How much does it cost to buy a home in Louisiana? or anywhere?
When someone asks, “How much does it cost?”, I reply with 2 things: down payment and purchase price.
Prices vary from city to city and town to town, so the following answer is more accurate for Louisiana, BUT will also be true for a lot of other areas. Just not all other areas.
Let’s start with down payment options.
There are ranges, but the lowest amount will be $2500.
Here’s what I mean.
The amount you actually need out-of-pocket on day 1 is the combination of your down payment and closing costs. You would usually pay the remaining balance through your monthly payment, unless you plan to pay cash and not have a mortgage.
Now let’s look at these 2 in more detail.
For example, down payments can range from $0 to 20% of the purchase price. Most first time home buyers will pay 0% to 5%. If the property is $200k, then you would have from a $0 to a $10k down payment maximum.
Who pays $0 and who pays $10K?
It depends on what’s available in your area. There are grants available that can pay part or all of your down payment. Some are available to everybody, while others are only available to certain careers or locations.
Let’s review your situation and I can explain options available for you.
The other expense for a buyer is — closing costs.
Closing costs are usually 5% of the purchase price. In some cases, the seller will be willing to pay your closing costs. Also, some of the grants can be used to cover these costs.
Currently (Jan 2023), a lot of sellers are willing to pay part or all of the closing costs, BUT this will not always be true. If the market gets hot again, this option won’t be as easy. So let’s get your plan started asap!
So what is the total upfront cost?
Basically, if the down payment is covered by a grant and the closing costs are either covered by a grant or paid by the seller, you would need the following: $1000 deposit, $500 appraisal, and $500 to $1000 for inspections. That’s the minimum of $2500 that I started this answer with.
Most of my clients put from $2500 - $10,000 out of pocket. It’s all based on what’s available to you and what your goals are. Email me to chat: jesbordelon@gmail.com
Now let’s wrap up by talking about property values.
In most parts of Louisiana, you can buy a decent home between $125k to $250k. This includes the more populated areas near Baton Rouge, New Orleans and Shreveport. The larger the home and the newer the home, the more expensive, obviously.
Most new construction homes will range from $200k to $400k for a decent sized single family home. Multifamily properties as well. It’s all based on square footage.
Some folks get discouraged by the prices they see online, but here’s what you need to remember.
The prices you see online are not what the person paid. That’s the price that the seller wanted. A lot of the time, that’s not the price they get. The worst example was a particular New Orleans neighborhood in 2021 that was asking 30% more than what they ended up getting.
For example, a house that was listed for $300,000 actually sold for $230,000! The sellers were clearly asking above market value.
I hope this information encourages all who read it.
There’s so much available to help you get your first home. Don’t let anxiety or doubt stop you. As your realtor, I promise to guide you comfortably to your goal of owning your own home or investment.