At CandysDirt, we love real estate and we love homeownership! But with a house comes expenses beyond the mortgage and insurance. For the unprepared buyer, these can be a rude surprise. And nobody likes those.
We’ve seen it before: First-time homebuyers focusing solely on the list price of a house when deciding how much they can afford, and then being shocked by all of the other costs associated with homeownership (hello, water heater/new roof/foundation repairs!). These extra or hidden costs are often the most stressful part about owning a home.
“Those in-the-know are wise to set aside an emergency account, because regardless of age, price point, or quality of construction, issues are going to arise, whether it a 100-year-old house, or a 100-day-old house,” said Realtor Brian Davis of Dave Perry-Miller InTown. “When those issues happen, they’re not always inexpensive and you’re wise to have money saved up for that rainy day.”
We happened upon a new study by Zillow and Thumbtack that identifies a variety of common home expenses — both unavoidable and optional — that often get overlooked during initial budgeting. They calculated what homeowners could spend each year to cover these costs in their area. While these extra expenses might seem small individually, they add up quickly, to the tune of $9,477 for the average American homeowner.
“One thing I’ve stated doing this past year for new homebuyers is having them look at properties $10,000 less than what they’ve been approved for so they have some credit or buying power if they have to do repairs later,” said Elaine Copeland, an Ebby Halliday Realtor. “That also gives them some money for fixing it up—a lot of houses are sold ‘as is,’ and if buyers purchase $10,000 to $20,000 below [their max mortgage approval], they can better manage their budget in the long run. The best thing for a Realtor to do is advise them to do everything affordably.”
So just what are those extra or hidden expenses? Let’s take a look.