Jim who had no experience in buying a house decided to buy a house without the help of a professional. He intended to buy a house and start living despite his naivety of some hidden costs. Unfortunately, he was faced with a huge bill of mortgage insurance, conveyance fee, taxes, among others. At this point, he had no money with him to service these expenses. He had to resort to loan to cover up for the miscellaneous.
Most first-time home buyers are like Jim – uninformed! However, you can set yourself aside from the Jims by familiarizing yourself with costs that are associated with the purchase of houses. The following are the often “overlooked” or “hidden” costs:
Every year, there are cases of real estate fraud. Most of the time, sellers sell non-existing buildings to unsuspecting buyers. Some of the sellers could sell the building to two or more customers. Fraud cases like this could be prevented through inspection and research which would not cost you more than some couples of dollars.
You can also hire the service of an expert to access the building of defects. A licensed inspector can look into some things you might not have imagined in the house. Having inspected the home, you can renegotiate with the seller in case there is a need for repair or some maintenance.
Legal Service fee
You need the service of a solicitor to properly and effectively execute the conveyance of the property you seek. Real estate lawyers would help you with the legal process and papers involved in the purchase of a house. Thus, they are available to draft the conveyance document, research any embargo or lien on the property and advise you on what to do in case there is a problem on the property. It would help if you had a standby lawyer who would verify all the documents you would be given in case the seller’s lawyer chooses to perfect all the paper works. A lawyer would charge you between $500 and $1000.
Another fee that shocks first time home buyers is the conveyancer fee. Most of the time they find the conveyancer fee too high and unnecessary, so they avoid a conveyancer. However, it is essential for there should be a conveyancer to validate the mortgage deal. You should not neglect a conveyancer if you are contemplating of buying your first home. Conveyancers usually charge between $1000 and $ 1500.
Taxes and other Government Charges
If you want to enjoy your stay in your newly bought home, you need to settle the government. Government demands that a new homeowner should pay some amount as mortgage registration fee, stamp duty, and transfer duty. As a rule, you have to pay the property taxes to finance infrastructural, schools and other community works.
Depending on your state, you would pay a minimum of $2, 000 as property tax per year. You can always choose to pay per year, month or four months depending on your pocket.
Repairs and Maintenance
After the previous owners pack out, the building might be left passive for long. The building might have lost its shape and might be seriously defective. You can hire a professional cleaner to clean the house and repair some minor defects. You can also choose to re-design the home to meet your taste. It is always necessary that you have some extra cash for repairs and cleaning to save yourself from embarrassment. The Professional cleaners charges at least $500.
As a homeowner, you will have to service some recurrent bills like utility bills, home insurance, among others. Most mortgage lenders often include home insurance in the deal, so you might not be able to escape it. However, on second thought, the insurance plans would protect you against theft, fire, storm and other related dangers.
Buying a house might be interesting but having no knowledge about the real estate hidden costs can sour your experience. This is why you need to plan and budget any charge you may incur before, during and after the purchase of that your dream house.