It’d be great if ALL the costs associated with buying a home appeared on the front end of the deal, but that’s not how the process works. Here are 4 things you can do to mitigate any surprises that may come up.
1. Expect the unexpected.
Just assume that something unexpected is going to pop up along the way. Instead of being so fearful of this possibility that you don’t buy a home, simply prepare yourself mentally for the fact that there will be some extra costs.
2. Budget for hidden costs.
Nobody knows how much these fees will be. However, if you set aside an extra 1/2 -1% of the total purchase price of the home, you’ll be prepared both mentally and financially with a cushion for any unexpected costs that arise.
3. Learn your local fees.
Some of the costs that you may consider “hidden” are actually standard. Depending on the area in which you’re going to purchase a home, HOA costs, property taxes, special assessments, lending rates, mortgage tax deductions, utility hookup fees and others are all relatively normal.
4. Research standard costs.
Checking websites and apps such as realtor.com for the standard costs of some of these unexpected charges can help you create a well-informed budget so nothing sneaks up on you during the process.
A while back, I had some clients who hadn’t done any research about the hidden costs associated with purchasing a home.
Fresh out of college and eager to buy, they had saved up enough money for a down payment, and that was all.
During our first consultation, I started talking about closing costs, property taxes, and other costs associated with buying a home.
They were stunned and had never heard about any of those.
So if you want to avoid similar disappointment, be sure to educate yourself ahead of time on the extra costs of home ownership before you fall in love with a property.
They ended up taking some time to save a bit more, and we got them into a home they loved.
These are just a few ways I help clients prepare for the unexpected and avoid costly mistakes when they purchase their first home.
If you want to go from renting to owning with clarity and confidence so that you can build wealth, control your environment, and enjoy the comforts of home—comment below or book a call.
About Diane Cohn
Diane Cohn runs a mastermind for anxious millennials who want to go from renting to owning with clarity and confidence so that they can build wealth, control their environment, and enjoy the comforts of home. A prior top-producing Realtor, real estate industry marketing executive, and housing market commentator on YouTube, she has profitably bought and sold property in every kind of market over 30+ years.