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Many first-time home buyers save up their down payment, find the right home for the right price, ensure they can make their monthly payments, and then get terribly let down to discover there are extra costs they weren't aware of, hidden costs of buying a house that make it much harder or maybe even impossible to move in. If you don't have the money but someone else does, they may move in in your place. Or you may struggle to make ends meet with your new, surprise expenses.
Prepare Yourself for the Hidden Costs of Buying a House
There are many additional costs of buying a house that, while not deliberately hidden, aren't obvious so many first-time home buyers are surprised by them and others may even make mistakes calculating them.
Many homeowners choose to have inspections completed on the home before purchase, and some inspections may be required.
Closing costs are additional fees and expenses that come from mortgage insurance, title searches, attorney fees, and more. They are usually 2% to 5% of the price of the home, so that's an additional several thousand dollar expense for even an inexpensive home.
You might be able to negotiate to lower some of these costs or have the seller pay some of them.
You may never have had homeowners' insurance before. Or if you're upgrading, your insurance rate will probably increase. You may also have to purchase flood insurance.
Costs of moving
Moving requires many extra expenses that you may not anticipate until their need arises. You will have to pay to turn on all services at the new home and pay to either have furniture, decorations, and belongings moved or buy new. Most homeowners also feel the need to pressure wash the outside of the home, clean carpets, make repairs, etc.
Change in prices in new neighborhood
This category is similar to cost of living, but it is much more personal to the home and your lifestyle. The new home may be situated in a place with higher gas prices or you may have a longer commute. Public transportation, groceries, and services may be more expensive because of the city or neighborhood.
Condos and townhouses require additional fees to cover the maintenance and other benefits you receive while living in these residences.
When you buy a home, you don't just plan to pay monthly for the mortgage, you are also committing yourself to a certain amount of maintenance. An old home, a large home, and a large yard will likely cost more to maintain than newer, smaller homes with smaller, simpler yards. Any home will require maintenance and repairs that you'll have to pay for. Do you have the ability or time to do the work yourself, and can you afford to pay for what you can't do yourself?
Navigating the Hidden Costs of Buying a House
If you are a first-time home buyer, ask your trusted real estate agent about the hidden costs of buying a house. They will know all about hidden costs and how they apply to the area the home is located in such as how much everything costs in the given city and neighborhood and what local laws require sellers or buyers to pay.
Written by Missy Banks of AgentBecky.com and Allen Tate Realtors. Missy is a full time real estate professional and a top relator with Allen Tate and the Charlotte area. AgentBecky.com is a user friendly real estate search tool with update MLS listings.
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