The Additional Costs Of Real Estate Transactions
Many of us spend months or even years researching real estate and saving for a down payment on a home. We prepare for costs like taxes, transfer taxes, lender fees, title company fees, and an earnest money deposit. However, many first time home buyers and sellers may be surprised by some of the additional costs that come with their real estate transactions. These are not typically included in the lender’s calculations or the closing disclosure. Nevertheless, I want you to know about them so you can prepare for them and have a smooth transaction when you are truly ready to buy or sell. Just remember to take the following into account and you will be better prepared:
Moving storage - When transitioning from one place to another, items from your old home and life may not fit the new space right away. However, it may take some time before you can sell off pieces or find the space. Many clients end up placing items in storage before they move into their new homes, a cost they did not anticipate. It’s worthwhile to calculate these costs and factor them into your budget.
Moving expenses - When buying or selling a house, having a few friends over for a “packing party” and free pizza is likely not the best way to move your stuff. Instead I would advise hiring a professional moving team and, of course, making sure you account for those costs.
Cleaning costs - When leaving your old place, landlords and new occupants will expect a space that is at least “broom clean.” You can of course do this yourself. However, you may not want to in the midst of closing, moving and making a life transaction. More often than not, it’s worth it to hire a professional cleaning team. Calculate the cost and see if it can work for you.
Punch-out list - This one is for the home sellers. This is the list of items an inspector recommends you repair or replace before the sale is complete. These may go beyond the home improvement costs you initially expected. It is wise to have a financial cushion for them.
Maintenance during escrow - Another important consideration for home sellers. Even if you have moved out of your home, you will still be expected to do basic maintenance like lawn care before the new owners take over.
Additional inspections - This is for the home buyers. Certain homes in certain areas may require special inspections. A general inspection covers items like the safety and quality of the roof, foundation, electric, plumbing and HVAC. However, you may need to pay for special inspections for things like raydon, mold, or lead-based paint. This may lead to additional costs.
When I take on a client, I always want to ensure they are prepared for whatever comes their way during the home buying or selling process. Hopefully with this list, you can calculate a more accurate budget and avoid surprises as you buy or sell your home.