Buying your first home is exciting. As you begin imagining your new life, it’s easy to dream of a new couch here and a new TV there. It’s logical to picture a professionally landscaped yard and the color scheme of your new home office.
But remember all these “new” things cost money. Before you wipe out your savings account to outfit your new abode, make sure you can cover all the potential expenses associated with buying.
Third party fees paid at closing are typically non-negotiable. Sometimes the seller will pay some or all of these costs, but sometimes not. These third party fees can include:
- Document Taxes
- Transfer Taxes
- Prorated Property Taxes
You’ll also need to pay for a home appraisal. Additionally, it’s often a good idea to invest in a professional home inspection before closing.
Once you’ve closed, you might get hit with a special property tax assessment. This is different from the property taxes and hazard insurance your mortgage company has already collected. This tax generally occurs when your taxing authority needs money to put in a new streetlight or revamp a park in your neighborhood.
If your condo or neighborhood is governed by a homeowners association (HOA), you might be charged special HOA assessments. This typically covers items such as repairs and improvements to the common areas. It’s a fee that’s due above and beyond your monthly or yearly HOA dues. The good news is, HOA members typically vote on projects and review bids before any work is started.
In addition to special taxes and assessments, you might need to acquire flood and disaster insurance. This is particularly true if you live in a flood plain.
Furthermore, your home might need some unforeseen work. For example, you could suddenly need to repair the dishwasher or patch a leaky sink.
Have additional questions? Give me a call today.