What Are the Hidden Costs of Buying a Home?

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Learn About the Hidden Costs of Buying a Home

Are you searching for your dream home in Lawrence, KS? Do you have questions about the the total cost to purchase? Today, we're going to answer the pointed question: what are the hidden costs of buying a home? You might think you've got it all figured out and you may have budgeted for a down payment, mortgage payments, and closing costs - but buying a home is like an iceberg - what you see on the surface is just a fraction of the whole picture. Let Realtor Jackie Giroux help answer your questions and help you find your dream home in Kansas.

11 Unexpected Costs When You Buy a Home

Let’s dive in! When you choose to buy a home, you might find yourself overwhelmed by the unexpected costs that go with home ownership. Realtor Jackie Giroux wants to help you get ahead of the curve and we have created a list of 11 Unexpected Costs When You Buy a Home.

It's not just about the mortgage payments and the down payment. There's a whole treasure trove of expenses that can sneak up on you as a new homeowner. Closing costs, home inspections, property taxes, and homeowner's insurance - these are just a few of the hidden costs you might encounter on your home-buying journey. And we don't even want to get started on the maintenance and repair costs that can pop up when you least expect it! But don't worry, we're here to highlight these hidden costs and ensure you're well-prepared for your adventure into homeownership.

1. Home Appraisal

A home appraisal is a home's report card, where a professional appraiser gives it a thorough once-over, compares it to homes in the neighborhood, and then provides the details in a comprehensive report. This cost might sneak under the radar, but it's a key player in the mortgage game. The average cost of a home appraisal in Kansas is $325 - $425 for a single-family home and while it may not seem like much, you should factor it into your budget to avoid surprises. It's a hidden cost that provides transparency to your home purchase.

2. Home Inspection

Home inspections are like the detective work of the home buying process. Hire a private investigator (home inspector) to uncover any hidden issues that might lurk under the surface of your dream home. A home inspection is crucial to help identify potential problems, such as structural damage, plumbing issues, or outdated electrical systems. This process involves a professional inspector who examines the home and provides a detailed report. The cost of a home inspection in Kansas typically ranges from $350 - $400. It's a hidden cost that could save you money and headaches in the future.

3. Closing Costs

Closing costs are one of those hidden and unexpected costs that can catch homebuyers off guard. They're like a secret ingredient in a complex recipe that can be overlooked but is crucial to a delicious meal. These costs encompass a variety of fees related to the home buying process, including loan origination, title search, and more. Here’s the kicker - these closing costs usually fall between 2% to 5% of the home's purchase price. Which means that if you have your heart set on a house with a price tag of $300,000, you might need to set aside an extra $6,000 to $15,000 from the start to avoid any added stress.

4. Moving Costs

Moving costs are like the final hurdle at the end of the home buying race and can be overlooked when faced with closing costs, down payments, escrow, inspection fees, and more. When you buy a home, it's important to remember that the process doesn't end when you close. There's still the adventure of moving all of your possessions from your old abode to your new dream home and whether you enlist the help of professional moving maestros, commandeer a rental truck, or stock up on packing supplies, these costs can start to stack up like an unsteady tower of moving boxes. And if it is a long-distance move, travel expenses might be a factor. These are hidden costs that help you take the final leap into your new home.

5. Property Tax

Property taxes are another hidden cost that can surprise new homeowners. They're like the annual subscription fee to the exclusive club of homeownership. Property taxes are determined by local governments and are usually based on the assessed value of your property - to include the lot and buildings. The tax rate can vary greatly based on where you live, but it's usually a percentage of your property's value. Kansas property taxes are collected by the county and the median annual property tax payment in Douglas County is $2,221. Research property tax rates in your area before you buy to avoid hidden costs.

6. Insurance

Homeowners insurance and Private Mortgage Insurance (PMI) are like the surprise guests at a party. Homeowners insurance is like a superhero, swooping in to save the day if your home or personal belongings suffer damage. The cost of this superhero's services can vary based on your home's value, location, and additional factors. Mortgage insurance is more like a bodyguard for your lender. If your down payment is less than 20% of the home's purchase price, most lenders will insist on PMI. It's their way of playing it safe if you default on your mortgage. These costs can add a significant amount to your monthly budget, so it's important to factor them into homeownership.

7. Appliances

Appliance costs can be overlooked when you purchase a home. When buying a home, it's easy to forget that appliances may need to be purchased or replaced. Whether it's the refrigerator that's closer to retirement than you'd like, the dishwasher that's more drip-drip-drip than sparkling clean, or the oven that's more vintage charm than culinary tool, these costs can add up. And we can't overlook the little guys - the microwaves and washing machines that might also be due for a modern makeover. When you create a budget for your new home, remember to set aside some cash for potential appliance purchases or upgrades. Brand-new appliances for your home will cost about $10,000 on average.

8. Furniture

Furniture sets the tone and style of each room. When you buy a home, especially if it's your first, it's easy to overlook the cost of furnishing it. The upgrade from college apartment to new home means you may want to ditch your broken-in old futon in favor of a real bed. You may want a comfy couch for your living room, a sturdy dining table for family meals, and a cozy bed for a good night's sleep - and all these pieces can add up. And let's not forget about the smaller items like lamps, rugs, and curtains. Include new furniture in your budget to avoid any financial surprises. The average cost to furnish a new home is about $16,000 in the United States - but will vary based on your home and preferences.

9. Utilities 

Utilities are the behind-the-scenes stars of a home that ensure comfort and convenience. When you buy a home, it's important to remember that the cost of utilities - electric, gas, water, and internet - will be ongoing expenses that are easy to forget about when you are excited to move into your dream home. These costs can vary greatly depending on the size of your home, its location, and your personal usage. A larger home may require more energy to heat and cool, and if you're working from home, your internet costs might be higher. When you calculate your budget, don't forget to factor in the cost of utilities. The median cost of utilities in Lawrence, KS is $262 per month, but I would budget $400/mo to be safe.

10. Home Tools

Home tools are easy to forget when you purchase and move into a new home. When buying a home, especially a first home, it's easy to overlook the cost of essential tools like a lawnmower that keeps your yard neat, a vacuum to battle dust bunnies, a weed eater that tames the hedges, and potentially a snowblower for cold Kansas winters that will help maintain your home. And while home tools might not be the most glamorous purchase, they are necessary. Add them to your budget and remember - a well-maintained home is going to better protect your investment (and probably offer some personal zen as well).

11. Deck, Patio and Pool

A deck, patio, or pool can be the cherry on top of your dream home and may be a selling point - but they also come with their own set of hidden costs. These outdoor features require regular maintenance and occasional repairs to stay in top shape. A wooden deck may need to be resealed every few years to prevent weather damage, a patio might require occasional power washing, and pools can be an ongoing expense, with costs for cleaning, chemicals, and potential repairs. We know these features can enhance your home's appeal and provide a great space for relaxation and entertainment - but it is important to factor in their upkeep costs when planning your budget.

Find a Real Estate Agent in Lawrence KS

Are you moving to the Lawrence, KS area? Are you selling your current home? Are you hoping to invest in a growing community? A real estate agent in Lawrence, KS can help you every step of the way and Jackie Giroux has the knowledge and experience you need to find your dream home. Jackie Giroux is a licensed real estate agent and property manager in Kansas that can help you find your next home, sell your current home, find investment properties, and provide relocation services when you have found your dream home.

READ MORE: Is It Cheaper to Buy or Rent a House in Lawrence KS?

The journey of buying a home is filled with excitement, anticipation - and yes - a few unexpected expenses. From home inspections and appraisals to moving costs and the need for new appliances, furniture, or home tools, it's important to be aware of what the hidden costs of buying a home are. Keep these potential expenses in mind, plan your budget effectively, and navigate the home buying process with confidence and the help of Jackie Giroux.

Contact Jackie Giroux today to find a trusted realtor in Kansas!