Great news, you’ve just found the perfect home! The house is exactly what you wanted, the neighborhood is awesome and the price is right.
But the contracted price is just the start. Get ready for the additional and oftentimes unexpected home-buying costs that catch you off-guard and very quickly leave you underwater.
Unexpected Costs
For almost everyone, the spending doesn’t stop with the down payment. Closings costs such as appraisal, lender fees, and home owner’s insurance are typically planned for and are lumped into the original purchase price. But there can be more costs beyond that.
Many of your move-in costs are controlled by the previous owners. Should they decide to take the major appliances like the refrigerator and the washer/dryer you need to buy one to replace it.
These may seem like small purchases compared to buying a home, the cost for them do add up. Especially, if you used up all of your cash on the down payment.
Watch out for any immediate improvements that may need to be made, unless you can negotiate those repairs as part of the purchase agreement.
These costs will be the least hidden of any that you may run into.
It is incredibly important to hire a home inspector, which will add to your list of hidden costs, to make sure that everything is in good working order and structurally sound. Home inspectors will check for poor wiring, leaky and weak foundations, wood rot and plumbing problems. Things that you may not be able to recognize on your own.
These types of issues are not covered by home insurance. Should an inspector find a serious problem, then you will have to make the decision as to whether you still want to purchase the home. Whether you choose to proceed with the purchase or you choose to cancel your contract, you will still have to pay for the inspector.
Maintaining your Level of Comfort
Keeping you comfortable is another cost consideration you may not think about.
Are you used to Cable TV and Wi-Fi service? Is your new home wired for Cable and Wireless service? It is difficult to watch a technician crawl around putting holes in your brand-new walls.
If you are purchasing your very first house and moving away from apartment living you will probably be faced with higher utility bills. Many renters don’t even pay for all utilities as they are covered by the landlord. Items such as garbage and water bills.
Pre-Plan
A good way to be prepared for hidden costs is to do research and planning. Begin budgeting even before you start house hunting.
One method is to search for homes within your budget that may need some work done and calculate how much those improvements will cost. Again, research closely how much the repairs will be, it will be devasting to think it will cost a couple of hundred dollars to upgrade a kitchen, and then realizing it will actually cost thousands.
Older homes may seem like a much better deal than a newer home, but with older homes you may have more problems to fix and a higher insurance payment. Check on the cost of home owner’s insurance for the home. Insurance rates vary greatly from neighborhood to neighborhood.
Set a limit on the amount that you plan for a down payment. Make sure that you leave enough cash in your account to pay for improvements like changing the locks.
Roughly Calculate for as many costs that you can think of and carefully re-consider those homes that are at the upper limit of your budget.
Know your financial limits and plan ahead before signing on the line for your new house.
If you need help to sell your existing house fast, contact Stained Glass Homes, we can provide free, no-obligation offers to get you back on your feet. Call us at 520-200-3334 or click on the button below and send us your contact information.