Below is a rundown of five details that are commonly overlooked by first time homebuyers. Take a minute to look through the list so you don’t get hit with surprise expenses after you’re already under contract.
Cost of Utilities
You may want extra square footage, but have you considered how much it will cost you in energy expenses every month? More square footage means higher cost to heat and cool the home. The health of the HVAC system can also have a dramatic impact on the cost of utilities.
In some areas of the country powering a home can dramatically increase the cost of living and homeownership. If you’re interested in a home don’t be afraid to have a professional check the HVAC and ask the homeowner to provide more information on their current costs.
The first step is to find out who provides utilities in the neighborhood and whether the home is in a deregulated area. In deregulated areas you have the ability to select your own electricity and gas providers, which can help you save money on utilities. Find out more about locating and selecting the provider with the best rates.
It’s easy to get so mesmerized by the inside of a home that you completely forget to consider the exterior. New homeowners quickly realize that the exterior and yard can take as much, if not more, maintenance than the interior of the home. If you live in an HOA it will be something that you have to stay on top of.
When you’re touring homes ask yourself questions like:
- · Is the roof in good condition?
- · Is the siding in good condition?
- · How much upkeep will be needed to maintain the landscaping?
- · How will the landscaping be impacted each season?
- · Is there an in-ground sprinkler system?
- · Have there been pest problems in the area?
Coordinate a Flexible Move
If you’ve gone through the loan process once before you’re probably already aware that the timeline is flexible. You’ll have a close date, but that date could change along the way. That means your move has to be flexible as well.
So many buyers have gotten burned by scheduling a move in advance for the day they are supposed to get the keys. Then something delays the close by a day or two. If you hired movers for a specific day it may be impossible to reschedule.
With this in mind, let the moving company know your situation and ask whether there is flexibility in the scheduling. If you have to choose a specific date in order to guarantee service choose a date a few days after the close is scheduled. This will give you a much-needed buffer.
HOA Regulations and Fees
Real estate agents must note whether a property is within an Homeowners Association (HOA) because it comes with added rules and regulations. Each HOA sets its own standards for basically anything within view from the road. In addition to enforcing the regulations, the association also maintains public spaces within the neighborhood and charges a fee for their services.
Living in an HOA has its benefits and its drawbacks. Always make sure you know if a home is in an HOA, what the association fees are and get a copy of the regulations to look through. States such as Texas require by law that homeowners provide buyers with a copy of the HOA covenants, conditions, and restrictions (CC&Rs) before close. Keep in mind breaking the rules can quickly result in penalty fees, and it can be difficult to change the rules that have already been set.
Potential Increases in Property Taxes
No matter where you live there’s one guarantee – property taxes. Even if you buy a home outright with cash there will still be property taxes to pay come April.
There are two components to your property tax bill – the property tax rate and the assessed market value. Each county establishes their own property tax rate, which can change from year to year. However, usually the rate remains fairly consistent so it’s easy to factor it in to the overall monthly cost of the home.
But first time buyers often don’t consider the possibility of increases in their appraised value. County assessors will determine a market value for a property. This is the value that’s used to determine the amount of property taxes you owe. If you’re buying in a hot area where homes are appreciating, there’s a good chance the assessed value will increase and you’ll end up paying more in property taxes.