First-Time Homebuyers: Plan For Hidden Costs
It can be pretty exciting to decide to buy your first home. However, things can get overwhelming when you aren't prepared for the unexpected. Sure, you can find a charming house in a great neighborhood for what appears to be the perfect price. Yet, when you start digging deeper, you can sometimes find yourself barely staying afloat financially due to hidden costs. Therefore, it is important that you are aware of certain hidden costs so that you head into the home-buying process well-equipped.
As a general rule, you expect to pay closing costs, homeowners' insurance, etc. However, one thing that you may not expect to pay for is appliances. When the previous owners of the home move out, you don't know whether they are going to take the refrigerator, stove, and other appliances or not. If you were renting prior to buying, then you don't have your own appliances to bring with you. This means you will be out money to replace them if they do take them. Initially, this may not seem like a big deal. However, these appliances will add up. This is particularly true if the bulk of your cash fund was used to pay your down payment.
You will also need to pay for any immediate home improvements that need to be made. Hopefully, you did not waive the home inspection, and these improvements are not "unexpected".
When you are buying a home, you probably aren't thinking about the things that you will need/want after you move in, such as cable. However, if you typically have cable, you will want to consider whether your home is currently wired for such a luxury. In addition, if you have been renting, your home will likely be more expensive in terms of utility bills. Further, you will likely find yourself paying for additional utilities that your landlord once covered, such as garbage and water.
Research and Plan
To ensure that you are fully prepared for the unexpected and unknown costs that are head, you simply need to research and plan before and throughout your house hunting experience. If you want to look for a fixer-upper, make sure that you take the time to research how much it will take to make those improvements. You don't want to assume that the improvements will only take a few hundred bucks only to realize later that it will take a few thousand. Proper budgeting for as many costs as possible will be key throughout the home-buying process.
For more information on how to search for real estate, contact your local realtor.