The Real Cost Of Home Ownership That No One Tells You Before You Buy

The phrase “the American Dream” was coined by a Pulitzer Prize-winning historian named James Truslow Adams in his 1931 book The Epic of America. Home ownership is the cornerstone of what people consider the “American Dream”. Unfortunately, few professionals take the time to explain to new buyers the real cost associated with home ownership. Realizing the “American Dream” costs more than you might think. As a consequence, first-time home owners often discover the true cost after it is too late.

As both a homeowner and licensed real estate agent, let’s dig into the not-so glamorous side of home ownership. Let’s explore the other side of the coin that is often never talked about. A few of these items include: property taxes, loan approvals, closing costs, appraisals, inspections, land surveys, easements, repairs, water damage, and more!

As a first-time home buyer, you might be surprised to learn about all the costs and fees associated with selecting the perfect home for you and your family. These expenses are inquired about before you even make it to the closing table. And unfortunately, you might have to pay these fees more than once, as finding a good investment can take more than one attempt. Let’s explore a few common expenses and learn why they are necessary.

A home inspection is necessary to get a closer look at the home. The home inspection is the opportunity to learn about any delayed repairs, broken systems, and damage you would inherit if you choose to buy that property. Fun Fact: Some home loans even require you to perform an inspection before you can be approved for a home loan.

The property appraisal is a non-negotiable if you plan to finance a home. An appraisal is a professional opinion on the current market value of that particular property. Quick scenario: You find a house you like and place an offer in for the house at, let’s say, $500,000. The offer is accepted. The property passes inspection, and you are ready to schedule the appraisal. After the appraisal is conducted, you get the news that the house is only valued at $450,000. If the seller is not willing to go down on the price, or you are not prepared to bring $50,000 to the closing table. You will have to continue your search, and the money you paid for the appraisal is lost.

A land survey is conducted by a third party to grasp a graphic layout of a property. It maps the legal boundaries and other features of a property that might be needed when it comes to solving any issues that might be brought up during real estate transactions

Finding a competent set of professionals will make your home search and home-buying process much easier. A great tip is to meet with several professionals, ask questions, and select the professionals that you feel most comfortable with. A list of people that should be on your home-buying team includes:

• real estate agent
• credit repair specialist
• mortgage loan officer
• tax professional
• home inspector

Fun Fact: Failing to properly vet the members of your team can cost you money. Not having a qualified home inspector can cost you money with unexpected repairs. Neglecting to search for the right loan officer can cost you money with high interest rates. Not to mention the consequences of missing first-time home buyer programs. Lastly, an unseasoned real estate agent can cost you money by missing contractual deadlines and not asking the sellers the right questions.

Confirming the qualifications of the members on your team and properly vetting them can impact your ability to negotiate the best price, get the best interest rate, qualify for the best loan program, and find the best deals for your area. Don’t skip this step, as not all professionals are made equally.

With research and due diligence, finding a house you can call home is possible. It is safer to expect the unexpected when it comes to purchasing a home. Educating yourself and being prepared will go a long way. Diving into such a large financial obligation blind can be costly if you don’t prepare.