Purchasing a home? It’s easy to find the list price. Maybe you can even guess your homeowner’s insurance and estimate your closing costs, but what will purchasing a home actually cost you.
Think of it like a big purchase you’ve likely already made: buying a car. The car may have the dealer’s price tag on it, but it will cost money to get the car, own it and keep it in good condition. Gas, oil changes, car washes, maybe custom car mats to keep the carpets clean. Repairs will come along over time or maybe you will want to upgrade your audio system. You’ll need to pay taxes and dealer fees before you drive it off the lot. All of these supplemental costs add up and the real cost of owning the car looks a lot different than that original price tag.
At Corken + Company, we urge you to still buy that dream car or in our case your dream home, but do so as an informed buyer with our experienced team of agents. We can help you navigate the process and prepare for the hidden costs of homeownership. Here is a list from REcolorado to get you started….
This can be one of the most intimidating and dreaded parts of the home buying process. Once you’ve found and gone under contract on your perfect home, you don’t want to find out it needs some possibly expensive repairs. But, that is what makes this step so essential. On average, a home inspection costs $300-$500 but it has the potential to uncover problems that could end up costing you thousands in the future. The peace of mind alone is worth the investment. Keep in mind, a home inspection that uncovers issues doesn’t mean you always walk away from the sale. In fact, it could give you negotiating power or at the very least it helps you plan ahead for repairs you know are coming.
Home insurance is essential and while it costs money, again it protects against possibly expensive future problems. As not all insurance policies are created equal, understanding your policy and its coverage is crucial. The policy with the cheapest premium isn’t always the best option. Have a well-rounded comprehension of all of the costs associated with your policy should catastrophe strike.
This means internet/cable, trash, water, electricity. Consider the size of your property proportionate to these bills. It will cost more to heat or cool a larger home.
Your home may not be move in ready. If there are specific upgrades or changes that will need to happen right away include those in your budget. You can research the average costs of similar projects to make your calculations. Weigh this against your timeline and the effort you are willing to put in. Maybe certain projects can wait for a year or more and in that case don’t need to necessarily be accounted for in your initial purchase price. We recommend still researching the costs of these projects so you can plan ahead. And finally remember that renovations, while indeed cost money, can also cost you time. It takes effort and patience by your entire family to live through renovations both big and small. Lori, our lead broker and founder of Corken + Company, always stresses the three main considerations to make when pondering a renovation: money, time, and effort.
How old is your potential home? What condition is it in? Has it been well taken care of? The answer to these questions should be easy enough to find and will help you gauge what sorts of repairs your home may need and when. Older homes usually cost more in maintenance. Your home inspection should also give you good insight into estimating this financial aspect of purchasing your home.
There is maneuvering you can do in your down payment to help you put your saved funds towards your priorities. If it’s important to have cash flow for immediate renovations, you may be able to consider putting less money down. If it’s important to avoid PMI and have a lower monthly payment ,than a larger down payment will be necessary. No matter the price of your home, having a robust savings for cushion is always a good idea.
Closing costs usually range from 3-6% of the home’s purchase price and include miscellaneous fees attached to purchasing a home: lender fees, loan origination cost, title insurance, taxes, etc.
Corken + Company with our extensive experience in homebuying can help you understand and estimate all of the costs of purchasing a home. We have real estate solutions without limits and, with prudence, will help you reach the point at which your financial, personal, and real estate goals intersect.