Beware of Hidden or Unexpected Costs

First Time Home Buyers Click Here.

Buying a home for the first time can be extremely scary and there is so much that you need to know. You don't want to find yourself drowning in unexpected costs, so here are some things that you should know about unexpected costs and closing costs. Closing costs can include much more than just an agents fee, so be sure to do your research and know all of the in's and out's of the area that you are moving to.

Inspections

It is absolutely crucial to get get an inspection before buying a home. You never know what could be an unexpected cost in this process. Mold, termites, foundational issues, anything can be there without you knowing so before you buy be sure to get an inspection. Inspections themselves can run well over $300, so consider that in your budget as well. 

Consider ALL Closing Costs

Obviously an agent fee is part of closing costs, but they can include much more. Note that insurance, special assessments and other miscellaneous costs add up, depending on what city you live in. Closing costs can add up to roughly 2-5% of the price of the home. 

Property Taxes

Property taxes vary from state to state so be sure that you research this when you start to look for a home and calculate what you can realistically afford. 

Repairs and Improvements

Be sure to factor in repairs and improvements after you have gotten a thorough inspection. There are cosmetic repairs and necessary repairs, and you will only really know what is necessary once you get an inspection. If you are no handyman, repairs can be highly expensive, so again, before closing, calculate all costs after inspection. 

Moving Costs

If you are moving, especially long distance or to another state, moving costs can cost you a lot of money. Consider all the things you might need to ship or rent trucks for. Consider all boxes, moving men, rentals, etc. Most people do not factor moving costs into their budget and find themselves in a credit hole alter on. 

Miscellaneous 

Appraisals, earnest money deposits, land surveys, etc. The home buying process from beginning to finish is expensive. If you do not foresee these costs, you can find yourself trying to dig your way out later on. Appraisals and land surveys can cost anywhere from 300-700 each, earnest money deposits are often required, and you cannot rely on your credit line to save you in this process. The last thing you want to do is be in financial ruin because you did not do your research. 

At the end of the day, this is an exciting process for you, but you have to go in hoping for the best, but expecting the worst financially. If your dream home is right in front of you, but there are plenty of pricey repairs to be done, be ready to fork over top dollar, or be willing to compromise. You know your budget, you know your comfortability, but be aware that you need to know all of the unexpected costs and hidden costs as well. Do your homework and good luck in this process!

First Time Home Buyers Click Here.

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