Buying a home isn’t like picking up a novel at the bookstore or driving a car off a dealership lot. At the most basic level, a home sale involves swapping money for a residence – but a lot more goes into the final price tag than the place itself warrants. When you begin your home search, you will need to take the cost of doing business into your budgetary considerations and prepare to dish out more money than you might have thought when you were shopping listings. Read on for a breakdown of a few of the hidden costs you’ll likely come across!
Homeowners Association Fees
If you intend to live in a condo or co-op in New York City, you will almost certainly need to pay a monthly- or annually-charged HOA or maintenance fee. The pool of money created by HOA charges covers the maintenance of important spaces like lobbies, gyms, pools, outdoor patios, and even elevators. Because the recurring cost will depend on the home you choose, you should make a point to take note of every potential home’s HOA expenses before deciding on a single listing.
In an ideal world, every property would be just as perfect as it appears. However, even nice-looking properties can have troublesome – and pricy! – flaws. Save yourself the long-term worry and expense by hiring a third-party inspector who can note potential problems before they become acute. These services might cost you now, but you’ll be thankful later.
You might know a home’s price, but do you understand the cost of living there? Before you enter into negotiations, you should do some research on average utility costs (ie., electric, water, etc.) in the region to get a better idea of what you can expect to pay on a monthly basis.
Good Faith Deposit
Good faith deposits assure a title company of your intent to buy the home prior to the actual sale; once you close, the deposit will be applied towards your down payment. However, it is important to note that the check you submit will be cashed immediately, regardless of whether the sale is progressing quickly.
Closing costs have a tendency to pile up. These include but are not limited to: title insurance, origination fee, recording fee, application fee, homeowners insurance premium, property taxes, and credit report fee. Don’t let the expenses take you by surprise; research and budget your sales costs!