Author: CBS News
Want to be better prepared for your home purchase? Here are the hidden homebuying costs experts say to look out for:
Moving Costs
Moving expenses are a cost many homebuyers fail to plan for, according to experts.
“People prepare for the purchasing process but not for all the items that come after the signing table,” says Kristen Skebe, managing broker and real estate advisor at Engel & Volkers Atlanta. “This includes potential costs to set up utilities, moving trucks and movers, and storage unit expenses if needed. These items can be very expensive, especially when moving across state lines.”
Data from Thumbtack shows hiring movers for a local move — under 50 miles away — averages about $120 per hour. For long-distance moves, you can expect to pay more.
And while you may be able to save money by DIYing your move, it likely won’t come completely free of charge.
“You still will most likely spend hundreds of dollars between the gas of driving back and forth on top of buying boxes and other packing materials,” says Darren Tooley, senior loan officer at Cornerstone Financial Services.
Maintenance and Repairs
The costs of maintenance and repairs after move-in often surprise people, too, experts say.
“Once you close on a home, your expenses are just beginning,” Tooley says. “Typical maintenance costs can range from 1% to 4% of the value of the home but could be much more if you need to pay for larger items like replacing a roof or new windows.”
Older houses will usually have higher upkeep and repair costs, but new homes aren’t completely free from these expenses. You will still need to pay for regular HVAC tune-ups, gutter cleaning, pest control services, lawn care, and more.
Home Insurance
Homeowners insurance is another major expense buyers often fail to consider. Not only will you need to pay for this upfront, but it’s a part of your monthly payment, too.
“Depending on the location of the property, insurance can be very expensive,” says David Harris, a real estate agent with Coldwell Banker Warburg. “Properties within states and locations prone to severe weather or natural disasters will likely pay much higher insurance premiums.”
Home insurance requires annual renewal, so your premiums can rise over time, too. When this happens, it can impact your mortgage payment as well.
“Buyers need to be aware that while your mortgage — principal and interest — is a fixed monthly amount, your total mortgage payment that includes property taxes and insurance can vary every year,” says Gordy Marks, a real estate agent at RE/MAX NW. “If your home insurance or property taxes go up, your mortgage payment may increase.”
