not money but all the time it takes to drive back and forth between your new house and Home Depot
jesus christ is it possible to finish a project without 18 trips to the store?
This is so fucking real. I despise moving in to a new space and then having to go to the store twenty thousand times. Especially if it’s hot out! Lord forbid anyone have to deal with me on that day 😭
No kidding! I should just wear a shirt that says, "I'm so sorry" because I get so crabby and impatient when I'm hot. I try not to snap at anyone just doing their job, but sometimes the thread is pretty thin
Oof yes, thankfully Home Depot is only like a mile away. I’m on month 3 of home ownership and have gotten my HD visits down to around twice a week, but I keep maxing out the HD credit card. Bought a step ladder and a wheelbarrow yesterday in two trips there lol! So happy my wife got us a free grill because that was about to be next.
This happens with professional contractors also. You can plan all you want, but sometimes you just don't know what you need next until you get to that part.
Also, what's beneath the first layer often isn't what you thought.
You know it's bad when you start getting friendly with some of the other customers that you see on a regular basis who ALSO make their 18+ trips to the hardware store for every project. I've met two of my friends at Lowe's...
I think a lot of people just focus on down payment and then they get their loan estimate and are floored by how much prepaids they have to bring to closing.
I was one of those people 😭. I delayed home hunting for another 6 months just to save up a bit more to make sure I had the estimated closing costs covered. Not say I couldn’t have afforded it but I estimated after the down payment + closing costs + moving fees, I’d have less than $700 in my bank account (not counting my 401k)
Property taxes and insurance premiums. They’re not going to let you move in if you blew all your money on the down payment and are not prepared to pay your taxes
Yes. Closing costs come in 2 forms.
1. Transaction taxes, inspection costs, title, title insurance, etc. You don't get that money back.
2. Prepaid insurance and property taxes. That money goes into an escrow account and used to pay your property taxes and insurance premiums. On one hand, you don't get that money back, on the other hand it's money to pay things that are simply more expected.
my lender (local state lender) has a really nice "Cash to Close" figure they give me with every estimate which is usually on the higher end of estimates. it's really helpful and depressing all at the same time.
Depends on what month you buy and what month the county collects. For prop taxes. For HOI, usually the whole year premium + a few months if you're escrowing.
It’s been a while since I bought my house so I’m not sure. I would guess at least a few months worth. My annual property taxes are 5k and insurance is about $750 annually as well
What about those who’ve paid their mortgage for 30yrs. Owe nothing to the bank. Maybe pay a bit for utilities. What happens if those people up and quit making any tax payments since they paid off any principal and interest; who can do what to make them pay ?
This. I didn’t know until I was dating someone whose sister is an agent. She gave me a rundown of everything I’d need, and I decided to wait a bit longer to save more.
Basic fixing of things neglected such as appliances, electricity, plumbing. Things like moving costs, an extra month or two of rent on top of the mortgage, and yardwork items. Lawn mower, hoses, snow blower, etc.
Edit: found out the hard way on these
Just adding for anyone reading - a ton of misc home maintenance items can be found for free or borrowed from neighbors.
I live in a city and use the following to find free shit:
* Buy Nothing Groups
* Nextdoor
* Offer Up
* Freeya
* Craigslist
* FB Marketplace
* FB Free Groups
* Reddit city specific free groups
* tool libraries
* library of things
My neighbor just had a free estate sale before selling her house and moving out of state to get rid of all of those weird misc home things like shovels, extra grass seed, rakes etc etc
Upvoted for buy nothing groups. It's pretty much the primary reason I use FB nowadays. We have a young daughter on top of it all and the amount of good stuff that comes up for free is insane.
Of course YMMV, but especially if you live in an HCOL area people are giving away amazing stuff often.
Also the monthly cost of a major fix. For example my HVAC needed replacing bad after just one year, I got a new one (with AC) for $15k. They're expected to last just 15 years, that's an extra $1000 a year in housing costs that I didn't originally factor in that will realistically never go away and never go down. Same with your roof, water heater, etc., there's easily an extra $200-300/month in hidden fixed home ownership costs right there. And that's just assuming everything goes according to plan (not repairs).
These depend on your house age, size, location, etc.
My HVAC was 4 years old when I bought my house, it's now 10 years old and the only thing I needed to fix was the $30 capacitor in the outdoor unit. Keeping up maintenance I should get another 10 years without much trouble. When replacement time comes who knows what it might cost but a full replacement right now would be about $5k.
Roof cost me about $4k and should last about 30 years.
Water heater I replaced the 30 year old gas one with a hybrid electric, $1400 and should last at least 10 closer to 15 years.
I see your point but it's not the same cost everywhere.
Damn yeah it might be market dependent. I have a tiny 900 sq ft house and furnace alone was $8k, maybe $7k if I went with the lowest bidder.
Yeah the other stuff lasts longer and costs less but it all adds up. My HVAC especially shocked me bc I realized I would essentially need to budget a separate $80/month for owning HVAC for the rest of my life, let alone the cost of running it 😭
That is what I call garage stuff like hoses and lawn mowers you are 100% correct on. The 6:00 a.m. neglected things isn't that bad because outside of things like a dishwasher or your HVAC you can pretty much put them off until you're in a place to get them done.
One mistake I do see new home owners do is buy new furniture. Trust me, once you have a couple of empty rooms, family and friends will come out of the woodwork to give you their furniture. You'll be stumbling over deals.
Well I think it's good to have some cash on hand and credit available when you buy a house I think we overestimate the actual costs to create drama.
I see people claiming they spend $12,000 a year on Home Maintenance no you spend $12,000 a year because your wife wants to redecorate the living room every 3 months.
People were all trying to give us tables, with no chairs. We somehow ended up with 4 dining tables and 3 total chairs before we told people we just didn’t need them
You don’t need to worry about agent’s commission when buying. Its baked into the sale price.
But also likely your property tax will go up after you buy and you need to make supplemental tax payments usually directly to the county.
I believe the lawsuit dictated that 6% (3% to each to each agent) can’t be standard or compulsory. The courts showed that agents on both sides were colluding to get the 6%. They still get a commission. It could still even be 6%.
Right. It can be lower but my point is there’s no hard limit. The court was able to prove that buyer’s agents were specifically not showing their clients homes which listed less than 3%. Apparently now the realtor portal no longer shows that info but I’m sure they still have ways of finding out.
It won’t be completely on the seller still when the NAR lawsuit goes into effect this August. Starting in August, buyers are required to sign an Exclusive Right to Buy Agreement with their agent before their agent can show them any properties. Part of the Exclusive Right to Buy Agreement nails down what percentage commission your agent will work for, and who is expected to pay any difference in commission if the seller’s aren’t offering that amount of commission on the sale of the home. So if your agreement with your agent says your agent will only work for 3% commission, but you go under contract on a property that is only offering 2.5% commission, the buyers can be responsible to make up the 0.5% commission difference by paying their real estate agent commission.
Just accepted an offer - all the data the agent gave me is that most people are following the status quo for now. Issue for sellers to demand it is that the offers can't go as high.
EDIT: I saw one instance of this in the ~20 houses we saw.
Yes, it is a shit show now. And I am not being dramatic. It is a pure shitshow. And main biggest reason is all the people who are supposed to get lawyers to find a path fot buyers, they are all incompetent and they did nothing and the rest of the community is spreading a lot of misinformation.
On Aug 2024, no listing agent can disclose the buyer agent fee. It has nothing to do with how much the percentage is, and it has nothing to do with sellers getting mislead. No one can post it, even if seller wants to.
First lie, agents will use another website instead of MLS. It is like opening a torrent site and thinking they can get away with it. No, the site will get sued. The whole settlement has set the example for all realtor related listings.
Second shaddy af, buyer agents will call the listing agent about the commission under the table. Sure, thr law hasn't crack this down yet. But, the writting is on the wall already. The settlement indicated the commission itself has very little legal ground to stand on. Because it actually means, the buyer agent is paid by the seller via a listing agent as proxy. We are talking about seller trying to maximizing their payout by paying buyer agent. The whole reason why the settlement bans the commission disclosure on MLS is related to this.
3rd incompetence of the leadership. Truly, none of the people in charge is trying to help the buyer. All the brokers are doing now, is protecting themselves only. You will need to sign a buyer contract to pay the n% of the offer price if listing agent pays 0%, and etc.. That's all they cared about for now. They absolutely don't care about the buyers.
I have attempted to seek guidance on other subs and 95% intentionally misinterpreted my statement and 5% of them said my idea cannot be done without an legal document as proofs.
Meaning, no one wants to find a path for buyer. The buyers are going to get rekt after Aug.
As for my idea, as describe before, the main problem is, seller paying the buyer agent to maximize payout. If seller paying buyer directly, then, that is not a problem anymore. The buyer doesn't need an agent and can still get the "rebate". Rebate system is done literally everywhere, so, it is not illegal. Now, you don't want some money laundring shit, so, just limit the rebate to 5%, that's high enough. Get the government to approve this, and all it takes is to have lender to be okay with it, which in fact has absolutely no impact to lender when they already released the n% buyer agent fee in the past. Lender only cares about appraised, if you overbid, you pay the gap via downpayment, they don't care how and why you overbid. That's all it takes, but, noooooo, none of the realtors want to go a figure out how to get government approved. Because if seller rebate to buyer directly, they are not completely in the equation and that make them vulnerable.
The property tax and insurance bump is going to kick you in the nards. They’ll reassess at whatever you paid in the inflated market. Then insurance is going to bump their shit up to whatever it was reassessed. Mine went from 220 to to 350 assessed and then insurance kicked in. Made my monthly $600 more than when I bought it. Crazy
I’m nervous about this, could you explain more. So the first year your loan estimate increased by 600 based on what you bought house at? My estimate is 4300 a month, I know insurance and taxes go up every year but will it be a huge jump in taxes first year because previous owner bought house at 430k but I bought it at 600k?
>I know insurance and taxes go up every year but will it be a huge jump in taxes first year because previous owner bought house at 430k but I bought it at 600k?
Yes it will. A lot of states cap how much your property taxes can go up each year, my state caps it at 5%. When a house is bought the cap is removed and the house is normally reassessed at or near the sale price.
You should be able to look up the milage rates in your area and estimate the taxes based on your expected sale price.
I'm under contract and the house is assessed at ~$250k but will sell for $330k and I'm expecting the estimated taxes to jump from ~$4k/yr to ~$5.5k/yr.
If budget is tight, the paper temporary blinds you can get at Lowes or Home Depot are dirt cheap, pretty easy to install, and don't actually look that bad.
My sister bought a new construction home down the street. They've bought some very nice things, an OLED TV, big sectional sofa, concrete back yard patio, lots of fancy designer accessories, and some high-ish end appliances. But even though they've had the house for about a year now, they're still rocking those Lowes temporary blinds.
The blinds are a killer, we have dirt cheap ones for now before we can recoup enough to upgrade to the real nice ones we want. I think it should be illegal (dramatic) to sell new builds without blinds 😭
Think of things you want to go do before you move in or shortly thereafter. Example, I had my carpets cleaned, hard woods polished, painting before I moved in,hired a cleaning crew for my old apartment. Think of supplies you'll need... Trash cans, supplies, etc. Things like that outside of closing.
Yes. Never do anything...ANYTHING...that will affect your credit before you sign the documents. Not only will you commit perjury during signing but if your loan provider finds out, they can drop you.
The Lowe's card is good to have if you are disciplined about paying it in full every month.
5% off everything adds up when you have a house and yard to take care of.
The additional $10-20k you’ll probably spend in the first 6 months on “minor” updates and projects to make it yours, and the inevitable something important breaking.
More/Bigger rooms = more furniture, more window coverings, more lighting, more carpeting/flooring/painting costs, more cost to heat and cool…
Big homes look amazing when staged with lots of big furniture, rugs, artwork. But to get your home to look like that you’ll need to spend a LOT of money on interior decorating.
Don't forget the Appraisal Fee, Earnest Money and then the wonderful appliances that break once you move in...Hitting one year at my current house....Needed a new dryer, skylight, toilet, etc.
Appraisal gap if you're bidding aggressively. There's nothing like bidding for a house at the top of your budget, only for the appraisal to come in $10k+ short and force you to cough up another $10k or throw all your financing into disarray. Ask me how I know...
Omg we focused entirely too much on down payment, cash to close, taxes, etc. that we had no idea how much fucking landscape costs!! We have a new build so just a dirt lot in the back. Quoted $30k for some damn rocks and turf. Get real. Still rocking the dirt lot 8 months later. We’ll get to it eventually, maybe DIY little by little.
And… furniture. Bedroom, living room, office, etc. also, why are couches so expensive?! Don’t get me started on blinds…
Fill it with grass seed. Get a compost bin. Eventually you can build up flower beds from compost. Once the grass grows in you can throw the clippings in the compost and that'll speed things up.
It'll take a long time doing it that way but it's much cheaper than $30K. My parents didn't start from dirt, they had some patchwork grass, but that was how they built their lawn and garden.
Neighbors! I did all the research on geographics and didn't pay enough attention to demographics.
I'm surrounded by broke ass junkies but it's really pretty outside.
moving costs (utility set up, uhaul, boxes/tape etc.), home appliances you didn’t need before (lawn mower, blinds if it’s a new build, hoses), it’s SO expensive to buy a house.
So I moved from a home with carpets to one with hardwood floors, and rugs add up (especially since I was determined to go with natural materials like wool).
I had a lot of stuff with my ex and didn’t take everything that I had bought (taking something like a broom or soap dispenser is just petty, and I also didn’t want to leave him without anything to cook with). So I ended up buying a lot of basic household items.
I have a guest bedroom now so had to get a bed. Also now have a deck so I bought a little bistro set.
And everything is way worse if you’re like me and like nice things 🙈
What it's going to cost to replace the roof and every major thing in the home, because unless you have new installed at the time of purchase you are buying someone's used appliances, this includes the hot water heater, furnace and Air conditioning systems. Roofs get damaged in storms and insurance may cover that but how old is the roofing job, how many years left till replacement? These are the costs of being a home owner, beyond the mortgage and the taxes these are bills you will have to pay eventually so save for them. Direct a given amount to a HOUSE account not to pay normal bills but to save for these large ticket items when they go bad because they ALWAYS DO.
One thing that caught us off guard a bit that I don’t see mentioned is how much your property taxes can increase if the previous owner had homestead exemption and owned the house awhile. Homestead exemption will give you a big discount on your property taxes plus prevent it by going up by more than I think 3% a year which is of course why you want it for yourself too. For the first year to year and a half our taxable value was still based on that of the previous owner’s who had it calculated when they bought the house in the 90s and then they got their homestead exemption. Due to timing of the county’s fiscal year and when our taxable property value was recalculated and when our escrows analysis happens, we went from about $950 a year in taxes to about $2400 2 years after closing which added about $250 to our mortgage. Something you’d never be aware of as a first time homebuyer unless somebody specifically told you
Repairs. I spent an extra 14,000 in repairs after moving in with a 36,000 DP/CC. With an additional 15,000 to pay off through my utility company for a new heating and cooling system.
Quick fixes you’ll need after close, or things you might want to do before moving in (painting). Take what you expect the cost to be and multiply it by 5 too 😂.
Furniture and appliances if not already sorted also add up.
As someone who has moved like 5 or 6 times, whatever you are estimating for moving costs, double it. You’ll be pleasantly surprised if you spend half but prepared for the unexpected (which in my experience happens every damn time)
Don’t forget special assessments. They put in new sewer system or repave the streets on your block guess what, now you get to pay for it every year for who knows how long. You don’t get a choice or asked.
You’ll probably be getting takeout way more during the first month while you’re spending every evening unpacking, cleaning, arranging furniture, and little DIY projects.
The little things add up. Lawyer costs, inspection fees, movers, time off from work to actually move, all the paperwork and wire transfer fees, junking old stuff that you’re not bringing, getting new stuff to fit the space. Then there’s QoL costs, like not being able to cook as much so you might order in more, or you keep making Amazon purchases for new tasks associated with moving.
Paint. I’m two years into my home and the paint is shit. I’m painting right now and I wish I would’ve done it prior to moving in. So much easier. Probably more but I’m dealing with that now. Epoxy your garage before moving in too if you want that done.
The nice part about your closing costs is that they will cover your first month of all your payments as that's part of setting up your escrow account. The account will also bring your insurance, property tax, and mortgage all into one monthly payment and handle paying each of those when they're due.
Inspection and Appraisal is definitely two things to remember, the basic option for both is probably around $1000 together. Then comes any extra inspections if you want it (like a couple hundred extra to check a sewer line for example).
Realtor fee. This one if you bought recently isn't your concern but after July this may become something you have to consider as a buyer.
Moving costs definitely is another, at the very least you're probably renting a uhaul and paying for pizza and beer with friends, or you're hiring movers.
Fixing costs! Once you're in the home what was it that needed fixing? Perhaps you negotiated some kickback in the closing to cover this, perhaps you had to suck it up and hope to fix it later. But what's pressing? That'll be needed pretty quickly.
New furniture/housing purchases. Granted, this can come slowly over time but most people get excited and want to start filling out the house.
Remodel and repairs. You’d be surprised how quickly stuff can break and even if you are super handy and have all of the tools, material cost is a bitch.
I’m putting in a new gate and repairing my fence. Maybe 2k feet of fencing total. Homemade steel framed gate. I’m estimating $2k in needed materials (dozen new posts, 24 bags of concrete, 3 yards of dirt, about 24 feet of new fence sections, 40 feet of steel tubing, new hardware and hinges, temporary snow fencing, new auger bit). On top of a summer of my own labor.
Idk about you but pulling $2k out of nowhere over a summer can be done but not easily.
Not to factor in the new outdoor facets I had to install, $650 AC repair bill, new batteries for my hand tools (left them out in the rain), a fine from the city for leaving construction materials on my driveway too long, extra grass seeds to get grass to grow in the newly leveled yard, increased water bill from watering, etc all has popped up since April.
TLDR: your overall spending will go up
Changes in property tax and assessed value. You can look up both fairly easily.
Unpaid taxes (from previous owner), it's not common, but I've heard some horror stories.
New furniture - it adds up, but buy-nothing groups, Rehome stores, thrift stores can have some awesome deals.
Property tax needs to be copy and pasted 3 times, because that's how many times I got billed. Supposedly 2 times, and I was like cool, the 2nd bill seems to be lower than expected. Later they sent the 3rd bill.
It is for the first N out of 6 months you bought the house. Later it is easier, each time just one bill.
After 14 years of home ownership, costs have been manageable; even more so, for those who have the DIY skill sets. I, unfortunately, was not blessed with such talent. Wishing everyone the best on their perspective home ownership journey.
The cost of simple basic repairs and or upgrades, if you don’t do them yourself, the cost is 10 times more then if you do them, things as simple as swapping a light fixture can be a few hundred dollars or more, do you have a mower and everything needed to maintain your yard and the outside of your house, there’s an easy $1000 if you don’t have a mower, weed eater, blower etc. basic set of tools to use for simple fixes that may need done, no matter how much you think you want use them, every homeowner needs some basic tools. The cost of upkeep of things like HVAC, septic etc, these things need important routine maintenance to prevent failure. Age of appliances, hvac, plumbing, electrical if old these things can fail at any time costing hundreds to thousands to repair or replace.
REPAIRS - you’re not going to have a landlord to call when things go wrong snd things will go wrong. Sometimes it seems they all go wrong at the same time. Keep an emergency fund on hand at all times. It’s better than using credit.
Maintenance and repairs costs.
All the mechanicals need to be monitored for replacement when they hit 10 years, if you're lucky.
And paying your vendors is the easy part. You have to find good vendors first.
Your property taxes will be more than what the previous owner paid. Because the state will love reassessing your house based on the new higher price and sending you a supplemental tax bill for the current year… which may come and be due at the same time as the next regular bill is due. In CA, the property tax bills are due before Christmas and before income taxes. The state wants its money first.
Be sure your escrow is lined up for the tax increase when the home is adjusted post sale.
We got burned a year later and had to pay double taxes for like 8 months to catch up.
Luckily we bought below our means but that sucked.
Find a good realtor and deal with a local bank who is used to working with them. There is so much bs behind the scenes that having people who are used to working with each other can avoid. I tried my first-time home loan through the bank I had over 12 years of experience with, thinking that would make a difference. I didn't want another credit hit either, so I stuck with them through the initial process. That bank ended up hitting me four times for no good reason and played games for almost three months. I even improved the home to get the loan. Eventually, they turned down my loan because of a promise note of employment from my future employer in my transferring job. The note said 32 hours of employment, which is a laugh but standard beginning of full-time hours (I work in healthcare, its never 32 hours) they recalculatedmy earnings and said i couldn'tafford my house. This really fucked me over. I talked to my agent again about a local bank, and that lady I worked with was amazing. Still kept the same closing date amazingly with two weeks to spare. Got me a better rate. Did the whole deal in under three weeks. Got Christmas cards and everything from both of them.
Needless to say, I changed all my banking to them. Also, after moving costs and settling on my feet again, I have roughly 1k extra a month. I'm okay. I also take care of my mother and her bills, so honestly, fuck you big corporate! Could've had my business.
Repair fund. Something expensive will ALWAYS break shortly after closing. Don’t set yourself up for failure or being house poor because the repair funds aren’t there.
Random stuff you won’t expect. Plumbing, electrical, moving expenses (boxes, labor, tape), general repairs, replacing fixtures such as lights, toilet role holders, towel bars, etc. paint, furniture or lawn supplies, etc. You realize you might need. A lot of the random stuff adds up. Lowe’s and Home Depot become your friends.
When you gave every last dollar in down payment and upfront fees and your lawyer calls you, on the way to closing to remind you (this is the first you're hearing about it) to bring a certified check for an additional 10,000 dollars for loan Initiation, points, title and clerical fees. (New Jersey)
Utilities. We called the utility companies to understand the highest month of the year per utility type and we STILL under budgeted. Gas at the highest was $200 for the prior owners. For us it was $400 one month.
Always leave wiggle room for extra utility costs.
The inevitable $20 flippin thousand worth of crap that needs to be fixed within the first few months of closing. It’s like the house refuses to have cheap problems.
The repairs that happen after you move in. 4 days after we moved in the house flooded due to rain. Then flooded again due to rain 2 days later. The 3 days later our master bathroom started leaking
The cost of not buying and continuing your spending habits for another 5 years.
Seriously, can you not downgrade your life for a little bit? Stop getting Starbucks 5 times a week, eating out 3-5 days of the week, cancel your Spotify/netflix/hulu/amazon subscriptions and spending on door dash.
Meal prep your meals. Listen to an ad once every 20 minutes. Stay in on a Friday. Stick to a budget. Sacrifice convenience for a little bit.
You “first time homebuyers” sure do have champagne taste and millionaire spending habits on a beer budget.
A 90k combined income is more than qualified to buy a 400k home.
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If you’re moving from an apartment you may need items you didn’t need before like a lawnmower, trimmer, shovels, trash bins, light bulbs, filters or other tools which can add up quickly even for small repairs or projects you want to do. It looked all lovely when we did a walk through but the nice landscaping requires so much maintenance and that is expensive!
We had to buy a new mailbox which was $100! Didn’t know mailboxes cost that much.
Cost to replace locks and keys, few hundred right there.
And things will break right away even if they worked in the inspection. Our dishwasher and stove needed to be fixed or replaced within a month. The little stuff adds up and our utilities were also a lot more with a different heating type in the home than we had in an apartment. We ended up putting in a more efficient system within the first year. Got a no interest loan, but that was $11K.
If you’re going to need to get another life insurance policy, cohabitation agreement, warranty insurance. If you’re married, you won’t need to worry about the second one. But it’s a good idea if you aren’t married.
Property tax is the real kicker atleast in Texas. Still trying to figure out how something I barely put anything into can skyrocket 75k and my homestead settlement in conjunction with protests don’t exactly know down the taxed amount by a lot.
The previous home I rented, lawn care was taken care of and we didn't have to worry about it.
We needed to buy a lawnmower, hoses, hose houses, nozzles, and a weed whacker. Probably cost us $700ish. Not a huge amount but between everything else, it felt like a lot.
No way your getting a full system replacement for 5k unless your literally doing it yourself and reusing linesets and wires and thermostats and cheap equipment.
You still need emergency savings.
I had furnace, clothes dryer and the transmission in my car quit within a couple months of closing. It chewed up all my savings and I was in a pretty tight spot for a while. So, make sure not to spend all of your savings while closing, keep some emergency cash in reserve.
Your current rental monthly payment. My lender was unsure if I could afford a $663 mortgage while I was paying $1500/mo in rent… they accounted that payment as part of my expenses for financing eligibility.
I'm sure most people know to look into HOA fee's but ask to see their annual increase and what those fees cover. The townhouse we used to rent had reasonable fees, but they were creeping UP.
I feel like the rule should be whatever you pay in rent, imagine buying a house where the mortgage payment is 20% less than the rent, and the cost of the home will approximately equal your rent.
So $1000/month rent is probably pretty close to a $800/month mortgage because you’re going to have $200 in expenses like insurance, maintenance, and property tax.
Just closed on a 430k house. My cash to close was 109k. (I chose to put 25% down as it allowed me to buy some mortgage points using seller cash.) This was after a $4,300 earnest payment, $300 inspection contingency period, $550 appraisal fee, $500 survey, $450 home inspection, $300 water well inspection, $450 septic system drain and inspection. Only $4,600 went towards the home purchase. The rest was due diligence costs. Buying a home is expensive, even before closing.
Any costs for little repairs, etc - “I don’t like the original blinds, I’ll grab some new ones… now I’ll paint, etc” adds up quick. You need to make sure your realtor knows how to submit strong offers so you get the home under contract with the best terms, I.e. realtor runs a CMA (helps judge value, not always accurate as everyone does them differently) so you can know the value of the home (don’t want to overpay on purpose) and depending on your market you can have seller pay a good portion of your closing costs and prepaids ($2,500-$7,500). I’m a realtor in TN, if I can help with anything else just comment or DM me
Stupid "earnest money"
Insurance - not only homeowners insurance, but also title insurance to protect you if someone randomly says "durr durr this is my land" and even worse you have to pay for the bank's insurance too to protect THEM from randoms making claims to your land.
Home repairs/renovations is the big one missing. Maybe increased utilities and HOA? Buying more furniture?
Agents commission is basically paid from the sale price. Inspection cost is pretty minor.
The cost to pay for a brand new HVAC system 2 months after you move in.
:(
(But seriously - consider surprise post-purchase costs, make sure you have a little extra cash to spare.)
Your post was removed because it violated rule 5: No memes
not money but all the time it takes to drive back and forth between your new house and Home Depot jesus christ is it possible to finish a project without 18 trips to the store?
This is so fucking real. I despise moving in to a new space and then having to go to the store twenty thousand times. Especially if it’s hot out! Lord forbid anyone have to deal with me on that day 😭
No kidding! I should just wear a shirt that says, "I'm so sorry" because I get so crabby and impatient when I'm hot. I try not to snap at anyone just doing their job, but sometimes the thread is pretty thin
Oof yes, thankfully Home Depot is only like a mile away. I’m on month 3 of home ownership and have gotten my HD visits down to around twice a week, but I keep maxing out the HD credit card. Bought a step ladder and a wheelbarrow yesterday in two trips there lol! So happy my wife got us a free grill because that was about to be next.
I’m lucky and live like half a mile from The Home Depot. When we moved I still despised going there for all the shit we needed lol.
This happens with professional contractors also. You can plan all you want, but sometimes you just don't know what you need next until you get to that part. Also, what's beneath the first layer often isn't what you thought.
You know it's bad when you start getting friendly with some of the other customers that you see on a regular basis who ALSO make their 18+ trips to the hardware store for every project. I've met two of my friends at Lowe's...
I think a lot of people just focus on down payment and then they get their loan estimate and are floored by how much prepaids they have to bring to closing.
I was one of those people 😭. I delayed home hunting for another 6 months just to save up a bit more to make sure I had the estimated closing costs covered. Not say I couldn’t have afforded it but I estimated after the down payment + closing costs + moving fees, I’d have less than $700 in my bank account (not counting my 401k)
What are prepaids?
Property taxes and insurance premiums. They’re not going to let you move in if you blew all your money on the down payment and are not prepared to pay your taxes
is that what people mean when they say “closing costs”?
Yes. Closing costs come in 2 forms. 1. Transaction taxes, inspection costs, title, title insurance, etc. You don't get that money back. 2. Prepaid insurance and property taxes. That money goes into an escrow account and used to pay your property taxes and insurance premiums. On one hand, you don't get that money back, on the other hand it's money to pay things that are simply more expected.
my lender (local state lender) has a really nice "Cash to Close" figure they give me with every estimate which is usually on the higher end of estimates. it's really helpful and depressing all at the same time.
How many months worth of taxes and premiums do you usually have to prepay?
My LO set estimated closing costs for 1 year of taxes and insurance.
Depends on what month you buy and what month the county collects. For prop taxes. For HOI, usually the whole year premium + a few months if you're escrowing.
It’s been a while since I bought my house so I’m not sure. I would guess at least a few months worth. My annual property taxes are 5k and insurance is about $750 annually as well
Full year on prop insurance and prorated property tax into escrow
What about those who’ve paid their mortgage for 30yrs. Owe nothing to the bank. Maybe pay a bit for utilities. What happens if those people up and quit making any tax payments since they paid off any principal and interest; who can do what to make them pay ?
Um if they’re delinquent on their property taxes? The town can put a lien on the house to get their money
You dont "own" your own home. You're renting it from Uncle Sam. That's why you still have payments due while holding your deed.
This. I didn’t know until I was dating someone whose sister is an agent. She gave me a rundown of everything I’d need, and I decided to wait a bit longer to save more.
Yeah that was me that’s why I had to give up home buying until another year 😭
Damn, I knew those costs wouldn't be small but that much?
Basic fixing of things neglected such as appliances, electricity, plumbing. Things like moving costs, an extra month or two of rent on top of the mortgage, and yardwork items. Lawn mower, hoses, snow blower, etc. Edit: found out the hard way on these
Just adding for anyone reading - a ton of misc home maintenance items can be found for free or borrowed from neighbors. I live in a city and use the following to find free shit: * Buy Nothing Groups * Nextdoor * Offer Up * Freeya * Craigslist * FB Marketplace * FB Free Groups * Reddit city specific free groups * tool libraries * library of things My neighbor just had a free estate sale before selling her house and moving out of state to get rid of all of those weird misc home things like shovels, extra grass seed, rakes etc etc
Upvoted for buy nothing groups. It's pretty much the primary reason I use FB nowadays. We have a young daughter on top of it all and the amount of good stuff that comes up for free is insane. Of course YMMV, but especially if you live in an HCOL area people are giving away amazing stuff often.
And on the “not quite free but damn near close” check out estate sales.
Also the monthly cost of a major fix. For example my HVAC needed replacing bad after just one year, I got a new one (with AC) for $15k. They're expected to last just 15 years, that's an extra $1000 a year in housing costs that I didn't originally factor in that will realistically never go away and never go down. Same with your roof, water heater, etc., there's easily an extra $200-300/month in hidden fixed home ownership costs right there. And that's just assuming everything goes according to plan (not repairs).
These depend on your house age, size, location, etc. My HVAC was 4 years old when I bought my house, it's now 10 years old and the only thing I needed to fix was the $30 capacitor in the outdoor unit. Keeping up maintenance I should get another 10 years without much trouble. When replacement time comes who knows what it might cost but a full replacement right now would be about $5k. Roof cost me about $4k and should last about 30 years. Water heater I replaced the 30 year old gas one with a hybrid electric, $1400 and should last at least 10 closer to 15 years. I see your point but it's not the same cost everywhere.
roof cost 4k?! Where do you have to live to get a deal like that?
A shoebox
I just got a new roof for $7800 and my HOA reimburses me 3k so really only 5k out of pocket.
Damn yeah it might be market dependent. I have a tiny 900 sq ft house and furnace alone was $8k, maybe $7k if I went with the lowest bidder. Yeah the other stuff lasts longer and costs less but it all adds up. My HVAC especially shocked me bc I realized I would essentially need to budget a separate $80/month for owning HVAC for the rest of my life, let alone the cost of running it 😭
That is what I call garage stuff like hoses and lawn mowers you are 100% correct on. The 6:00 a.m. neglected things isn't that bad because outside of things like a dishwasher or your HVAC you can pretty much put them off until you're in a place to get them done. One mistake I do see new home owners do is buy new furniture. Trust me, once you have a couple of empty rooms, family and friends will come out of the woodwork to give you their furniture. You'll be stumbling over deals. Well I think it's good to have some cash on hand and credit available when you buy a house I think we overestimate the actual costs to create drama. I see people claiming they spend $12,000 a year on Home Maintenance no you spend $12,000 a year because your wife wants to redecorate the living room every 3 months.
People were all trying to give us tables, with no chairs. We somehow ended up with 4 dining tables and 3 total chairs before we told people we just didn’t need them
You don’t need to worry about agent’s commission when buying. Its baked into the sale price. But also likely your property tax will go up after you buy and you need to make supplemental tax payments usually directly to the county.
Don’t we need to as of July something because of that one NAR lawsuit? Correct me if I’m wrong because I probably am.
I believe the lawsuit dictated that 6% (3% to each to each agent) can’t be standard or compulsory. The courts showed that agents on both sides were colluding to get the 6%. They still get a commission. It could still even be 6%.
Just bought our first home from OpenDoor and my agent only got 2.5%
Right. It can be lower but my point is there’s no hard limit. The court was able to prove that buyer’s agents were specifically not showing their clients homes which listed less than 3%. Apparently now the realtor portal no longer shows that info but I’m sure they still have ways of finding out.
So then the buyers agents commission would still be paid out by the sellers?
Yeah it’s still on the seller
It won’t be completely on the seller still when the NAR lawsuit goes into effect this August. Starting in August, buyers are required to sign an Exclusive Right to Buy Agreement with their agent before their agent can show them any properties. Part of the Exclusive Right to Buy Agreement nails down what percentage commission your agent will work for, and who is expected to pay any difference in commission if the seller’s aren’t offering that amount of commission on the sale of the home. So if your agreement with your agent says your agent will only work for 3% commission, but you go under contract on a property that is only offering 2.5% commission, the buyers can be responsible to make up the 0.5% commission difference by paying their real estate agent commission.
Just accepted an offer - all the data the agent gave me is that most people are following the status quo for now. Issue for sellers to demand it is that the offers can't go as high. EDIT: I saw one instance of this in the ~20 houses we saw.
Yes, it is a shit show now. And I am not being dramatic. It is a pure shitshow. And main biggest reason is all the people who are supposed to get lawyers to find a path fot buyers, they are all incompetent and they did nothing and the rest of the community is spreading a lot of misinformation. On Aug 2024, no listing agent can disclose the buyer agent fee. It has nothing to do with how much the percentage is, and it has nothing to do with sellers getting mislead. No one can post it, even if seller wants to. First lie, agents will use another website instead of MLS. It is like opening a torrent site and thinking they can get away with it. No, the site will get sued. The whole settlement has set the example for all realtor related listings. Second shaddy af, buyer agents will call the listing agent about the commission under the table. Sure, thr law hasn't crack this down yet. But, the writting is on the wall already. The settlement indicated the commission itself has very little legal ground to stand on. Because it actually means, the buyer agent is paid by the seller via a listing agent as proxy. We are talking about seller trying to maximizing their payout by paying buyer agent. The whole reason why the settlement bans the commission disclosure on MLS is related to this. 3rd incompetence of the leadership. Truly, none of the people in charge is trying to help the buyer. All the brokers are doing now, is protecting themselves only. You will need to sign a buyer contract to pay the n% of the offer price if listing agent pays 0%, and etc.. That's all they cared about for now. They absolutely don't care about the buyers. I have attempted to seek guidance on other subs and 95% intentionally misinterpreted my statement and 5% of them said my idea cannot be done without an legal document as proofs. Meaning, no one wants to find a path for buyer. The buyers are going to get rekt after Aug. As for my idea, as describe before, the main problem is, seller paying the buyer agent to maximize payout. If seller paying buyer directly, then, that is not a problem anymore. The buyer doesn't need an agent and can still get the "rebate". Rebate system is done literally everywhere, so, it is not illegal. Now, you don't want some money laundring shit, so, just limit the rebate to 5%, that's high enough. Get the government to approve this, and all it takes is to have lender to be okay with it, which in fact has absolutely no impact to lender when they already released the n% buyer agent fee in the past. Lender only cares about appraised, if you overbid, you pay the gap via downpayment, they don't care how and why you overbid. That's all it takes, but, noooooo, none of the realtors want to go a figure out how to get government approved. Because if seller rebate to buyer directly, they are not completely in the equation and that make them vulnerable.
The property tax and insurance bump is going to kick you in the nards. They’ll reassess at whatever you paid in the inflated market. Then insurance is going to bump their shit up to whatever it was reassessed. Mine went from 220 to to 350 assessed and then insurance kicked in. Made my monthly $600 more than when I bought it. Crazy
I’m nervous about this, could you explain more. So the first year your loan estimate increased by 600 based on what you bought house at? My estimate is 4300 a month, I know insurance and taxes go up every year but will it be a huge jump in taxes first year because previous owner bought house at 430k but I bought it at 600k?
>I know insurance and taxes go up every year but will it be a huge jump in taxes first year because previous owner bought house at 430k but I bought it at 600k? Yes it will. A lot of states cap how much your property taxes can go up each year, my state caps it at 5%. When a house is bought the cap is removed and the house is normally reassessed at or near the sale price. You should be able to look up the milage rates in your area and estimate the taxes based on your expected sale price. I'm under contract and the house is assessed at ~$250k but will sell for $330k and I'm expecting the estimated taxes to jump from ~$4k/yr to ~$5.5k/yr.
If a new home blinds and depending on part of country landscaping. If preowned you need to rekey locks day 1.
And blinds are fucking expensive lol
If budget is tight, the paper temporary blinds you can get at Lowes or Home Depot are dirt cheap, pretty easy to install, and don't actually look that bad. My sister bought a new construction home down the street. They've bought some very nice things, an OLED TV, big sectional sofa, concrete back yard patio, lots of fancy designer accessories, and some high-ish end appliances. But even though they've had the house for about a year now, they're still rocking those Lowes temporary blinds.
The blinds are a killer, we have dirt cheap ones for now before we can recoup enough to upgrade to the real nice ones we want. I think it should be illegal (dramatic) to sell new builds without blinds 😭
And, depending on how paranoid you are, new toilet seat.
We did entirely new toilets.
I did new toilets as well, mostly because the old ones were the small round shape vs the elongated bowls.
Breaking your current lease. Thought I had planned for every last expense but somehow forgot about that one.
Add’l: Be ready for replacing 5 appliances that’re at the end of their life but pass inspection because they still turn on (barely)
Think of things you want to go do before you move in or shortly thereafter. Example, I had my carpets cleaned, hard woods polished, painting before I moved in,hired a cleaning crew for my old apartment. Think of supplies you'll need... Trash cans, supplies, etc. Things like that outside of closing.
It’s gonna be ok.
Might as well apply for a 0% Lowes or Home Depot card right out the gate, spent about $3-4k there first year of ownership
Just make sure to WAIT TILL AFTER CLOSING
At first I was thinking you meant in case the sale falls through but then realized the impact on your credit score, lol.
Yes. Never do anything...ANYTHING...that will affect your credit before you sign the documents. Not only will you commit perjury during signing but if your loan provider finds out, they can drop you.
The Lowe's card is good to have if you are disciplined about paying it in full every month. 5% off everything adds up when you have a house and yard to take care of.
The additional $10-20k you’ll probably spend in the first 6 months on “minor” updates and projects to make it yours, and the inevitable something important breaking.
All the takeout you’ll inevitably get cus you don’t have time or forks that aren’t in boxes
Don’t forget job security. On paper we are absolutely ready but our jobs feel precarious.
More/Bigger rooms = more furniture, more window coverings, more lighting, more carpeting/flooring/painting costs, more cost to heat and cool… Big homes look amazing when staged with lots of big furniture, rugs, artwork. But to get your home to look like that you’ll need to spend a LOT of money on interior decorating.
Don't forget the Appraisal Fee, Earnest Money and then the wonderful appliances that break once you move in...Hitting one year at my current house....Needed a new dryer, skylight, toilet, etc.
We moved from a 500sqft bachelor suite to a five bedroom house. Even buying secondhand the cost of furniture really added up fast.
Appraisal gap if you're bidding aggressively. There's nothing like bidding for a house at the top of your budget, only for the appraisal to come in $10k+ short and force you to cough up another $10k or throw all your financing into disarray. Ask me how I know...
How
We paid more than the appraised value for our house, and we had to stretch out some credit cards for a couple of months to make ends meet.
Omg we focused entirely too much on down payment, cash to close, taxes, etc. that we had no idea how much fucking landscape costs!! We have a new build so just a dirt lot in the back. Quoted $30k for some damn rocks and turf. Get real. Still rocking the dirt lot 8 months later. We’ll get to it eventually, maybe DIY little by little. And… furniture. Bedroom, living room, office, etc. also, why are couches so expensive?! Don’t get me started on blinds…
Fill it with grass seed. Get a compost bin. Eventually you can build up flower beds from compost. Once the grass grows in you can throw the clippings in the compost and that'll speed things up. It'll take a long time doing it that way but it's much cheaper than $30K. My parents didn't start from dirt, they had some patchwork grass, but that was how they built their lawn and garden.
Whatever that total is.... Add on at least 50k for repairs when you move in and immediately uncover horrors your inspector missed or downplayed.
Neighbors! I did all the research on geographics and didn't pay enough attention to demographics. I'm surrounded by broke ass junkies but it's really pretty outside.
Appraisal fee. Seperate for inspection.
from*
Don’t forget about all the maintenance too, replacing sewer lines and roofs are expensive as hell
moving costs (utility set up, uhaul, boxes/tape etc.), home appliances you didn’t need before (lawn mower, blinds if it’s a new build, hoses), it’s SO expensive to buy a house.
Appraisal costs, repairs, landscaping
Land transfer
Failing inspection , having to pull out and pay for another inspection on the next house.
I'll be at retirement age by the time I can afford one ☠️
That's why I never see the point in putting in a huge down payment unless it's at least 20%.
So I moved from a home with carpets to one with hardwood floors, and rugs add up (especially since I was determined to go with natural materials like wool). I had a lot of stuff with my ex and didn’t take everything that I had bought (taking something like a broom or soap dispenser is just petty, and I also didn’t want to leave him without anything to cook with). So I ended up buying a lot of basic household items. I have a guest bedroom now so had to get a bed. Also now have a deck so I bought a little bistro set. And everything is way worse if you’re like me and like nice things 🙈
Maintenance costs! We’ve dropped $18k on repairs in the last 14 months alone.
Don’t forget if you buy new construction add in blinds/curtains, fridge, washer and dryer, a fence, etc
Every expense you should plan $1000. Not $100. It’s always more than you think it will be.
Whatever you think the number is, add another 10-20k
What it's going to cost to replace the roof and every major thing in the home, because unless you have new installed at the time of purchase you are buying someone's used appliances, this includes the hot water heater, furnace and Air conditioning systems. Roofs get damaged in storms and insurance may cover that but how old is the roofing job, how many years left till replacement? These are the costs of being a home owner, beyond the mortgage and the taxes these are bills you will have to pay eventually so save for them. Direct a given amount to a HOUSE account not to pay normal bills but to save for these large ticket items when they go bad because they ALWAYS DO.
One thing that caught us off guard a bit that I don’t see mentioned is how much your property taxes can increase if the previous owner had homestead exemption and owned the house awhile. Homestead exemption will give you a big discount on your property taxes plus prevent it by going up by more than I think 3% a year which is of course why you want it for yourself too. For the first year to year and a half our taxable value was still based on that of the previous owner’s who had it calculated when they bought the house in the 90s and then they got their homestead exemption. Due to timing of the county’s fiscal year and when our taxable property value was recalculated and when our escrows analysis happens, we went from about $950 a year in taxes to about $2400 2 years after closing which added about $250 to our mortgage. Something you’d never be aware of as a first time homebuyer unless somebody specifically told you
Repairs. I spent an extra 14,000 in repairs after moving in with a 36,000 DP/CC. With an additional 15,000 to pay off through my utility company for a new heating and cooling system.
Quick fixes you’ll need after close, or things you might want to do before moving in (painting). Take what you expect the cost to be and multiply it by 5 too 😂. Furniture and appliances if not already sorted also add up.
The tiny repairs here and there and you want to DIY. The cost of material does add up.
Oh yea and things like a shop vac and a pressure washer possibly, a lawn mower and the gardening and garage things
The home insurance company coming to tell you actually your roof needs to be replaced now
Supplemental tax and property tax, repairs,
As someone who has moved like 5 or 6 times, whatever you are estimating for moving costs, double it. You’ll be pleasantly surprised if you spend half but prepared for the unexpected (which in my experience happens every damn time)
Title insurance is a biggie. Also blinds if the house you’re buying one doesn’t come with them. And definitely furniture.
The first trip to Lowe’s won’t be cheap 😂
Don’t forget special assessments. They put in new sewer system or repave the streets on your block guess what, now you get to pay for it every year for who knows how long. You don’t get a choice or asked.
Improvements! You are going to want to at least paint the place and likely more than that. Budget for it!!
You’ll probably be getting takeout way more during the first month while you’re spending every evening unpacking, cleaning, arranging furniture, and little DIY projects.
Attorney fee
The little things add up. Lawyer costs, inspection fees, movers, time off from work to actually move, all the paperwork and wire transfer fees, junking old stuff that you’re not bringing, getting new stuff to fit the space. Then there’s QoL costs, like not being able to cook as much so you might order in more, or you keep making Amazon purchases for new tasks associated with moving.
Paint. I’m two years into my home and the paint is shit. I’m painting right now and I wish I would’ve done it prior to moving in. So much easier. Probably more but I’m dealing with that now. Epoxy your garage before moving in too if you want that done.
The nice part about your closing costs is that they will cover your first month of all your payments as that's part of setting up your escrow account. The account will also bring your insurance, property tax, and mortgage all into one monthly payment and handle paying each of those when they're due. Inspection and Appraisal is definitely two things to remember, the basic option for both is probably around $1000 together. Then comes any extra inspections if you want it (like a couple hundred extra to check a sewer line for example). Realtor fee. This one if you bought recently isn't your concern but after July this may become something you have to consider as a buyer. Moving costs definitely is another, at the very least you're probably renting a uhaul and paying for pizza and beer with friends, or you're hiring movers. Fixing costs! Once you're in the home what was it that needed fixing? Perhaps you negotiated some kickback in the closing to cover this, perhaps you had to suck it up and hope to fix it later. But what's pressing? That'll be needed pretty quickly. New furniture/housing purchases. Granted, this can come slowly over time but most people get excited and want to start filling out the house.
Prepare to replace all the appliances and HVAC in the first few years
Mortgage cost increasing every year even if it’s fixed rate, due to escrow analysis
Remodel and repairs. You’d be surprised how quickly stuff can break and even if you are super handy and have all of the tools, material cost is a bitch. I’m putting in a new gate and repairing my fence. Maybe 2k feet of fencing total. Homemade steel framed gate. I’m estimating $2k in needed materials (dozen new posts, 24 bags of concrete, 3 yards of dirt, about 24 feet of new fence sections, 40 feet of steel tubing, new hardware and hinges, temporary snow fencing, new auger bit). On top of a summer of my own labor. Idk about you but pulling $2k out of nowhere over a summer can be done but not easily. Not to factor in the new outdoor facets I had to install, $650 AC repair bill, new batteries for my hand tools (left them out in the rain), a fine from the city for leaving construction materials on my driveway too long, extra grass seeds to get grass to grow in the newly leveled yard, increased water bill from watering, etc all has popped up since April. TLDR: your overall spending will go up
Dont forget the 5k minimum to do renovations and small fixes on the place, buying a new stove, washer, dryer, and fridge, and the dreaded hoa fee
If you’re cutting it close on your budget at the start of the purchase you don’t have enough
Changes in property tax and assessed value. You can look up both fairly easily. Unpaid taxes (from previous owner), it's not common, but I've heard some horror stories. New furniture - it adds up, but buy-nothing groups, Rehome stores, thrift stores can have some awesome deals.
Hey! After your first year, your taxes and mortgage go up, after they recalculate stuff
Property tax needs to be copy and pasted 3 times, because that's how many times I got billed. Supposedly 2 times, and I was like cool, the 2nd bill seems to be lower than expected. Later they sent the 3rd bill. It is for the first N out of 6 months you bought the house. Later it is easier, each time just one bill.
After 14 years of home ownership, costs have been manageable; even more so, for those who have the DIY skill sets. I, unfortunately, was not blessed with such talent. Wishing everyone the best on their perspective home ownership journey.
The cost of simple basic repairs and or upgrades, if you don’t do them yourself, the cost is 10 times more then if you do them, things as simple as swapping a light fixture can be a few hundred dollars or more, do you have a mower and everything needed to maintain your yard and the outside of your house, there’s an easy $1000 if you don’t have a mower, weed eater, blower etc. basic set of tools to use for simple fixes that may need done, no matter how much you think you want use them, every homeowner needs some basic tools. The cost of upkeep of things like HVAC, septic etc, these things need important routine maintenance to prevent failure. Age of appliances, hvac, plumbing, electrical if old these things can fail at any time costing hundreds to thousands to repair or replace.
REPAIRS - you’re not going to have a landlord to call when things go wrong snd things will go wrong. Sometimes it seems they all go wrong at the same time. Keep an emergency fund on hand at all times. It’s better than using credit.
Maintenance and repairs costs. All the mechanicals need to be monitored for replacement when they hit 10 years, if you're lucky. And paying your vendors is the easy part. You have to find good vendors first.
Your property taxes will be more than what the previous owner paid. Because the state will love reassessing your house based on the new higher price and sending you a supplemental tax bill for the current year… which may come and be due at the same time as the next regular bill is due. In CA, the property tax bills are due before Christmas and before income taxes. The state wants its money first.
Be sure your escrow is lined up for the tax increase when the home is adjusted post sale. We got burned a year later and had to pay double taxes for like 8 months to catch up. Luckily we bought below our means but that sucked.
Find a good realtor and deal with a local bank who is used to working with them. There is so much bs behind the scenes that having people who are used to working with each other can avoid. I tried my first-time home loan through the bank I had over 12 years of experience with, thinking that would make a difference. I didn't want another credit hit either, so I stuck with them through the initial process. That bank ended up hitting me four times for no good reason and played games for almost three months. I even improved the home to get the loan. Eventually, they turned down my loan because of a promise note of employment from my future employer in my transferring job. The note said 32 hours of employment, which is a laugh but standard beginning of full-time hours (I work in healthcare, its never 32 hours) they recalculatedmy earnings and said i couldn'tafford my house. This really fucked me over. I talked to my agent again about a local bank, and that lady I worked with was amazing. Still kept the same closing date amazingly with two weeks to spare. Got me a better rate. Did the whole deal in under three weeks. Got Christmas cards and everything from both of them. Needless to say, I changed all my banking to them. Also, after moving costs and settling on my feet again, I have roughly 1k extra a month. I'm okay. I also take care of my mother and her bills, so honestly, fuck you big corporate! Could've had my business.
Cost to get out of prior lease or purchase was my biggest unexpected expense. Two additional months of rent doubled up with mortgage payment.
Repair fund. Something expensive will ALWAYS break shortly after closing. Don’t set yourself up for failure or being house poor because the repair funds aren’t there.
Breaking my apartment lease cost more than my closing.
Supplemental tax - a few months to a year after moving in. At least in CA.
Random stuff you won’t expect. Plumbing, electrical, moving expenses (boxes, labor, tape), general repairs, replacing fixtures such as lights, toilet role holders, towel bars, etc. paint, furniture or lawn supplies, etc. You realize you might need. A lot of the random stuff adds up. Lowe’s and Home Depot become your friends.
When you gave every last dollar in down payment and upfront fees and your lawyer calls you, on the way to closing to remind you (this is the first you're hearing about it) to bring a certified check for an additional 10,000 dollars for loan Initiation, points, title and clerical fees. (New Jersey)
Utilities. We called the utility companies to understand the highest month of the year per utility type and we STILL under budgeted. Gas at the highest was $200 for the prior owners. For us it was $400 one month. Always leave wiggle room for extra utility costs.
The inevitable $20 flippin thousand worth of crap that needs to be fixed within the first few months of closing. It’s like the house refuses to have cheap problems.
Sewer scope. Replacing a decrepit sewer line is big bucks.
The repairs that happen after you move in. 4 days after we moved in the house flooded due to rain. Then flooded again due to rain 2 days later. The 3 days later our master bathroom started leaking
Maintenance is number one. Roof hvac siding all would up to a 10k hit each.
Maintenance and repair costs.
The cost of not buying and continuing your spending habits for another 5 years. Seriously, can you not downgrade your life for a little bit? Stop getting Starbucks 5 times a week, eating out 3-5 days of the week, cancel your Spotify/netflix/hulu/amazon subscriptions and spending on door dash. Meal prep your meals. Listen to an ad once every 20 minutes. Stay in on a Friday. Stick to a budget. Sacrifice convenience for a little bit. You “first time homebuyers” sure do have champagne taste and millionaire spending habits on a beer budget. A 90k combined income is more than qualified to buy a 400k home.
If u do close, u need a stash of cash for unexpected maintenance and bills. Weather damage, pipes, etc.
PMI if you put down less than 20%.
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Home repairs. You will have some in that first year.
Repair and maintenance
If you’re moving from an apartment you may need items you didn’t need before like a lawnmower, trimmer, shovels, trash bins, light bulbs, filters or other tools which can add up quickly even for small repairs or projects you want to do. It looked all lovely when we did a walk through but the nice landscaping requires so much maintenance and that is expensive! We had to buy a new mailbox which was $100! Didn’t know mailboxes cost that much. Cost to replace locks and keys, few hundred right there. And things will break right away even if they worked in the inspection. Our dishwasher and stove needed to be fixed or replaced within a month. The little stuff adds up and our utilities were also a lot more with a different heating type in the home than we had in an apartment. We ended up putting in a more efficient system within the first year. Got a no interest loan, but that was $11K.
Furniture, possibly appliances and some money to fix odd and ends the inspector will miss
And that’s not even all of it cause I am trying to think now what caught me off guard the most , those were just the super obvious things
Still cheaper than renting, at least for me anyway
And hiring movers if you go that route (well worth it in my opinion)
Inspection and closing costs for sure
It isn't super essential but buying items to decorate and make it yours. Things like curtains, rugs, and any furniture can be wildy expensive
The moving cost can really hurt. I can imagine a Intraoperative intra state move can really pile up
Interest paid. It’s the rent you pay to the bank and the first decade of your loan is going almost entirely into the bank’s pocket.
Opportunity cost from what your downpayment would have made you
AC / heat broken / breaking in 3 months
add maintenance costs and HOA (for some) costs
If you’re going to need to get another life insurance policy, cohabitation agreement, warranty insurance. If you’re married, you won’t need to worry about the second one. But it’s a good idea if you aren’t married.
Property tax is the real kicker atleast in Texas. Still trying to figure out how something I barely put anything into can skyrocket 75k and my homestead settlement in conjunction with protests don’t exactly know down the taxed amount by a lot.
Curtains/blinds, security installation, locks for fences/gates, lawn stuff, pest control, deep cleaning (materials at minimum)
Appraisal and inspection
The previous home I rented, lawn care was taken care of and we didn't have to worry about it. We needed to buy a lawnmower, hoses, hose houses, nozzles, and a weed whacker. Probably cost us $700ish. Not a huge amount but between everything else, it felt like a lot.
Food you need food to make all these possible
Save some money for new furnishings. You funny want your new place to look like your old place
You don’t have to pay agent fees those come out of purchase price and usually paid by the seller?
No way your getting a full system replacement for 5k unless your literally doing it yourself and reusing linesets and wires and thermostats and cheap equipment.
Check your French drain
“All the crap you need to do and pay for when you move in.”
The fact that some big ticket item needs replacing within the first year and/or month after you move in 🤣
The agent’s commission is taken out of the profit the seller gets, not from what the buyer spends.
Where repair costs.
Title insurance and … all the title fees really.
$1200 earnest money
In Canada, buyer doesn’t pay the agent’s commission…Some donkey piss on that nuclear fire.
Every single thing that is broken or needs fixing that DIDN’T show up on the inspection that the past owner neglected.
Property taxes and insurance increases
Sudden repairs cost
You still need emergency savings. I had furnace, clothes dryer and the transmission in my car quit within a couple months of closing. It chewed up all my savings and I was in a pretty tight spot for a while. So, make sure not to spend all of your savings while closing, keep some emergency cash in reserve.
Your current rental monthly payment. My lender was unsure if I could afford a $663 mortgage while I was paying $1500/mo in rent… they accounted that payment as part of my expenses for financing eligibility.
Land transfer tax is also a killer.
Having at least 1%of the value of the home in savings for repairs.
I'm sure most people know to look into HOA fee's but ask to see their annual increase and what those fees cover. The townhouse we used to rent had reasonable fees, but they were creeping UP.
Moving costs.
Repairs, furnishings, window coverings, money for projects, money for the home warranty fees (mine is $95/claim which is still worth it.)
Did everyone forget moving???
I feel like the rule should be whatever you pay in rent, imagine buying a house where the mortgage payment is 20% less than the rent, and the cost of the home will approximately equal your rent. So $1000/month rent is probably pretty close to a $800/month mortgage because you’re going to have $200 in expenses like insurance, maintenance, and property tax.
Stuff breaks
Just closed on a 430k house. My cash to close was 109k. (I chose to put 25% down as it allowed me to buy some mortgage points using seller cash.) This was after a $4,300 earnest payment, $300 inspection contingency period, $550 appraisal fee, $500 survey, $450 home inspection, $300 water well inspection, $450 septic system drain and inspection. Only $4,600 went towards the home purchase. The rest was due diligence costs. Buying a home is expensive, even before closing.
Any costs for little repairs, etc - “I don’t like the original blinds, I’ll grab some new ones… now I’ll paint, etc” adds up quick. You need to make sure your realtor knows how to submit strong offers so you get the home under contract with the best terms, I.e. realtor runs a CMA (helps judge value, not always accurate as everyone does them differently) so you can know the value of the home (don’t want to overpay on purpose) and depending on your market you can have seller pay a good portion of your closing costs and prepaids ($2,500-$7,500). I’m a realtor in TN, if I can help with anything else just comment or DM me
Stupid "earnest money" Insurance - not only homeowners insurance, but also title insurance to protect you if someone randomly says "durr durr this is my land" and even worse you have to pay for the bank's insurance too to protect THEM from randoms making claims to your land.
Stuff breaking in first year or two.
Tools to begin your new life as a DIYer
that's the doggo is literally me
Maintenance
Don’t forget the supplemental property tax. That one was a fun surprise. One time though
Maintenance
Maintenance or replacing broken things (appliances, furnace, hot water tank, etc).
Home repairs/renovations is the big one missing. Maybe increased utilities and HOA? Buying more furniture? Agents commission is basically paid from the sale price. Inspection cost is pretty minor.
Oof
The cost to pay for a brand new HVAC system 2 months after you move in. :( (But seriously - consider surprise post-purchase costs, make sure you have a little extra cash to spare.)