Buying real estate can be the most exciting adventure of your life. Whether it’s your first home or your forever home, it’s important to understand that this is an incredibly huge investment. Long after you negotiate a price and sign contracts, you’ll be stressed out to learn that the bills and expenses can quickly pile up.
However, as they say, knowledge is power. If you have a heads up regarding what expenses can come your way, you can plan ahead and be ready to write the check. Here are some “hidden expenses” involved in real estate transaction. We say “hidden” because they aren’t unexpected, but they are less obvious to the inexperienced real estate buyer.
You’ll Need a Home Appraisal: The bank won’t take just anyone’s word for it when it comes to the value of the house you are buying. An appraisal will cost around $350 (give or take). If you want to get a mortgage, the bank will require this appraisal.
Get the Home Inspected: This is a gift you give to yourself. It’s not mandatory, but you get exactly what you pay for in life. That being said, pay for a good, exhaustive home inspection. Make sure they check for termites and other critters, water damage, foundation cracks, and roof issues. Also have the plumbing, electricity and HVAC systems inspected. Repairs on these items may be very costly. It’s not unheard of for an inspection to reveal information that sends a buyer running.
Sealing the Deal: Closing Costs: Every buyer has to foot the bill for lender fees (including points), real estate agent and lawyer fees and more. There is also homeowner’s insurance and property taxes to consider, though in many cases these can be rolled into your monthly payment. A savvy buyer may be able to negotiate these fees with all the professionals involved. And, maybe the seller will be willing to take on some of the fees, as well.
Getting the Move On: While this expense isn’t part of the actual real estate purchase, it’s a big nut to crack when you are already paying thousands upon thousands at the closing table. Depending on how much “stuff” you have, you may need a professional moving company or you might be able to depend on the kindness of friends with a truck. Be careful, though. Don’t lift anything beyond your means because physical injury can be more expensive than anything else! (Think time off work, medical treatment, physical therapy and, quite possibly, reoccurring pain!)
One of the most important things you need to do when moving, after choosing the property you want to purchase, is hiring an excellent real estate lawyer who will have your back throughout the transaction and at the closing table.
Joel R. Spivack, Esq., has been guiding clients in Camden County, NJ, through real estate transactions for over 25 years. He can help you get over the threshold, too! Call his office today for a consultation.