We can all agree that buying a home is one of the most exciting life events. You and your family will be turning a new leaf in your new dream home, what can be better than that? However, buying a home is not all fun and games. There are plenty of problems that can occur along the way. And, even worse, there are plenty of hidden costs that can occur along the way.
We are all afraid of those hidden costs – they make us shiver when we think about them. But, they are there. Thus, it is better to prepare for them on time. That way, when those costs occur, you will know exactly what to do, and hopefully, you will have some money on the side to cover them.
If you want to know what are some of the most common hidden costs of buying a home in DC, you are in the right place. Keep on reading to find out more.
Taxes
Property taxes are something all homeowners have to pay for. But, what amateur home buyers do not know is that, sometimes, these property taxes are hidden in the mortgage rate that you pay each month. However, in some cases, you do not pay for property taxes at the end of the month, but you get a substantial bill at the end of the year. Many first-time homebuyers get unpleasantly surprised when this happens, so be sure to do some digging before you buy a home.
The price of property taxes varies depending on the location. In some places, they are relatively small, but in others, they are huge. Either way, you have to make room for them in your budget!
Closing Costs
One can easily say that closing costs are everything but hidden. However, if this is your first time buying a home in DC, or pretty much anywhere else in the world, be prepared for the fact that closing costs come with a dozen other costs as well. For instance, when closing the deal, you will have to pay for the following:
- Inspection
- Real Estate Agent’s fee
- Lawyer’s fee
- Appraisal’s fee
- Documentation
- Mortgage applications
- Home warranty
Depending on your situation, there may be some more or less costs to consider. Unfortunately, now, it is a tough time for buyers in DC. But let that be your motivation to prepare yourself for anything that may cause you hidden costs and hidden problems.
Earnest Money
Many homebuyers have not even heard about the so-called earnest money. Earnest money is similar to the security deposit. Namely, it is what you put down upfront even before filling out all the paperwork. That is, the earnest money is used to show the seller that you are serious about buying the property. Of course, you will get that money back once you close the deal, but you still must have it upfront.
The amount of money you should save for this ‘occasion’, depends on the property you plan on buying. Your real estate agent can help you out with this one. Thus, whether you plan on investing in real estate property or just buying one for yourself, be sure to have a reliable real estate agent.
Insurance
Of course, once you buy the home from somebody, you will be the one responsible for paying insurance for that home. That is, you will have to pay the so-called homeowner’s insurance. And, just like property taxes, insurance too is something that will be included in your monthly mortgage rate.
The cost of insurance may go up and down and thus change your monthly rate. This depends on your coverage needs. It would be a good idea to talk to the previous owner about the insurance their home has so that you can know what to expect in the future.
Moving Costs
Buying a new home does not only come with purchase costs – it also comes with moving ones. And, if you are not careful enough, these moving costs will easily and quickly add up. Just to give you a clue, this is what you will have to pay for when moving into a new home: packing materials, moving equipment, moving truck, professional’s ‘hands’, moving insurance, etc.
If you want to cut the costs as much as possible, as well as save your time and energy, hiring a reliable moving company is the way to go! Just make sure to hire them ahead of time so that you can get some more moving discounts.
Utilities
Of course, once you find your new home and once you find someone adequate to help you move in, you will be expected to pay for all of the utilities that home possess. Usually, those utilities include things like electricity, water, sewer, gas, cable, internet, and your mobile phone.
But, have in mind that some sellers will expect you to pay the utilities from the current month, not just the future ones. Of course, utilities are not something that you should be worried about as they do not eat up the budget that much, but still, be prepared for this additional cost as well.
Repairs and Maintenance
Last but certainly not the least hidden cost to think about are all those costs of repairs and maintenance. First, if you buy a home that is in a ‘community’ area, you will be expected to pay for its maintenance. This maintenance usually includes taking care of the yard, pool, sidewalk, and any other amenities that are in close proximity to your home.
Of course, you will be the one responsible for doing big home renovations. However, if there are some crucial repairs that must be done on the home, you and your seller can meet halfway! Talk to your real estate agent about this before you sign the closing deal.
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