After searching the market, you have found your new home….You have stashed away enough money for a down payment, but what about the other expenses involved in purchasing a new home…can your checkbook handle the added costs? Here are a few examples:
Home Inspection. I encourage all of my Buyers to get a professional home inspection. This is money well-spent. Costs can range from $300 to $500 for typical homes, depending on the age and structure. Sometimes, additional inspections are warranted, such as structural engineering or mold…prices for these types of inspection vary.
Closing Costs. There are fees involved with purchasing a new home. The Lender has certain fees associated with securing a loan, such as processing fees, documentation fees, courier fees, and others. Then there are fees associated with a Title Company or Real Estate Attorney preparing the documents, running a title search, and recording the deed. Some Lenders also require several months of escrowed property taxes and insurance premiums in addtion to your down-payment. Your Lender will give you a Good Faith Estimate of costs involved in securing your loan; however, the exact dollar amount will not be known until a day or two before closing. Budget a little extra money so that there are no delays in closing due to being short on cash.
Setting Up Utilities. If you have not had utility service in your name before, you may be required to put up a deposit. Check with your local providers to see what they will require. When inquiring about cable and internet service, ask the provider if they offer a “new homeowner” special. Many times they will offer a discount for the first 3-6 months on new subscriber services.
Appliances. Not all homes come with appliances. Most new homes do not come with a refrigerator, nor a washer/dryer. It is a good idea to always get your Realtor to try to negotiate for these items during the offer phase.
Miscellaneous items. Be prepared for unexpected expenses. As small as they may seem, they do add up during the first few weeks of moving into a new home. From trash cans and brooms to lightbulbs to cleaning supplies, it is very easy to spend hundreds of dollars on small incidental purchases.
Being knowledgeable and budget-minded, you should be able to breath a little easier throughout the home-buying process.
Until next time….
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