Home Steep Home: The Hidden Costs Of Buying A House

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By Mia Bolaris-Forget

In this age of DIY (Do-It Yourself) dynamics, we’ve all pretty much accepted that if we want something done “right”, we must do it ourselves. Well, while that may be true much of the time, there are those instances where we are just better off hiring a professional. According to industry experts, buying a home is one of those times, especially since the average “consumer” in unaware of many of the “hidden” costs associated with closing and moving.

Here are of the most frequently overlooked fees:

1. Property and Assessment Tax: Those buying a home frequently need to establish an escrow account with the new mortgage lender. This requires that the homebuyer pay a portion of taxes upfront. In some states, the seller has already paid the local taxes and this amount is paid back (by the buyer) at closing. Additionally, in some countries, there are also transfer taxes whenever property changes hands.

2. Insurance: Homeowners and/or fire insurance generally needs to be paid for upfront. While some may be able to get insurance binders from their insurance companies on a payment plan, most mortgage companies ask that the first year (coverage) is paid during escrow or closing.

3. Appraisal Fees: Mortgage lenders request an appraisal to ensure that your property covers your loan amount plus any investment risk. They purchaser is generally required to pay between $150 to $450 for the appraisal.

4. Survey Fess: Some financiers ask for a property survey. You may also want a survey if there is a question about property lines. Survey fees range from about $600 to $2,500, or more for large pieces of land

5. Septic System Certifications: You should find out if your new property connects to the public sewer system or not. If it does not, you may need a septic clearance for your lender. More often than not, the home seller pays this fee, but you may want to double check to make sure you don’t get hit with any unexpected costs.

6. Water Quality Certification: For your own piece of mind you’ll most likely want to have the water quality (on your new land) looked into. And, you may want to have this clause as a condition in your purchase contract. Besides ensuring the safety of the water quality, you’ll want to make sure the well has enough flow so you don’t run out of water.

7. Sundry Origination And Loan Charges: Mortgage lenders often add fees for processing your loan, documenting preparation, underwriting, closing, funding, and many times for “garbage fees”. Experts suggest checking your approximate cost statements and to be thorough about checking for hidden fees. Before committing to a lender, also make sure you do your homework and shop around for the best deal.

8. Association And Maintenance Fees: The majority of buyers understand that condos have association fees. But, experts note that some housing developments also charge maintenance fees. They assert that often these fees are more than nominal. Some need to be paid annually, which means a homebuyer, must pay upfront.

9. Utility Service Fees: Take a close look at your hook up and installation fees for water, gas, electricity, cable or satellite TV, phone, garbage, sewer, and other services. According to experts, sometimes the water department covers the sewer and garbage service. They note that these costs quickly add up and that unless you are aware of them (and prepared for them) you may wind up with some unpleasant surprises.

10. Moving Costs: Professionals point out that you should plan your move prior to committing to a purchase. You should know (well ahead of time) whether you will be able to transport your belongings on your own, or will need to hire professional movers. The cost may surprise you.

Ask for referrals of clients and thoroughly research a variety of moving companies for both cost and reputation.

Make sure you have all your purchase and moving costs covered before you make an offer on a house. Experts remind buyers that it simply wouldn’t be wise to find out, after committing that you need more money than you have.