Budgeting for a real estate transaction includes more than calculating monthly mortgage payments. Homebuyers and sellers can often overlook some associated costs, which can sometimes cause stress and budgetary disappointments. While costs and fees can vary depending on your location, whether you’re the buyer or seller, and other transaction factors, here are some of the expenses you may expect:
Talk to your real estate agent and mortgage broker about what to expect, but closing costs often run between two to seven percent of the final sales price. Some fees are the responsibility of the buyer or seller, and some may be split. Depending on your deal and your area, closing costs may include mortgage origination fees, title insurance fees, loan processing costs, pro-rated property taxes, mortgage insurance, surveys, administrative costs such as recording fees and notaries, and other potential line items.
It can be easy to underestimate how much the moving process will cost. Charges for packing supplies, labor, and a moving truck or van are some of the main expenses associated with moving a household. If you use a moving company, be sure to get several estimates and references. If you move, remember to factor in fuel costs.
Real estate agent commissions can vary but are often around 5-6% of the sales price. They are usually paid by the seller, and the commission amount is typically split if the buyer and seller each have their own agent. Be sure to discuss the commission amount and who is responsible with your agent at the beginning of the transaction to make sure you understand.
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In addition to monthly usage payments, setting up new accounts may incur deposits, service fees, or collection fees to turn utilities on or off or to transfer payment responsibility. Do your homework before you move so you can estimate costs accurately.
For safety, you’ll likely want to have new keys and duplicates made for exterior doors. Remember to rekey any outdoor storage rooms and garage entrances, too. If your home has a security system, you may incur charges for a service visit to change the access code.
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If you’re the buyer, you’ll likely pay separately for a home inspection and report. You may also opt for other specialized inspections, such as pool, hot tub, chimney, roof, pest, radon, and lead paint, among others.
Whether your old furniture doesn’t fit or you have new rooms to fill, a new home almost always means at least some new furniture. Prioritize those pieces that will be needed right away, and be sure to include those in your budget.
Little expenses can add up, and a new home can require lots of small, individual purchases. Incidentals like garden equipment, garbage cans, light bulbs, cleaning supplies, restocking groceries, and related purchases will all be needed. Be sure to leave some room in your budget for these necessities.
With all the expenses of purchasing a new home and moving, your budget may be stretched after your real estate transaction is complete. An HSA home warranty can help protect your budget from additional, unexpected expenses should a covered home system or appliance breakdown after closing. An HSA plan can also give you a reliable repair resource to call for malfunctions and an easy service request process. Visit onlinehsa.com for more information.