Down Payment
This is usually the biggest check you'll write. How much you need depends on your loan: some conventional loans allow as little as 3% down, FHA loans 3.5%, and VA and USDA loans can allow 0% down for buyers who qualify. South Dakota Housing also offers programs for first-time buyers. Talk to a lender early so you know your number.
Earnest Money
When your offer is accepted, you put down earnest money to show you're serious. It isn't an extra cost: it goes toward your down payment or closing costs at closing. The amount is negotiated in your offer.
Home Inspection
An inspection tells you what you're really buying, from the roof to the furnace. You pay the inspector directly, usually before closing. Radon, well, septic, or sewer scope tests can be added depending on the home.
Appraisal
If you're getting a loan, your lender will order an appraisal to confirm the home's value. It's usually paid by the buyer, sometimes up front.
Lender and Closing Costs
Expect loan origination and lender fees, the lender's title insurance policy, a closing fee from the title company, and recording fees. Your lender will give you a Loan Estimate that lists these, so you can compare lenders. Sometimes buyers ask the seller to help with closing costs as part of the offer.
Prepaid Taxes and Insurance
At closing you'll usually prepay homeowners insurance and put money into an escrow account for future property taxes and insurance. In South Dakota, property taxes are paid in arrears, so the seller typically credits you for the time they owned the home.
Your Agent
Since 2024, you'll sign a written agreement with your buyer's agent before touring homes. It spells out what your agent will do and how they're paid, and the terms are negotiable. Sometimes the seller agrees to cover some or all of it. I'll walk you through your options before you sign anything.
What You Won't Pay
South Dakota's real estate transfer fee is paid by the seller, not the buyer, and South Dakota has no state income tax.
Ready to see what you can afford? Book a call and I'll connect you with a trusted local lender and help you plan your budget.
This is general information, not legal, tax, or lending advice. Your lender and title company can give you exact figures.
Common Questions
How much do I need for a down payment in South Dakota?
It depends on your loan. Some conventional loans allow as little as 3% down, FHA loans 3.5%, and VA and USDA loans can allow 0% down for buyers who qualify. Your lender will tell you what fits you.
Do buyers pay the South Dakota transfer fee?
No. South Dakota's transfer fee of 50 cents per $500 of value is paid by the seller.
How is a buyer's agent paid?
Since 2024, buyers sign a written agreement with their agent before touring homes, and it spells out how the agent is paid. Compensation is always negotiable, and sometimes the seller agrees to cover some or all of it.
Written by Lacie Packard, REALTOR®, White Spruce Real Estate, Keller Williams Realty Sioux Falls. Updated October 2026.