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  • Writer's pictureGrimm Realty Group

The Hidden Costs of Home Buying

Updated: Oct 23, 2022

So, you’ve found the perfect home to buy & are ready to pay the down payment. Are you prepared for some of the hidden/unexpected costs of purchasing a new home? From Homeowners Insurance to purchasing new appliances, here are The Hidden Costs of Home Buying so you can plan financially.

The Hidden Costs of Home Buying - Financial Planning

Taxes, Closing Costs, & Insurance

1. Closing Costs

This includes Application fees & insurance premiums, roughly 2%-5% of the purchase price. Usually paid at closing when you transfer the title of the home.

2. Property Taxes

Ongoing cost of owning the home (likely to rise over time), calculated based on the assessed value of the home & the local tax rate. Usually included in the monthly mortgage bill.

3. Homeowners Insurance

Covers losses & damages to the home, items within the home, & liability against accidents. Usually included in the monthly mortgage bill.

4. Mortgage Insurance

Many lenders require this to offset the risk if you are unable to pay a 20% down payment. Usually paid at closing when you transfer the title of the home.

Your Home Exterior

1. Driveway

Driveways & Sidewalks have a variety of different materials that require different maintenance & costs. From filling potholes to seal coating asphalt, homeowners should be aware of these hidden costs.

2. Lawn

Homeowners who don’t hire lawncare companies will need to purchase the equipment themselves. The equipment also will require maintenance costs over time.

3. Leaf/Snow Removal

This cost will vary by location depending on the equipment needed. If you decide to hire someone, the cost will vary by the size of your property.

4. Trash

Depending on where you live, these services may be paid to the town, included in your property tax, or you’ll need to hire a private company.

5. Curb Appeal

Whether your property has fencing or annual flowers in the landscaping, costs will include the initial installment & also ongoing maintenance to keep the property looking great.

6. Outdoor Features (Deck, Patio, Pool)

Even if they are in great shape, decks & patios will need to be maintained to protect them from the elements. If your property includes a pool, the yearly costs of opening, closing, & keeping it clean are all costs to keep in mind.

7. Home’s Exterior

Siding fades, bricks crumble, & roofs get damaged. Repainting every 5-10 years, power washing the exterior, & making necessary repairs to features are important costs for homeowners.

8. Pest Control

Depending on where you live & the condition of the house, you may want to consider yearly preventative pest control to keep the home pest-free.

9. Tree Care

Trees grow faster than you may think & preventative tasks can help to reduce future issues with the property. Pest treatments & regular pruning will keep your property in tip-top shape.

Your Home Interior

1. Appliances

If you’re lucky, the previous owners will leave appliances, or you can bring your own from your previous home. Either way, appliances won’t last forever so you will need to plan for replacing them.

2. Flooring

Maybe you prefer hardwood over carpet or vice versa, maybe the flooring has been worn out over an extended period. At the very least, you will probably want to invest in area rugs & floor mats for your home.

3. Furniture

If you’re moving to a larger home, there may be additional rooms to furnish. Moving to a new home is also a great opportunity to update those outdated or worn-out pieces.

4. Window Coverings & Lighting

Whether you need to add blinds to the living room windows or want to add some reading lamps throughout the house, managing the lighting is a big step for settling into your new home. Sometimes, windows themselves will need to be replaced.

5. Utilities

Moving from an apartment to a new home can be quite a shock when you see your first monthly bills for utilities & trash. Apartments are mostly electric so moving to a home that has propane or natural gas will bring additional utility costs to keep in mind.

6. Security System

Homeowners will want to protect their new home & all the items inside, so security systems are something to consider. If you’ve used a system before, you may have higher costs to cover the additional size of your new home.

7. Home Tools

Basic tools to help with home improvement projects (even hanging those family photos) are a cost that you may not think about in the home buying process.

8. Emergency Costs

Things break, from the HVAC systems to the plumbing, these costs can come out of nowhere so you will want to make sure you have an emergency fund set aside to fix them.

Research & Plan

The Hidden Costs of Home Buying can be easily managed if you are aware of them & plan financially. Major repairs to the important features of the home can be a substantial cost to the unexpected homeowner, we always recommend an inspection before purchasing. Other hidden costs such as lighting fixtures, home repair tools, & higher utility bills need to be considered when budgeting for a new home. Ask your Real Estate Agent to assist you in researching all those hidden or unexpected costs so you can comfortably enjoy your new home!


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Hidden Closing Cost Sources:

Zillow.com: Hidden Costs of First Time Homebuying

Citizens Bank: The Hidden Unexpected Costs of Buying a Home

 

We are happy to answer your questions, you can contact us at any time! Interested in buying a home? Check out properties listed by Grimm Realty Group here!

 

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Grimm Realty Group Legal Disclaimer

The content on this page provides general consumer information. It is not legal advice or regulatory guidance. Grimm Realty Group may update this information periodically.

Grimm Realty Group may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. All statistics & information are subject to change with market conditions.

Grimm Realty Group is a MN-licensed real estate Broker and does not represent you as your agent unless a representation agreement is mutually signed.


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