To avoid any unwanted financial surprises, here are the four costs you shouldn’t forget to factor in your budget when purchasing a home:
1. Home inspection costs. Once you make an offer on a property, you usually need to pay a professional home inspector a few hundred dollars to inspect the home. If they find any potential problems (structural issues or asbestos, for example), you may have to pay another specialist to offer their professional assessment. Typical home inspections cost anywhere from $400 to $800, depending on the type of test. They may even cost upwards of $1,000 if you need to test for mold or asbestos.
2. Cash needed at the closing table. Besides closing costs, you may need to bring extra cash to the table while purchasing your property. Lenders, for example, require you to pay a year’s worth of taxes and mortgage payments up front. If the seller’s prepaid taxes or HOA fees are due, you’ll have to pay those as well. Usually, your lender and agent can go over these fees with you when you begin writing your offer.
Experienced Realtors say you should expect something to break or need to be replaced within the first year.
3. Moving costs. Once you've officially closed, you need to pay for the move itself. How much this costs varies considerably depending on where you live, how far you’re moving, how much stuff needs to be hauled, etc. In general, you should expect to pay a couple thousand dollars for a professional moving company.
4. Immediate costs. While you may be able to put off renovations or furniture purchases, there are some costs you’ll have to cover right away. For example, you’ll want to hire a locksmith to change the locks right away and you’ll need to establish fees for utility services. Additionally, being a new homeowner means you’re on the hook for routine and unplanned maintenance. Experienced Realtors say you should expect something to break or need to be replaced within the first year, so set up an emergency account and a savings plan to cover these costs when they happen. A home inspection will give you a good idea of which repairs to expect. Getting a home warranty might be a good idea in this case because you won’t have to use your credit card to take care of any issues.
If you have questions about this or any real estate topic, don’t hesitate to call or email me. I’d love to help you, and I look forward to hearing from you.