Home Buying • 3 min read
6 Hidden Costs When Buying a Home
Most buyers would like to believe that the only major expense they’ll have when purchasing a home is for the house itself. Unfortunately, this means that many first-time homebuyers often get hit with unexpected fees that they aren’t prepared to pay for. There are a lot of hidden costs when buying a home, and you need to keep them in mind to make sure you don’t end up in financial trouble. We’ve listed six of the most common to help you make sure you’re prepared.
There’s a lot that has to happen before closing a deal—for example, the home will need to be appraised to determine its actual market value. Buyers will generally be required to pay a fee to cover these expenses, which will usually be between two and five percent of the home’s overall cost. Many first-time homebuyers can be blindsided by this expense since they’ve likely focused more on saving up for a down payment. When preparing to buy a home, make sure you set aside some extra money so you aren’t surprised by major fees come closing.
It’s relatively common for buyers to need to set up an escrow account. This account holds funds—such as earnest money, which is a deposit you might be required to make before buying the home—until the transaction is complete. Making sure you have money saved for this is important if you don’t want to find yourself struggling when it’s finally time to buy.
Maintenance and Repairs
You want to believe that your home will be in good condition when you buy it, but unfortunately, that just isn’t always the case. Even if it is, there might be all sorts of small problems that you didn’t notice earlier. It’s a good idea to set some funds aside, just in case; that way, if you need repairs or want to do some renovations, you won’t be struggling financially.
Once you become a homeowner, you’ll have all sorts of utilities you’ll need to pay for. Electric, water, gas—these expenses can add up quickly. Before buying your home, you’ll want to do some research on what these utilities will cost and factor them into your long-term budget. This way, you can make sure that you don’t end up struggling down the line.
Home inspections are essential to the buying process. By getting one, you’re inviting a professional to look over a potential property and find anything that could be an issue—which can help save you from making a bad deal in the long run. These inspections, however, will still require a fee, and so you’ll want to make sure you’re prepared to pay for one.
You’ve found your perfect home, it’s in an amazing area, and you’ve accounted for everything else you can think of; surely there can’t be anything else to worry about, right? Unfortunately, this isn’t always the case. Property taxes can be another expense that homeowners may be hit with. In some areas, these taxes are relatively small; in others, however, they can be incredibly expensive. It’s important to do your research beforehand to make sure you aren’t getting in over your head.
Make Sure You Have Enough Money Saved
Buying a home is a huge investment and involves many hidden fees. Sometimes, it can feel overwhelming to keep track of them all—so get a real estate agent to help you. We’ll let you know what fees you might need to pay and help you make a solid plan of action. Call us today to learn more about what we can do.