HOW MUCH DOES BUYING A HOUSE COST? A REAL-WORLD GUIDE 

If you’re trying to figure out what buying a house really costs, you’re asking the right question. Most people hear “down payment” and assume that’s the big hurdle, but in real life, the upfront cost is usually a mix of several line items that show up at different points in the process.

When we walk buyers through this (especially first-time and move-up buyers), we focus on one goal: no surprises at the closing table.

Below is the exact framework we use with clients every day in Minnesota & Western Wisconsin, plus realistic examples at $350,000 and $550,000.

THE 2 NUMBERS YOU SHOULD PLAN FOR

1. Cash needed up front (your “cash to close”)

A simple way to think about it:

Cash to close = down payment + closing costs + prepaids + inspections/appraisal

A solid planning range for closing costs alone is usually about 2% to 5% of the purchase price (not including your down payment). The exact number depends on your loan details, escrow setup, timing, and what’s negotiated.

2. Your monthly payment
Even if you have plenty saved, the monthly payment has to fit your life. For evergreen and compliance purposes, we don’t publish specific interest rates here. Your lender will quote your options based on your credit, loan type, and the day you lock, and we’ll help you understand what matters so you can make a confident decision.

THE 5 COST BUCKETS BUYERS SHOULD EXPECT

Here’s the structure we use with clients:

• Down payment (varies by loan type and your goals)
• Closing costs (lender fees + title/closing fees + recording fees + taxes)
• Prepaids (homeowners insurance, property taxes, escrow funding, prepaid interest)
• Home inspection(s) + appraisal
• A buffer (moving, immediate upgrades, small repairs, “first month” expenses)

That last one is the difference between feeling confident and feeling stretched.

MINNESOTA + WESTERN WISCONSIN COSTS THAT MATTER (AND CAN SURPRISE PEOPLE)

MINNESOTA
Minnesota has recording-related taxes that can be easy to miss unless someone calls them out early. Depending on the county and the specifics of your transaction, you may see items like deed tax and mortgage registry-related fees. We plan for them upfront and confirm how they’re handled in your contract and closing statement.

WESTERN WISCONSIN
In many Wisconsin transactions, you’ll also see a real estate transfer fee as part of the closing costs. Like anything else, the final numbers depend on your location and the details of the deal.

The important point: these costs aren’t “bad news,” they’re just costs you want to anticipate early so they don’t feel like a surprise later.

WHAT IT CAN LOOK LIKE IN REAL DOLLARS (TWO EXAMPLES)

These examples are meant to help you plan. They are not a quote. Your lender and closing company will provide the official figures.

EXAMPLE A: $350,000 PURCHASE (FIRST-TIME BUYER, CONVENTIONAL)
Let’s use a common first-time scenario: 5% down.

1. Down payment
   5% of $350,000 = $17,500

2. Estimated closing costs
   2% to 5% of $350,000 = $7,000 to $17,500

3. Inspections + appraisal
   Plan for multiple line items here. The total depends on the home and what inspections make sense (more on that below).

4. Prepaids and escrow setup
   This is the one that surprises people. Your closing costs are not the same as your prepaids. Prepaids can include the first year’s homeowners insurance premium, initial escrow deposits, prepaid interest, and sometimes a tax cushion, depending on timing and your lender’s requirements.

Big takeaway: Many buyers are prepared for the $17,500 down payment, but forget that closing costs and prepaids can add up quickly. This is exactly why we build a full cash-to-close plan before you’re under pressure.

EXAMPLE B: $550,000 PURCHASE (MOVE-UP BUYER, CONVENTIONAL)
Let’s use a common move-up scenario: 10% down.

1. Down payment
   10% of $550,000 = $55,000

2. Estimated closing costs
   2% to 5% of $550,000 = $11,000 to $27,500

3. Inspections + appraisal
   Still important at this price point. Higher price doesn’t automatically mean fewer issues, and it’s still worth protecting your investment.

4. Prepaids and escrow setup
   These can feel bigger simply because taxes and insurance may be higher.

Big takeaway: As purchase price rises, the percentage-based costs add up fast. Planning early keeps you in control and helps you decide what feels comfortable.

THE TOP 5 “SURPRISE COSTS” WE SEE MOST OFTEN

If I had to pick the five that catch buyers off guard most in Minnesota transactions, it’s these:

1. Prepaid items at closing
   Insurance, taxes, escrow setup, and prepaid interest can add thousands depending on timing.

2. Inspection add-ons
   A general home inspection is often just the start. Depending on the home, it can make sense to consider additional inspections.

3. Appraisal gaps (in certain pockets)
   Even when the overall market is calmer, some neighborhoods and specific homes still sell fast.

4. Title/closing items people don’t expect
   Title and settlement fees can be meaningful. This is one reason we like buyers to see a detailed estimate early, not just a vague “closing costs are a few thousand.”

5. Moving and immediate improvements
   Locks, paint, window coverings, small repairs, tools, and “we didn’t realize we needed this” purchases add up quickly.

HOW BUYERS CAN LOWER UPFRONT COSTS THROUGH NEGOTIATION (ESPECIALLY RIGHT NOW)

We’re seeing more situations where buyers have negotiating power compared to the peak frenzy years. That can show up as:

• Seller-paid closing costs (also called credits or concessions)
• Repair requests or repair credits after inspection
• Terms that reduce your risk while keeping your offer competitive

This is a big part of our job. We’re not just trying to “win the house.” We’re trying to make sure the home is a good decision financially, and that you don’t end up cash-strapped on move-in day.

DOWN PAYMENT ASSISTANCE: WHAT IT HELPS (AND WHAT IT DOESN’T)

Down payment assistance can be a game changer for first-time buyers, but here’s the honest version:

• It may reduce the amount you need for the down payment
• You still need a plan for closing costs, prepaids, inspections, and appraisal

So instead of “can I buy with no money,” the better question is:
“What is my realistic cash-to-close range with my program and budget?”

That’s where clarity replaces stress.

THREE REAL-WORLD CASE STUDIES (THE PATTERNS WE SEE ALL THE TIME)

CASE STUDY 1: “We saved the down payment, but closing costs surprised us.”
A first-time buyer had their down payment ready, but prepaids and closing costs pushed them past their comfort zone. Because we mapped everything out early, we could adjust strategy and negotiate where it made sense so they could close without draining their emergency fund.

CASE STUDY 2: “We can afford more, but we don’t want to feel house poor.”
A move-up buyer had flexibility, but wanted a payment they felt good about long term. We focused on the total cost picture (not just purchase price), compared scenarios clearly, and used inspection and negotiation strategy to avoid expensive surprises after closing.

CASE STUDY 3: “Down payment assistance helped, but we needed a real plan.”
A buyer assumed assistance meant everything would be covered. Once we laid out their full cash-to-close (including prepaids and inspections), they felt in control and could move forward confidently with a home that fit their budget.

OUR BUYER-READINESS CHECKLIST (WHAT WE RECOMMEND BEFORE YOU SHOP)

• Get a true pre-approval (not just a quick online pre-qual)
• Ask your lender for a detailed estimate early so you can see line items clearly
• Budget for inspections and appraisal before you fall in love with a house
• Keep a buffer so you’re not stressed after closing
• Go in with a negotiation plan, not just a price number

BOTTOM LINE: WHAT SHOULD YOU BUDGET?

A practical starting point for many buyers is:

Down payment + 2% to 5% of the purchase price + inspections/appraisal + a buffer

From there, we tighten the estimate based on your loan type (conventional or down payment assistance), your location, and the specific home.

WANT A PERSONALIZED “CASH TO CLOSE” ESTIMATE?

If you’re buying in Minnesota or Western Wisconsin, contact us and we’ll map out a realistic cash-to-close range for your situation (without publishing rates), show you what to plan for, and where we can negotiate to reduce your upfront costs.

Contact us by clicking here or email us at team@hhgus.com.

Educational info only. Costs vary by property, county, loan program, and lender.