As a first-time homebuyer, ensure you budget for the following 4 unexpected first-time homebuyer costs.
After buying your new home, you may need to hire a moving service to help you move into your new home. If you engage a moving service, you’ll have to pay moving costs. Moving costs generally vary depending on various factors including the distance from your old to a new location, type of moving service, shipment weight and additional services. According to the American Moving and Storage Association, movers charge an average of $4,300 and $2,300 to move household goods weighing 7,400 pounds interstate and intrastate, respectively. Based on these figures, moving into a new home can be an expense. Thankfully, you can cut your moving costs by choosing an affordable moving service, moving during the off-peak season and taking only the items that you need.
Home Inspection Costs
Once the seller accepts your offer, you should hire a certified home inspector to examine the home thoroughly before you close the deal. After examining the home, your home inspector will provide you with a detailed analysis and report of the home’s structure, mechanical systems, and appliances. This information is important because it would tell you whether the home is in good condition or not. If your home inspector uncovers any issues, you can either request the seller to carry out the necessary repairs or opt out of the contract altogether. It is important to note that real estate contracts usually have a home inspection contingency period that allows buyers to get out of a contract without incurring any penalties if they are unsatisfied with the results of a home inspection report. This period usually lasts for about ten days. With that in mind, home inspection costs range anywhere from $200 to $400 depending on factors such as the location of a home, intensity of the inspection and size of the home.
Homeowner’s and Hazard Insurance
Your new home is a big investment, so you should ensure it against various hazards. At a minimum, you will require homeowner’s insurance coverage to protect your home and household items from damage. Additionally, homeowner’s insurance would offer you liability coverage against accidents on your property. The cost of homeowner’s insurance ranges anywhere from $500 to $2,000 per year depending on factors such a home’s location, condition and the deductible amount. However, homeowner’s insurance does not cover all possible causes of loss to your property, meaning you may have to purchase additional hazard insurance depending on the potential hazards in your area. For instance, if your home is located in a flood-prone area, you should purchase flood insurance, too.
Property taxes can be a considerable cost depending on where your property is located. In general, properties taxes tend to be higher in urban areas and larger cities than in rural areas. For instance, New Jersey has higher property taxes compared to Alabama, according to data from the Tax Policy Center. In other words, property taxes vary across the US.
First-time homebuyers often come across some unexpected costs when buying a home. 4 unexpected first-time homebuyer costs property taxes, homeowner’s and hazard insurance, moving costs and home inspection costs.