Becoming a home owner for the first time in your life is a remarkable achievement. After years and years of hustling, you finally get a chance to crown all that hard work, and what better way to do it than buy a property. But buying a house is not just putting a roof over your head; it is also investing in the future. And as with every investment, you want to know about all expenses that come with it. That is precisely why we have prepared this list of four unexpected costs for first home owners. So, let’s begin.
Ownership transfer fees and other legal expenses
First, as a new homeowner, all ownership transfer fees will fall upon you. These fees vary from state to state, and they come in two forms: flat fees and percentage fees. The latter are calculated based on the entire value of your new home, so the bigger it is, the more you will have to pay in transfer fees.
Besides these fees, you will have to pay annual taxes for your newly acquired property. The vast majority of adults are familiar with paying taxes, but what you probably didn’t know is that you could end up paying more taxes than you should.
You see, property taxes are not only calculated by the state, but also by the city, neighbourhood, location, and even type of housing. So, if you suspect that you might be paying more taxes than your first neighbour for the same type of property, then you should grieve your taxes. Tax grieving is usually carried out by a lawyer for a percentage fee.
Another thing that new homeowners often overlook are new monthly bills. If you are moving into a bigger house or apartment, don’t be surprised by an increase in utility expenses. Of course, they will be larger. After all, the bigger the property, the more electricity and water it will need. Furthermore, if you are moving from a sunny to a colder climate, then you should prepare yourself for added heating expenses.
If you want to get an estimate for your bills, you should ask your neighbours about their monthly expenses. Of course, the amount will vary from homeowner to homeowner, depending on how smart they are about their energy consumption.
Home maintenance expenses
Next, we have home maintenance costs. Many new homeowners are not familiar with these expenses, but they are there. Regardless if you have bought a house or an apartment, if you want to have a long-lasting property, you need to carry out regular maintenance. This includes pest control, plumbing and wiring inspections, ventilation system maintenance, and so on. Basically, as you take your car for a scheduled service, you should do the same thing for your home.
Of course, you don’t have to do maintenance every month; once a year is perfectly fine. However, you need to do it thoroughly. So, hire professional electricians to inspect if your wires are damaged, plumbers to check for any leaks, exterminators to get rid of termites, and so on. According to the Harvard University Joint Center on Housing Studies, maintenance expenses are usually somewhere from 1-2% of the total value of the property. However, if you have the equipment and know-how to carry them out yourself, you could end up spending even less.
Finally, as you have life insurance, you should have insurance for your property as well. Even though this is not a mandatory expense, you should have it on your list. Home insurance will protect your property from theft, natural disaster, and even against human error. Of course, this all depends on the type of policy you end up taking.
However, the most common option that homeowners take is the replacement cost policy. With this type of insurance, if something is stolen from your house, your policy will cover the costs of replacing that item. Additionally, if you have bought a piece of property that is in a flood area, for example, you will need to get flood insurance separately. Sure, it will cost you extra, but if such natural disaster happens and you are without an insurance, it will be hard to recover from that blow.
Finally, your home insurance cost will depend on a number of different factors, from the location to the size of the property. However, the national average in the USA is just over $1,100 per year. But if you do some research, you can end up negotiating the same insurance for a couple of hundred dollars less.
And that is about it for today. As you can see, becoming a first home owner means that you will get a couple more expenses to your name. But don’t worry; now that you know about them, these costs will not creep up on you out of nowhere.