Buying a house is never a cheap practice. Not only the price of the house is an expense you have to pay but other factors like realtor’s fees and moving in also keeps your expenses. These costs are usually hidden from the buyer until they come across them. Here a few of the commonly overlooked costs when buying a house.
Hiring a Buyer’s Agent
You want to buy a house and you have no idea where to look. Hiring a buyer’s agent is what most people tend to do in these circumstances. This does increase the chances of finding the best house required according to your needs, but the realtor does incur some fees. The fee may vary according to different realtors as some have fixed fee and others incur some percentage of your total house cost. In any case, the money is spent. Buyer’s agent is usually hired by those who are not familiar with the whole house buying procedures otherwise people who have bought houses at a good pace tend to look on their own minimizing this cost.
Insurance fees aren’t usually overlooked but more underestimated. Insurances have been proven to be helpful and you will need to sign a number of those if you choose to buy a new house. You will need to buy multiple insurances like homeowner’s insurance, title insurance, disaster insurance which can add up and cost you over a $1000 annually. When you are told about the monthly mortgages, you are most of the time not informed about the insurance fees that come along with it. The insurances rates may fluctuate depending on the area and your coverage.
Stamp duty is not applied in most of the countries but where it does, it adds up to the total costs. Stamp duty is incurred when you buy a house that is over $125,000. The price may vary according to the price of your house. You won’t have to pay anything for the first $125,000 but will incur 2% on the next $125,000.
Closing costs include all of the fees that are needed to be paid when the deal is done. When you have decided upon a house and your proposed offer is accepted, the buyer’s agent will tell you all the necessary expenses to be paid including the actual price of the house. The others may include insurances, recording fees, surveys, notary fees, government filing or escrow fees, interests and appraisals. These all can add up to thousands of dollars other than the actual house price.
- Earnest Money
An amount of money is to be paid upfront to ensure that you are serious in buying the house. The realtor will most likely ask for an ensuring amount so that he knows that the deal is on. This fee is to avoid people who offer a satisfying amount of money only to get the sellers riled up by leaving and buying another house. This is like depository money which you will most likely get back or it will go in the closing cost. If the deal is off from your side then the money won’t be returned to you.
- Inspector’s Fee
Thorough inspections are to be made before you close the deal on a house. Inspections are important as there can be many faults in the house. A general inspection doesn’t include sewer and bug inspection which you will have to schedule differently. These inspections can add up to a few hundred bucks, but they are very important. If there are multiple faults and the house is not maintained properly, you can renegotiate the price or pull out of the deal depending upon your choice.
- Utility Bills
You have successfully closed the deal, paid the taxes and you have moved in (which also incurs its cost) and now you are ready to start anew but now you have to set up a phone line, television services, broadband connection and worry for the utility bills like water, electricity and sewer taxes. These bills don’t go away no matter where you move.
Most of the times realtor won’t tell you these hidden costs up front because they may think that you may not like the expenses but here are the untold expenses you must consider.