Nothing matches the excitement that you feel while buying your first home. You may have found a perfect property in a great neighborhood and the price looks right too. But all might not be as perfect as it appears because there may be several hidden costs that surface after you buy the property. These costs can be unnerving for the first-timers as they could topple the budget and leave them disheartened as well. After all the pressure they might have borne for procuring the funds for the purchase, these unexpected costs might make things even worse. If you are a first-time home buyer, you should be aware about the unexpected costs that might come up when you purchase your first home. This will enable you to cope up with the expenses and plan ahead. Let us uncover the key hidden costs that every first-time homeowner should know about:
Home inspection is an essential expense that you need to make before moving in, whether you are buying newly-constructed property or an old one. It ensures that the house is in an optimal living condition. Home inspection encompasses complete checks for the electrical systems, appliances, and construction. It is a considerable expense that varies according to the size of the property, number of rooms, and systems to be checked. A proper check of the entire property by a professional contractor gives you the peace of mind about everything being in a perfect shape and the house being safe for your family.
Property tax is another major expense that is not covered in the purchase price of the house but can catch you unawares. The tax rate varies from state to state and is to be paid on annual basis. When you plan to buy a property in a particular state, you should first do some research on the prevalent property tax rate so that you know what to expect. For instance, you can consult an expert realtor while having a look at the Meridian homes for sale. The tax rate in urban areas is higher as compared to that in rural areas. Having complete knowledge about property tax in your state is critical because this is one expense that you will have to pay every year once you buy the property.
With every asset you purchase comes the need to have it covered against risks and this applies to a new home too. Therefore, home insurance comes ahead as a major hidden cost that most first-time buyers tend to forget while purchasing the property. Besides the basic home insurance, you might to need some additional risk covers for your home. For instance, those living near water would need insurance against floods. Homeowners residing in earthquake-prone areas require earthquake insurance for their home. The insurance may cause you a lot but provides cover against some major threats, natural or caused by humans.
New homeowners usually get so excited while they buy the first house that they forget about the utility costs such as water, electricity and air conditioning. These utilities are absolutely needed to live comfortably and home owners cannot avoid this expense at all. The monthly bills depend on the size of the house, utility usage and the season. Air conditioning bills run higher in summer and drop in the winter season. If you are buying a new house, you can estimate the monthly utility costs bearing these factors in mind so that this expense does not give you any unpleasant surprises once you move in.
Another hidden cost that you will definitely come across while moving into your dream home is that of regular cleaning. The cost will definitely be higher when you move in, particularly if the house had been occupied before. Following this, you would need to invest in professional cleaning services on a periodic basis. Most homeowners have their homes cleaned once in every six months, though some may even avail a few hours of professional cleaning every month. Cleaning costs depend on the size of the house and the kind of cleaning that you want. Extensive home cleaning services that cover all the nooks and crannies would cost more. Most of the contractors charge on an hourly basis and may offer some discounts on advanced bookings.
Like all other assets, your home will also need annual maintenance, an expense that most new home owners tend to overlook. Whether it is your home roof, flooring or the backyard, each of the parts are prone to getting damaged during a year or sometimes, even sooner. You would definitely need to get annual maintenance checks and repairs done to keep the property in a good condition. Maintenance contractors can help you with professional services for this purpose. This is one cost that may take you by surprise but you cannot do without it.
Another hidden cost that may crop up anytime for a new homeowner is that of home improvement. Suppose, you had one car when you bought the house but your partner bought another one a few months later. So you would need to expand your garage to accommodate both the vehicles. Maybe, you would need to add an extra room in the backyard for your children. Sometimes, you might simply want to change the appearance of your house. Home improvement is an inevitable cost for every homeowner and it is good to be prepared for it right from when you buy your first property. Moreover, if you are buying an old house, the need for improvements could come sooner than expected. Therefore, it is better to assess the cost of improvements and compare it with the cost of a new house. Accordingly, you can decide whether you would want to buy a new property or settle for an old one with some improvements.
Home warranty is often confused with insurance but the two are different concepts. Yet both account as considerable hidden costs that a majority of new buyers are not aware of. While insurance offers a risk cover for thefts and natural disasters, a warranty provides cover for repairs and replacements that are needed due to the routine wear and tear of the house. A home insurance, for instance, covers a broken pipe in the kitchen. A warranty, on the other hand, pays up for the breakdown of a kitchen appliance or minor plumbing issues. This is one hidden cost that is optional but it is better that you take it up to economize repairs that are needed on a daily basis.
Homeowners association fees
Another unexpected cost for new buyers relates to homeowners’ association fees. Most of the suburbs and planned societies require the property owners to join special associations that are created for them. These associations charge monthly or annual fees and membership is usually mandatory for all home owners residing in area. Besides the fees, there are some other expenses that come with the membership of such associations. Some of them make it compulsory for the members to have the grass trimmed every week, while others require the mailboxes to be painted every year.
Those buying homes in high-rise apartments in North Vancouver do not have a parking space of their own. They need to pay parking expenses as a monthly rent, which is another expense that might not be foreseen. However, you cannot say no to this payment because you may have to park your vehicle outside the apartment and this may lead to some safety issues. The expenses go higher for the families that own more than one vehicle. Apartment buildings charge some additional fees for services such as security guards, infrastructure maintenance, and more.
As an aspiring homeowner, it is better to expect the unexpected and be prepared for several more costs when you move in. The best approach is that of research and planning, which should initiate right when you start looking for properties. Smart buyers always look for homes that fit in their budget; even if some improvements are needed, the effective cost should still fit into budget. Buying aged properties might seem like a tempting proposition because they always come cheaper than the new ones. But there is always a risk that you might end up spending more than that on buying a new house in the same area and of the same size. Therefore, you should think carefully and consider every single hidden cost that could come up in the form of repair, maintenance or improvement. Get everything on paper for a better idea of expenses that you might have to incur before, during and after moving into the new house. Don’t fear these expenses because most of them actually add value to the property in the long run. Buying your first home can be a tough journey but you can definitely learn with this experience and become a smart homeowner.