1. Getting Yourself From Here To There
Moving your family into a new home is one thing, but moving your family and all of your belongings is a whole different story.
Even if you don’t think you’re going that far, moving expenses for just relocating across town can cost more than you’d imagine. If you’re taking a leap to another state, you’re definitely going to want to create a moving budget beforehand.
If you’re moving in-town or from afar, you’ll need to consider the cost of:
- Movers
- Rental trucks
- Packaging supplies (boxes, bubble wrap, furniture pads, mattress bags)
- Large/heavy object moving supplies (dollies, lift levers, forklift)
- Self-storage units or portable storage units
If you’re moving from out of town or state, there are more costs to factor:
- Plane tickets, or fuel costs of continuous back and forth trips
- Pet transportation or boarding
- Luggage and shipping fees
- Temporary housing, if there’s a period between move dates
This helpful calculator can give you an idea of just how much we’re talking about.
2. Your Everyday Commuting Expenses
Even though this one is pretty self-explanatory, it’s an important thing to note.
You might have a good reason to move farther from work than you’d like—maybe you grew up there, maybe the school system is great, or maybe it’s close to the center of town.
Just realize that if you move farther away from somewhere you need to get on a regular basis, like work, your child’s school, or even the grocery store, commuting expenses will add up.
Whether that’s an increase in gas costs or a commuter rail pass, make sure you include any added commuting expenses to your new budget.
3. For The Deal To Be Sealed, There Will Be Closing Costs
The first thing you should know about closing costs is that they’re typically 2 to 5 percent of the purchase price of a home. So if your home costs $200,000, you’re looking at putting somewhere between $4,000 and $10,000 down.
Closing costs include fees that are owed to your lenders and third parties, which you usually pay at the time you close on your mortgage.
Some of these costs and fees include:
- Credit report fee
- Loan origination fee for processing loan paperwork
- Appraisal fee for verifying that the sale price is equal to or less than the fair market value
- Attorney fee for the preparation/recording of official documents
- Survey fee for verifying property lines (lot size/dimensions)
- Title service fees for the title search and title insurance
- Recording fee for a city or country to record the new land records
Educating yourself about the entirety of the costs that come with the home-buying process will empower you to proceed with confidence.
Pro Tip: It’s important to remember that often times you can get the seller to pay some or all of the closing costs, so make sure you negotiate appropriately.
4. Your Real Estate Agent’s Commission
It’s not always the case that both a seller’s agent and a buyer’s agent are included in the transaction but, if so, each will be paid by their brokerage. This means they’ll both get a commission.
Although it’s possible for the buyer to assume the costs of the commission, typically the seller pays. It all depends on what is agreed upon in the sale contract and what you negotiate.
If the commission comes out of the sale proceeds, the agent will receive a certain percentage of the price of the home. If a house sells for $300,000 and the commission is 5 percent, the net proceeds the seller makes will be $285,000.
Just remember that it’s possible you’ll have to assume some or all of the costs of an agent’s commission, so make sure you factor it into your budget just in case.
5. Protection For Your Home Sweet Home
Home insurance is one of those costs that’s worth every penny.
Just like you insure your health and your car, your home is a valuable asset to your life. A home insurance policy compensates you for losses to your home and your possessions inside it.
Since different companies offer different coverages, make sure you choose a policy with the right mix of coverages for your needs. A standard policy typically covers the damage to your home, structures on your property, and certain personal belongings inside your home caused by:
- Storms
- Fire
- Theft
- Vandalism
If someone gets injured on your property, you’re covered for that, too. But make sure you keep your property as safe as you can—if the mail carrier falls over a railing that’s dangerously short, you could be legally liable for the injury.
Damage from floods and earthquakes generally aren’t included in the basic coverages. Depending on where you live, you’ll have to budget in the cost of those as well. Also, be advised that not all of the personal belongings inside your home (like jewelry or fur) will be covered, either.
6. You Might Be Faced With HOA Fees
Buying a home doesn’t necessarily mean buying a house. You might be looking to purchase a condo, townhouse, or a home in a gated community. Here’s where joining a homeowners’ association (HOA) comes into play.
A homeowners’ association is an agreement made by the various owners of a building who are made equally responsible for maintaining the property they all live in. Everyone in the community pays a monthly fee to the association for the general upkeep and any renovations or repairs in common areas.
The terms of homeowners’ associations vary, but most fees range between $200 and $400 per month (and can be higher depending on how many amenities there are and how upscale the building is).
HOA fees include things like:
- Landscaping
- Swimming pools
- Tennis courts
- Elevators
- Security gates
- The exterior of the building
- The roof
- Sidewalks
- Garages
- Fitness rooms
Make sure you factor any of these fees into your budget if you’re looking to buy a home like this.
Pro Tip: Always ask how the HOA fee increases are set, for a printed history of the past HOA dues so you can look at trends, and exactly what these fees will cover in your particular community.
7. You’ll Have To Pay To Get Your Home Inspected
You don’t want to skimp on this one. When you rent a place, you might check it upon move-in to make sure all the appliances are working correctly and that there’s not any dings in the paint or holes in the wall, but when you’re buying, there’s a whole lot more to look out for.
Although your mortgage lender may not require a home inspection, keep in mind that paying for this service could actually save you a lot of money down the line if a problem you didn’t originally know about gets worse.
If the inspection comes back clean with little to no problems, then you bought yourself some worthy peace of mind. But if issues are discovered, it’ll help you to bargain with the seller appropriately to see if they’ll fix the damages or lower the asking price.
Do your research on home inspectors in the area, and remember that past experience and good reviews are important. Make sure you establish a good relationship with your inspector, and double-check on big things like pipe leaks, mold, or asbestos.
Try this chart to compare the average rates in your area so you can budget for one that you can afford.
8. There Will Probably Be Some Maintenance Upon Move-In
It’s important to keep in mind that many elements of the home-buying process are negotiable, and repairs are certainly included in that category.
After you get a home inspection, you might find that a number of things aren’t working up to their potential and need to be either repaired or replaced.
This involves a long list of possible issues, from the big things like plumbing leaks, basement water sealing, and window replacements, to smaller issues like carpet cleaning, floor buffing, or wall patches from holes or dings.
In many cases, you can request for the seller to repair any problems form the inspection before move-in. You could also ask them for a lesser credit to get it repaired by someone you hire yourself so you can make sure it’s done right and how you want it.
However, it’s important to remember that the buyer doesn’t always get what they want. The seller can deem the repairs too minor to pay for himself, or simply refuse to pay for the cost of the repairs. In this case, it’s up to you to come up with the money if you really want the home to be brought up to your standards (or in some cases, even be safe enough to live in), since there could be other offers on the table.
9. Your Property Taxes
No matter where you live in America, you have to pay property taxes to your state (and city or county, depending on where you live).
You pay property tax on a certain percentage of your home’s appraised value. Try using this calculator to estimate your property tax. Luckily for homeowners, property taxes are deductible.
10. Everything From Light, To Warmth, To Entertainment
If you’re moving from a smaller home or from a rental, make sure you budget for a likely increase in the cost of your utilities.
Some utilities to account for are:
- Internet and cable
- Electricity
- Gas and water
- Heating and cooling systems
Another thing to be aware of is the appliances that may be included in your new home. If the appliances left by the previous owner are older, they might end up incurring higher costs than buying new, energy-efficient ones.
11. The Most Fun Part Of All—New Stuff!
You might realize that some of the furniture or appliances you had at your old place won’t make the cut for your new home. Or, you might be moving into a home that’s much bigger or smaller than your current place, and need to purchase new things as a result.
Sizing up and filling your new home how you want it is definitely fun, but also something you want to set aside some cash for.
Take some time to figure out which of your belongings you’ll be bringing with you, like your bedroom set for example, and which ones you’ll need to take a trip to the store for, like new living room furniture.
You can write a list and go room by room to help you figure out potential new buys. Budgeting for this (and even including things like rugs, curtains, door knobs, and decor) will help you get an idea on how much you’ll need to save for these expenses before moving in.
