More Than Just Purchase Price: 10 Unexpected Expenses When Buying A Home

The down payment and monthly mortgage payments are the largest costs when buying a home, but there numerous other fees, costs, and payments as well. When buying a home, be sure to factor these additional expenses when determining how much you can spend on a new home. And good luck.

Home Inspection

Inspectors can save you from buying a home with serious, unseen flaws that turn into pricy headaches. They’ll search for things like structural issues, pest problems, radon gas, lead paint, asbestos, or other costly issues. However, home inspections don’t come cheap, and can cost around $300-$700. Even if you end up deciding not to buy the property, you still have to pay for this, and for each and every house you get serious about buying.

Closing Costs

In addition to the many thousands of dollars it costs to buy a home, you may have to also pay a variety of closing costs, which can include a lot of unexpected fees. Prices vary widely and are influenced by local laws, but they can add up to 3 percent of the purchase price. Some of these may be paid by the seller, but it’s wise to determine the costs before closing on a home.

• Government filing fees
• Real estate broker commissions/fees
• Loan application fees
• Appraisal fee
• Processing fees,
• Flood/hazard insurance premiums (paid in advance to qualify for mortgage)
• Mortgage insurance (if your downpayment is less than 20 percent)
• Cost of transferring title and deed, or title search fees and title insurance
• Escrows, impounds, and other piggyback payments.

Here’s a nice little site showing closing costs by state. Now take some deep breaths and think about a warm beach somewhere.

Paying More Than You Planned

There’s the listing price, there’s your offer, and then there’s the higher offer of some other buyer trying to outbid you. If you choose to top him/her, you’ll be paying even more than you planned or previously budgeted. Are you sure you can afford it? Is this home really worth it?

Unexpected Repairs

Home sellers often do a lot to hide their home’s faults, and even if you look over it closely there will likely be some creaks, leaks, or other surprise problems you’ll end up paying to correct. Be sure to budget for surprise repairs you might encounter.

Property Taxes

If you were previously renting, then your rent helped cover your landlord’s property taxes. However, as the owner of this new home you’ll be paying that cost all on your lonesome. Rates vary so check what it is in your city/county or other form of jurisdiction.

Home Owners Association Fees/Fines

If you live in a condo with dues, or a community with a homeowner’s association fee, then there are some additional expenses you can count on each month. Also, factor in any possible fines you might incur for overly exuberant holiday decorations, junk cars in the yard, political billboards, team flags, or other things you might place in your yard that  are against the rules.

Furniture

If you bought a larger home than your previous place, you’re going to have some space to fill. And even if it’s the same size you’ll probably give into the temptation to purchase some new furniture. Now that you own a home like a grownup you’d probably like to scrap that ragged couch you’ve had since college.

Moving Costs

Getting you and your stuff from your current home to your new home isn’t going to be cheap. Even if you can convince friends and family to help you do it, you’ll still have to pay to repair the dinged up trim work and holes in the drywall that amateur movers often cause. Before you lift that sofa, consider the average cost of hernia repair surgery is about $7,000, and that’s only one of dozens of possible moving day fiascos waiting to happen…

Appliances

If the home price doesn’t include the appliances, you may be out shopping for a new fridge, stove, or dishwasher. Be sure to ask what’s included and factor in the purchase price if they don’t. You can only afford to order takeout for so long and barbecuing a frozen pizza is tricky.

New Service Costs

Signing up for gas, electricity, cable TV, internet, and other services often come with a one-time sign-up or hook-up fee. They also include hours spent on hold attempting to activate service and troubleshoot why that new service isn’t working. It might increase the amount you drink and that’s yet another expense.