The (Sometimes Hidden) Costs of Buying a Home: What First-Time Buyers Need to Know

Buying a home is an exciting milestone, but for many first-time buyers, the total cost of homeownership can come as a surprise. Beyond the down payment and mortgage, there are additional expenses that can catch buyers off guard. Understanding these sometimes hidden costs can help you budget wisely and avoid unexpected financial stress. Here’s what you need to know before making your big purchase.  

More than Just a Sale Price

Many first-time buyers focus on the sale price of the home and their corresponding down payment, but don’t realize that essential (and non-negotiable) line items can add thousands of dollars to the upfront expense.

Closing Costs

These costs are typically 3-6% of the loan amount and are paid when you close on your transaction. Line items can include:

• Loan Origination & Appraisal Fees: Charged by the lender for processing your mortgage and performing a home appraisal.
• Title insurance and escrow fees: Protect you and your lender from potential ownership disputes.
• Real estate agent fees/commissions.
• Property taxes and homeowners insurance: Often paid in advance at closing.
• Homeowners insurance (unless paid directly out of pocket to your insurance company).

Inspection Fees

Home inspections are optional, but HIGHLY recommended. Some of the main inspections we recommend are:

• Thorough home inspection
• Sewer scope
• Radon gas test
• Heating/oil tank scan and/or soil samples
• Sesspool scans

Moving Expenses

Moving costs can vary widely depending on the distance, amount of belongings, and whether you hire professional movers. Even a DIY move comes with expenses, such as:

• Truck rental, fuel costs, and insurance
• Packing supplies (boxes, tape, bubble wrap, etc.)
• Temporary storage (if needed)
• Time off work to coordinate and complete the move

Immediate Repairs and Home Improvements

Even if your new home is move-in ready, there will likely be some necessary repairs or desired upgrades you’ll want to complete prior to moving your personal items in. This could include:

• Painting
• Flooring updates like replacing carpets or refinishing hardwood floors
• Appliances: If the sale didn’t include certain appliances or if the existing appliances are outdated
• Basic home maintenance tools: Items like a lawnmower, ladder, and toolset can add up quickly!
• New locks and keys for exterior doors
• Pest control

Furniture

Whether you’re upsizing or starting fresh with your interior decor, furnishing a home can be an expensive endeavor. Many first-time home buyers choose to slowly furnish their homes and/or upgrade their existing pieces over time to avoid a large upfront cost.

The key to a smooth home-buying experience is preparation. Understanding that you are not alone in this process can be helpful. People are purchasing homes everyday. But by understanding these costs, you can create a realistic budget and avoid financial surprises. Our team is here to guide you through every step of the process, ensuring you’re fully informed and ready for homeownership. If you have questions or need expert advice, don’t hesitate to reach out!