When it comes to buying a home, there are a lot of costs to be aware of, some more obvious than others. It’s always important to look beyond the initial price tag in order to make the most informed and advantageous decision for you. There can be “hidden” costs associated with maintenance and other factors that can lead to you forking over much more money than you initially planned for. Thinking beyond your mortgage and insurance, the latter of which is expected to increase by an average of 15% over the next two years, these are the cost considerations buyers should always keep in mind.
Appraisal and Inspection Fees
Yes, there are costs associated with evaluating a property’s condition and value! Depending on the home—factors like size of the property, its condition, and its location can come into account here—and appraisal type, these fees can typically cost anywhere from $300 to $600. Note that appraisals are usually required when applying for a mortgage, while inspections can help identify issues that may need to be addressed after closing—and those could end up costing you even more in the long run.
Appliances + Other Home Systems
While an extra cost, a thorough inspection is crucial in covering things like your new home’s plumbing system and HVAC. It can also clue you into the age of appliances, their expected lifespan, etc. Note that replacing an HVAC system can cost around $10,000. A qualified HVAC contractor can help evaluate yours, and we’re glad to recommend trusted local pros!
Closing Costs
There are a host of closing costs to be aware of when purchasing a home. In addition to appraisal and inspection fees, these can include significant one-time fee payments including:
- Title search: A review of the property record to confirm there are no liens or encumbrances on the home’s title
- Title insurance: Protects the buyer against potential flaws with the title
- Recording fees: The fee associated with recording the deed at the courthouse
- Loan origination fees: A charge by lender for processing a loan application
- Real estate commissions: Commission paid to the buyer’s and seller’s agents
- Escrow: Advance funds for future homeowner’s insurance payments and property taxes
Home Improvements
After moving in, you may find there are additional improvements you want to make on the home. Setting money aside for these projects and potential repairs is a great way to budget and save yourself from sticker shock. You could also consider home improvement loans or a loan from your bank or lender. If you’re capable of home-improvement projects, that’s obviously a cheaper way to go, but sometimes it’s worth spending that extra dough to invest in a professional!
Get the Full Scope With a REALTOR® You Can Trust
As we’ve shown here, just because a house seems cheap upfront doesn’t mean it will be in the long run. My Hudson Residential Real Estate partner Ryan Boone dives into more of these extra costs to be aware of in his blog here. As an experienced REALTOR®, I can help you find a home that truly fits your budget—including any extra costs you may otherwise not be aware of. Reach out to me today at Annie@HudsonResidential.com or 919-961-3271 to work with a trusted professional in the market.