So, you’ve scraped together a down payment and are ready to get mortgage approval – once the bank gives you the okay, you can start actively house shopping! But hidden costs jump out at you throughout the process, even after you’ve secured and moved into your new home.
If you’ve purchased a home before, these costs aren’t a secret, but the associated fees are not so obvious when you’re taking your first steps into the housing market.
Here are a few major costs to factor into your home budget.
Home Inspection
Home inspections are necessary and worth every dollar – professionals have a trained eye for deficiencies and can help guide your negotiations. Once you have an inspection report, you have a greater sense of the home repairs you need to do sooner rather than later.
Did the inspector point out rotting shingles on your roof but only slight damage on your patio? It makes sense to follow the inspector’s recommendation and reference their report when making repairs.
Home Repairs and Updates
As perfect as your home is to you when you buy, things are bound to go wrong. Lived-in homes need repair and cosmetic updates from time to time. Experts recommend having 1%-4% of the home’s value stashed away for home repairs.
Emergency repairs can be expensive, so it’s vital to have a cushion at hand to soften the financial blow. There’s nothing worse than having your furnace go out on a -40° day and having to put it on a credit card.
Home Appliances
If the previous owner of the home is taking their appliances with them when they leave, you need to factor replacement costs into your budget.
- Washer and dryer
- Oven and stove
- Dishwasher
- Refrigerator, and
- Microwaves
Appliances can be costly, especially if you’re going for high-end models for longevity. It’s a substantial up-front investment that will take up a significant portion of your budget.
Utilities
Going from renting or condo living to home ownership? For many renters, at least a portion of utilities are included, or they’re not in your name. If you’re in a condo, your condo fees take care of specific utilities.
Some utility costs to keep in mind are:
- Internet
- Electricity
- Water and sewer
- Natural gas
- Garbage pickup, and more.
If you’re moving into a more rural property, major utility companies may charge more or not offer services altogether.
Home Insurance
Homeowner insurance differs from renter insurance – instead of simply insuring your belongings, you must insure your property for any possible damage. Your premiums can vary depending on any environmental hazards that your home is risking. And with the changing climate, premiums are going up.
You might need additional coverage for wildfire protection, flood protection, and any other hazards the insurance company deems appropriate.
Bottom Line
Buying a home costs more than the home itself. Small fees, purchases, and costs spring up during the homebuying process.
For guidance and professional knowledge of all the potential costs, Sarasota Realty is here to help you understand the costs that come with buying a home for the first time. Contact us to begin your home buying journey and use our expertise to plan for your finances.
