I guess I’m in a trend where I’m talking about real estate, this week I’m going to discuss costs. There are a lot of costs that crop up when you are buying and selling a home. Unexpected costs.
When you are buying a home, you know pretty much what you are going to pay in closing costs for your mortgage. But there are hidden, unexpected costs as well. For example, let’s say you like a home, you put an offer in, it’s accepted, then you pay for a home inspection. The home inspection turns up terrible news and you decide to pull your offer on the home. You are out of pocket the cost of the home inspection which likely cost a few hundred bucks. Ouch.
Or worse yet, after you move something breaks and it’s not covered by the home warranty. Then you are out of pocket whatever it costs to repair the problem. Things always break when you move in, it’s murphy’s law.
But when you sell what costs should you assume to have? I estimate 10% of the sales price when I sell. Most of it due to 3% commission you pay to the buyer’s and seller’s agents. Perhaps during a hot housing market an agent is not necessary to sell your home, but during a slow market you need all the help you can get. Why? Because agents won’t show your house if it looks like you won’t pay a commission. So at a minimum you’ll have to pay the buyer’s agent 3% commission.
Also when you are selling there are unpredictable costs like renting a storage unit, hiring a stager to help stage your house, and maybe even hiring a cleaning crew to come in and do a once over. And it’s recommended before selling that you get your own home inspection so you can fix all major defects before you put your home on the market. Also because your house has to be impeccable all the time for showings, you’ll find yourself eating out more so as to not make a mess.
Also the time off to meet the home inspector, appraiser, contractor can make both buying and selling expensive.
Buying and selling homes can be very stressful and expensive. These are few of the unexpected costs I faced when buying and selling a home. Are there others I missed?
5 responses so far ↓
1 Angie // Jan 21, 2009 at 12:32 pm
One of the other not-so hidden costs of buying is furnishing. Even if you love your furniture, and it fits perfectly, it clashes with the drapes on all 8 windows in the great room, or they take all the drapes with them (despite telling you they are staying) and you are left with tons of windows that let the whole world watch you in every room in your house.
Then, of course, there is the huge pee stain that was covered by their couch but is out in the open now that you have re-arranged your furniture in the space. Or the dryer that they so willingly agreed to leave that doesn’t work because all of the vents are so clogged up with cat hair (that you are severely allergic to of course). My personal favorite, was the dishwasher that had a nest of cockroaches living in the door panel. After having professional bug guys come out several times to try and get rid of them, DH found the nest and was told by several bug people that the only way to truly get rid of them was to replace the whole dishwasher. Not covered by insurance of course.
Thank goodness we had money in the bank and weren’t living too close to the edge! This house would have pushed us over. And the funny part is – after living in fixer uppers for many years, were were excited to buy it because it was only 3 years old and we figured it didn’t need much work!! HA
2 Miss M // Jan 21, 2009 at 7:01 pm
Well on the selling side you also have the escrow or attorney’s fees, any necessary repairs and termite inspection and remediation. If you are a first time homeowner moving into a house from an apartment, lawn and garden equipment! We didn’t have anything when we moved in so we had to buy hoses, sprinklers, shovels and rakes, a lawn mover etc etc. I never thought about it beforehand either.
3 Miss M // Jan 21, 2009 at 7:03 pm
Umm, I meant lawn mower not lawn mover! Though I’d love it if someone would move my lawn and replace it with a better one. Three dogs aren’t kind to grass.
4 LivingAlmostLarge // Jan 21, 2009 at 8:23 pm
Yep I forgot about furnishing a home! Fortunately we’re not much into furnishing so we’re still living in a somewhat empty house. And for replacement furniture it’s been all used and mostly free stuff.
Rich Life Carnival #30 | Rich Life Equals Better Life - Jan 31, 2009
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