New House Checklist: The Hidden-Costs-Included Budget Planner

January 18, 2018

New House Checklist: The Hidden-Costs-Included Budget

There's a lot more to buying a house than just the listing price. Click here for the straightforward new house checklist to help you budget accurately.

Ready to join the between five and six million Americans buying a new home each year? Congratulations! It's a cornerstone of the American Dream.


But if it's your first time buying a house, there are dozens of small, hidden costs that can sneak up on you. The down payment alone is not enough.


Closing fees. Broker fees. Inspections. Repairs. It can be a lot.


Use this new house checklist to make sure you don't get blindsided.


Deposits Precede Down Payments


Once you make an offer on a house, you're typically expected to put down a deposit to show that the offer is serious. This is often referred to as "earnest money."


Putting down $1,000 here is typical, but it can be as little as $500 or as much as 1 percent of the purchase price. This is where it's helpful to work with a buyer's agent, as they can help walk you through the specifics for your area.


Set Aside Money for Inspections


Home inspections are a critical part of the home buying process. It's also an expense that you can't recoup if the inspector's report makes you walk away from the table.


According to market research, the average home inspection will run you $473, though factors like your real estate market and the size of the house you're trying to buy make a difference. Overall, inspections run from $350 to $600.


If you're lucky, you should only have to shell out for a single inspection before negotiating with the seller to make fixes or compensations for any issues the house might have. But it's possible you may have to pay for two or three in the house-buying process, so it's important to budget for it as part of your new house checklist.


Before buying, you have to have more than a skin-deep understanding of your prospective new house, so this is not really an expense you can skip.


Understand Your Total Closing Costs


Closing costs are part of what makes buying a house expensive, and why it can take a few years before you're on the positive side of the margin versus what it costs to rent.


Typically, closing costs will be between two and five percent of the sales price. On a $500,000 house, that means you could be looking at $25,000 in closing costs.


Some fees incurred at closing include charges for services like:

  • A credit check
  • Appraisal to determine the value of your home
  • Flood certification
  • Underwriting to verifying your eligibility
  • Origination costs
  • Title insurance fees
  • Recording costs to your city or town


Factor in "Pre-Pays" for Insurance and Taxes


Depending on the terms of your loan, you may have to pay your homeowner's insurance, private mortgage insurance (if you're putting down less than 20 percent), and taxes up front for the year. For some loans, this can be as much as fifteen months' worth of homeowner's insurance at closing, held in escrow.


Then, your monthly payments go toward re-filling that escrow account for the next year. This policy protects the lender and can help insulate you as a homeowner, but is a significant expense you have to factor into your total costs.


New House Checklist Checked Off? Now Find a Home


You've adequately planned for all the hidden costs of buying a new home, so it's time to talk to an expert you can trust about next steps. We've been in the business for more than twenty years and have handled every aspect of real estate management.


Check out our comprehensive free resources to help you on your journey to buying a new home.

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