Buying your first home is exciting. It’s also stressful. And if you’re a first-time home buyer, it’s important to recognize that there are more costs associated with buying a house than simply making a down payment and paying your monthly mortgage.
We’ve gathered up 6 unexpected costs that all-too-often catch first-time buyers off guard. Let’s take a look at them in more detail:
Home Inspection
So, after scrolling Zillow for hours (or days) at a time, walking through a dozen open houses, and sending countless emails & texts back and forth with your realtor, you finally found your dream home. You submit your offer and the seller has accepted. Now what?
The first thing you’re going to want to do is hire a certified home inspector to examine the house and property inside and out and uncover any damage to the home. If you can find issues during the home inspection, you can negotiate fixing them with the seller before closing the deal. Otherwise, you’ll be on your own for any and all repair costs.
Depending on where you live, a standard home inspection will run between $300 and $600 - a fee that is nonrefundable even if the deal falls through. Fortunately, Inspectify simplifies the home inspection process by giving you & your realtor the power to request an inspection, get multiple quotes, and book instantly online. That means one less thing for you to stress over during your home buying experience.
Appraisal Fee
Before a mortgage lender agrees to loan you hundreds of thousands of dollars, they’re going to want to make sure the home you’re buying is worth every penny. That’s why a home appraisal is a necessary step before finalizing a loan agreement. An appraiser will inspect your future home, documenting different features that add value, such as a pool or a third car garage. They will also compile a short list of comparable homes sold in the surrounding area at a similar price, to ensure the home you’re buying is priced appropriately.
Appraisal fees are another cost that is charged to you up front, this time by your lender. Like home inspection fees, it varies by location; but expect to pay somewhere between $300 and $600.
Closing Costs
If you’ve done any research about home buying before deciding to purchase, you’re probably familiar with the term “closing costs”. What might be a little hazier, however, is what that term actually refers to. Closing costs include a whole host of fees that are paid at the end of a real estate transaction by both the buyer and the seller (depending on the terms of your purchase agreement).
Here are some costs usually included at closing:
- Lender fees
- Attorney fees
- Escrow fees
- Title cost
- Notary fees
This isn’t a comprehensive list, so be sure to ask your realtor what all will be included in the closing costs of your transaction. Or, if you want a better idea of what you can expect to pay at closing right away, try plugging some numbers into a closing cost calculator, like this one.
Repairs & Renovations
Unless you’re building a custom home, it’s likely you’ll have some things you want to change when you move into your new house. Whether it’s a fresh coat of paint, updated light fixtures, or brand new flooring, these renovations cost money.
It’s a good idea to take note of these things as you walk-through the house prior to closing. That way you can work on getting estimates from contractors for the work you want done and prioritize based on your overall budget. If you book your home inspection from Inspectify, we will actually provide repair estimates on every issue found and even help you find a contractor to complete the work!
Depending on the results of your home inspection, you might also need to take into account costs of repairs that need to be done upon moving in. These can cost anywhere from $50 to thousands of dollars and can include anything from a leaky faucet to termite damage. Remember that repair costs for any damage found in the inspection can be negotiated with the seller, so you don’t have to foot the entire bill yourself.
Utilities
Whether you’re moving into your first house from an apartment or a rental home, chances are you’re familiar with utilities bills. These include electricity, water, gas, and internet, among other things. Most, if not all, of these services will require installation costs or deposits to set up. Make sure you’re aware of these costs ahead of time and include them in your budget.
It’s important to note that if your new home is bigger than your previous living arrangement, you should anticipate paying more in utilities each month. Likewise, if you’re moving to a new state (or even a new city), do some research on what you can expect to pay monthly for each of your services as they can vary greatly depending on location.
Moving Costs
Even if you plan on buying brand new furniture for your new house (which is another expense to keep in mind), moving things like clothes, kitchenware, and odds & ends is not free. Between moving boxes, van rentals, packing supplies, and time spent packing, it adds up quickly. Accounting for these expenses before you buy will ensure your stuff gets from old home to dream home without going over budget.
Buying your first home can be stressful. But it’s also exciting! Doing your research and knowing the numbers beforehand will make your home buying experience run smoother and quicker. And remember, don’t be afraid to ask questions! The more you ask, the better prepared you’ll be come closing day.
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