Dear Olivia,
I am considering buying my first home, and I know there are certain expenses I’ll need to pay for, like closing costs. But what other expenses should I budget for?
Sincerely,
Ready to Own
Buying your first home is an exciting milestone! But, it’s easy to get caught off guard by some of the costs of becoming a homeowner. I’ve seen this happen time and time again in my career, so don’t worry if you’re not quite sure what to expect!
Here are a few costs you might have yet to consider but are crucial to your budget.
Home Inspection Fees
While a home might look perfect during your walk-through, there could be hidden issues that only a professional can spot. Home inspections are essential to ensure you’re making a sound investment. Here are some types of inspections you might need:
- General Home Inspection: Assesses the overall condition of the home, including structural elements, roof, and major systems.
- Pest Inspection: Checks for termite damage and other pest-related issues.
- Radon Inspection: Tests for radon gas, which can be a health hazard if present at high levels.
- Mold Inspection: Identifies mold problems that could affect your health and the home’s integrity.
Budgeting for these inspections is crucial to avoid costly repairs down the road. What’s more, should the inspectors find issues, your Realtor can use that information to negotiate with the sellers to cover part or all of the expenses related to repairs. They might also negotiate a credit or a price reduction to cover any repairs.
Homeowners Insurance
Protecting your new home with homeowners insurance is a must. This insurance covers damages to your home and personal property and provides liability coverage. Here are some components to consider:
- Basic Homeowners Insurance: Covers common risks like fire, theft, and certain natural disasters.
- Additional Coverage: This coverage is location-dependent. For example, additional coverage for flooding is highly recommended for homes by local rivers and streams.
- Liability Coverage: Protects you in case someone gets injured on your property.
Ensure you get the right coverage to protect your investment and provide peace of mind. This is not an area you want to skimp on, even though the hope is that you never need to use your insurance policy!
Maintenance and Repairs
Owning a home means spending time and money maintaining it. Maintenance and unexpected repairs can be significant expenses, though. Here’s what to budget for:
- Regular Maintenance: Routine tasks like HVAC servicing, lawn care, and gutter cleaning.
- Emergency Repairs: Unexpected issues like roof leaks, plumbing problems, or electrical faults.
- Long-term Replacements: Over time, major components like the roof, appliances, or HVAC system may need replacing.
Start setting aside money for maintenance-related issues now, rather than later. The sooner you start saving, the more time you’ll have to build up a nice fund to pay for these costs. Plus, staying on top of maintenance issues keeps your home in better shape and can help prevent more major problems from occurring.
Buying your first home is a really exciting journey, but it’s essential to be prepared for the various costs involved. By budgeting for these often-overlooked expenses, you can confidently take this big step towards homeownership. Remember, a well-informed buyer is a successful buyer! If you have other questions, don’t hesitate to reach out to me at 307-856-3999!
~Olivia