11 Unexpected Expenses of New Home Ownership
Even with the assistance of real estate agents, brokers, and attorneys, it can be difficult to anticipate all the expenses that can come with owning a new house. If you’re in the market for a property and think you have your budget in order, you might want to double-check your accounting: These 11 costs can take a lot of new homeowners by surprise.
1. NEW LOCKS
It’s not likely the old owners will decide to squat in your new living quarters, but changing the locks does minimize the chance of unwanted entry by people (contractors, relatives) who have gotten copies made in the past. You may also want an upgrade from whatever simple door hardware is installed. If your new home has several entry doors, that can add up to hundreds of dollars.
2. MOVING EXPENSES
While buyers take cross-country relocations into consideration when planning a move, even heading across town can be an expensive proposition. Renting moving vans, buying packing material, or hiring professionals to do the deed for you should all be part of your budget.
3. PROPERTY TAX INCREASES
Smart homebuyers know that a mortgage payment calculator needs to include both loan amounts and property taxes, which are sometimes paid separately but often amortized over the year into smaller monthly payments. While your initial budget might include estimated taxes for the prior year, those amounts can—and often do—go up over time. Make sure you’re accounting for increases in school and county taxes.
4. PROPERTY FINES
Move into a community with a homeowners association governing the rules of residency and you’re likely to enjoy your neighborhood’s immaculate landscaping—but if you don’t abide by the rules of waste disposal and lawn maintenance, you could wind up getting fined.
Few people outside of practical jokers from the 1950s ask if someone’s refrigerator is running. As a result, some new homeowners find that the appliances that were polished and cleaned for an inspection may not keep food cold or cook your dinner evenly. Expect to repair or replace at least one major fixture owing to age or malfunction before long.
6. HAZARD INSURANCE
Many people choose to protect their home with homeowners insurance, but not everyone considers coverage for catastrophic events like floods or earthquakes that might not be covered by their policy. Check with your insurance agent about any gaps in your policy that could prove costly later.
7. STORAGE FEES
Moving into a cozier space than your current living situation? Unless you plan on parting with some of your belongings, you’ll need to consider renting a storage unit.
8. UTILITY AND SERVICE CONNECTION OR TRANSFER FEES
Some cable and utility companies charge fees for new installations or relocation requests; if you didn’t plan on taking a service with you and then change your mind, there’ll be a bill for reactivation. Make sure you know what it’ll cost to have the lights on in time, and remember that renters don’t typically need to worry about waste or water bills—but homeowners do.
9. YOUR LAST LEASE OR MORTGAGE PAYMENT
One surefire way to double your expenses for a month: owing a rent or mortgage payment on your current property at the same time you’re due to pay first month’s expenses for the new one. While this can’t always be avoided, try to time the expiration of your current agreements so they don’t overlap your new obligations. If you’re renting, some landlords might accept a premature lease termination as long as they can find a new tenant and not lose any money.
10. PEST CONTROL
Not all home inspections monitor for infestations and not all sellers will be eager to tell you about possible insect co-habitants. Even if you do get a property screened, a change in seasons—colder weather means mice looking for warmth, for example—can mean new occupants. Don’t be surprised if you need to call an exterminator.
11. CLOSING COSTS
Think this would be the last thing that could surprise you? Think again. While lenders can offer good-faith estimates for things like appraisals, title insurance, and other fees, they’re under no legal obligation to eat the difference if they’re off: Closing costs can increase by up to 10 percent by the time the deal is done, which could mean anywhere from $400 to $1000 in unexpected, out-of-pocket charges.