appraisal: Ordered by your lender early and paid up front.

All of these are required before closing, so you’ll need to have this money ready well before the final signing.

SPECIAL CIRCUMSTANCES IN A SELLER’S MARKET

In multiple-offer situations, buyers may include an Appraisal Gap Guarantee, offering to cover the difference between the appraised value and the purchase price. If the appraisal comes in low, your lender only funds the appraised amount, so this extra cash would come out of your pocket.

For example, if you offer $430,000 but the home appraises at $410,000, you’d need to cover the $20,000 gap—on top of your standard closing costs and down payment.

RARE, BUT GOOD TO KNOW

Buyer’s Agent Fees

While sellers typically pay the buyer’s agent via the listing commission, that’s not always guaranteed. If you’ve signed a buyer’s agency agreement that outlines a fee structure, you may be responsible for a portion of your agent’s compensation—especially if the seller’s offering doesn’t fully cover it. Your agent should go over this with you in detail.

How Much Should You Budget in Gig Harbor?

On average, Gig Harbor buyers should plan for 3–5% of the purchase price in upfront costs, depending on their loan program and market conditions. If you’re putting 5% down on a $600,000 home, your upfront costs might land around $30,000–$40,000. Always talk to a local lender early to get a clear estimate tailored to your situation.

Final Thoughts & Next Steps

Understanding your upfront costs isn’t just smart—it’s empowering. When you know what to expect (and when), you can plan confidently, reduce stress, and avoid those “oh no” moments right before closing.

If you’d like a personalized breakdown of what buying a home in Gig Harbor might cost you—or want to get connected with a trusted local lender or inspector—I’m here to help. Let’s make your homebuying experience smooth, informed, and maybe even a little fun.

Book a call with Paige today and let’s talk through your next steps.