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Overlooked Costs of Home Ownership

Yahoo had this article about the 12 Hidden Costs of Homeownership that reminded me of the many times I had to take a deep breath when we were buying our home.  Here’s a quick summary of their list:

1.  Home inspection – $300 or more
2.  Pest Inspection – $50-$200
3.  Appraisal Fees – $350-$400
4.  Closing Costs – 2%-3% of the mortgage loan amount
5.  Moving Expenses – Variable
6.  Furniture – Variable
7.  Property Taxes and Homeowners Insurance – $3000 or more and 0.5%-1% of the loan respectively
8.  Supplemental Insurance – $240 a year
9.  Homeowners Association/Condo Fees – Variable but could be more than $1200 a year
10.  Utilities – Variable
11.  Ongoing Maintenance – Variable
12.  Repairs – Variable

Here’s how we have fared so far:

1.  Home inspection – $200
2.  Pest Inspection – $50
3.  Appraisal Fees – $250
4.  Closing Costs – 2.2% mortgage loan amount or about $2000 total since we had a $91,200 mortgage.
5.  Moving Expenses – $400 since we packed our stuff and hired a company to simply bring the boxes and furniture to our new house.
6.  Furniture – So far we still use family hand-me-downs for almost everything, but we did spend $6000 last year for a new bedroom set and Tempurpedic mattress.
7.  Property Taxes and Home Insurance Cost – $2200 and 0.9% of the loan respectively…again, we have lower costs than a bunch of people around us since we bought a very nice foreclosure for $114,000 and put 20% down.
8.  Supplemental Insurance – $260 for flood insurance in the Houston area.
9.  Homeowners Association/Condo Fees – None since we’re not part of a homeowners association.
10.  Utilities – $80-$180 for electricity and $30 for water…we don’t have a gas line or a home phone line.
11.  Ongoing Maintenance – We pay about $2000 a year between our yard guy, housekeeper, and miscellaneous costs like cleaning supplies.
12.  Repairs – So far, we’ve only paid about $300 for repairs in 3 years ($100 for an A/C compressor, $150 for a water heater problem, and about $50 for supplies for minor problems on a toilet and guest bathtub).  We have an account that is building up while we wait for something big to break.

In short, there are a bunch of expenses that kind of sneak up on you when you buy and live in your own home.  I haven’t even mentioned the extras like a home security system.  My husband and I were aware of these costs before we started the whole process, but it’s still not the easiest pill to swallow.

We’ve kept our costs lower than the other homeowners that we know by buying an affordable, newer house that is in great condition and by handling minor issues ourselves.  We’d save even more if we handled our own lawn care and chores, but where’s the fun in that?

How do your home costs look?  Did you expect them or were they a pretty rude shock?

8 thoughts on “Overlooked Costs of Home Ownership”

  1. me in millions

    Even with all of those “hidden” expenses, I still want to own my own place… Someday!

  2. Julie

    BFS, I’ll play :). We actually saved some money because we relocated for work. When we bought our current house in 2008, we had the following expenses:

    1. Home inspection – $200
    2. Pest Inspection – $50
    3. Appraisal Fees – $350
    4. Closing Costs – none – paid for by work.
    5. Moving Expenses – paid by work.
    6. Furniture – moved our old furniture from 1st house. Didn’t need anything more.
    7. Property Taxes and Homeowners Insurance – 6K
    8. Supplemental Insurance – none
    9. Homeowners Association/Condo Fees – $200/yr
    10. Utilities – averages $210 a month for gas/electric, $30/mo for trash, $35/mo for water/sewer.
    11. Ongoing Maintenance – Variable
    12. Repairs – 1K – new hot water heater, 5K – new roof shingles

    – about $800 a year for lawn upkeep (cutting and service)
    – cleaning supplies are vinegar, baking soda, and lemon juice so very cheap and in the grocery budget because I actually use those things in my cooking, too 😉

  3. MikeS

    I’ll admit, I have no idea what my closing costs were back in 2005. You can bet I’ll be all over them when I move next year.

    7. Property Taxes and Homeowners Insurance – 3900 in taxes $200 for a Condo policy
    8. Supplemental Insurance – none
    9. Homeowners Association/Condo Fees – $190/mnth
    10. Utilities – $190 a month for electric, $25/mo for water/sewer.
    11. Ongoing Maintenance – very little, condo association handles everything outside
    12. Repairs – $350 – had some issues with the automatic garage door opener a couple times

  4. Julie

    BFS, the property taxes on my first house were about double what I’m paying now. Talk about ouch!

    MikeS – Are you all electric? Also, are you happy with your condo services? My mom is looking into a condo, but since I’ve never lived in one, I have no idea what is good/bad.

  5. MikeS

    Julie, I am all electric. The $190 is the budget bill the electric company has calculated for us.

    I am happy with the services we get from the association. They do all the lawnscaping and grass cutting, snow removal, and all maintenance on the exterior of the building. Since, I bought the place in Sept 2005, they have put a new roof on, repainted the siding and restained all the wood decks. We only had to pay a one-time fee of $270 for the roof (it was more expensive then had been budgeted), in addition to the normal monthly fee.

    For your mom, I would compare a few complexes and compare the fees they charge. My wife and I saw some big differences when we were looking. It also can’t hurt to ask how much the association has in reserves. The lower the amount, the more likely she’ll have a big charge someday when the roof or something big needs to be replaced.

  6. BFS

    MikeS, I really like the idea of someone taking care of all external crud…that’s pretty fantastic!

  7. MikeS

    BFS, that’s why we went with a condo for our first purchase. I just didn’t want to have to worry about maintaining the outside. They shovel (snows a little in CT), cut the grass and pick up the leaves. Makes life so much easier. 🙂

  8. Ben

    Installing an automatic gate opener can really add convenience without sacrificing security.

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