When buying a home, you’ll find hidden costs to factor in. It’s important to know what these are and how they can impact your finances before moving forward with the purchase. Here is an overview of some common expenses that come with homeownership:
– Homeowners insurance
– Mortgage fees (loan origination, appraisal fees)
– HOA dues
– General maintenance
The “11 hidden costs of buying a home” is an article that discusses the hidden costs that come with purchasing a new home. The article also includes some solutions for these hidden costs.
For most would-be homeowners, it may seem that all of the expenditures and anxieties of house buying occur up front: Saving enough money for a down payment, finding a real estate agent who understands the market, comparison shopping for the lowest commission real estate company, and deciding between innovative but unproven companies like Opendoor and Offerpad are all big factors in how much you’ll pay for your home.
But the fact is that closing on your dream house is merely the beginning of your financial commitments. We’re not even discussing mortgage costs. Various new homeowners are unaware of the many hidden expenses of homeownership, which may be a very unpleasant surprise.
Clever Real Estate has released a new research that looks at the hidden costs of house ownership and the impact these expenditures may have on new homeowners who may not understand what they’re getting into. Read on to avoid being another property buyer who gets more than they bargained for!
RELATED: What Does a 3% Real Estate Commission Mean?
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1. The typical homeowner in the United States spends more than $15,000 per year on their property, not including mortgage payments.
Many new homeowners are certainly aware that their property would incur different costs, but for a growing number of purchasers, the whole price is alarming. Every year, spending over $15,000 is the equivalent of purchasing half a new automobile!
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2. More than half of homeowners say the full expense of buying a house surprised them.
More than half of homeowners (52 percent) had no idea what they were getting themselves into when it came to the many fees that come with owning a home. That has likely played a role in the rise of buyer’s regret we’ve observed since 2019.
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3. The expense of homeownership is more likely to surprise millennials.
When compared to baby boomers, millennials are almost twice as likely to be startled by the price of housing. The majority of millennials (60 percent) said they were shocked by the price of homeownership, while just about a third of baby boomers (32 percent) said they were.
AaronAmat / iStock contributed to this image.
4. Homeowners are more nervous and agitated.
According to the current poll, 31% of homeowners are concerned or nervous about owning a property. This is up from just 24% of homeowners in the 2019 study who indicated they were worried or concerned.
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5. The majority of homeowners would purchase differently if they knew how much it would cost in the long run.
Surprisingly, 53% of homeowners believe they would have bought differently if they had known the true cost of owning.
42 percent of that group indicated they would have negotiated a better price or conditions, highlighting the value of hiring a skilled agent. Another 29% said they would have delayed to buy a home, while a same number said they would have just bought a less priced property.
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6. The majority of homeowners in the United States have experienced buyer’s regret at some time.
Six out of ten homeowners in the United States have experienced buyer’s regret. About 16 percent indicated they seldom experience buyer’s regret, 20% said it happens sometimes, and 25% said it happens often.
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7. On a more positive side, many homeowners have never had buyer’s regret.
While these figures on buyer’s regret may seem scary, four out of ten U.S. homeowners say they have never had buyer’s remorse.
bernardbodo/istockphoto/bernardbodo
8. Buyers during the Pandemic Era are particularly remorseful.
As a result of the epidemic, property values soared and large-scale migrations out of crowded metropolitan areas occurred, with city inhabitants purchasing properties in suburban and rural regions. Many of those purchasers are having second thoughts thus far.
39 percent of pandemic purchasers say they often have buyer’s regret.
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9. Upkeep irritates many people with buyer’s regret.
Many of the 60 percent of homeowners who have had buyer’s remorse say they regret how much care their property demands (39 percent).
Image courtesy of lisafx / istockphoto.
10. Since the epidemic, buyer’s regret has grown across the board.
Even those who bought a property before the epidemic are experiencing more buyer’s regret. Prior to the pandemic, 20% of homeowners reported they had buyer’s regret sometimes or often. That ratio has risen to 45 percent by 2022.
Only 5% of homeowners indicated they experienced buyer’s regret regularly in 2019. Since then, the percentage has risen to 25%. Meanwhile, the percentage of people who claim they’ve never felt guilt has plummeted from 65 percent to 40%.
Feverpitched/ istockphoto contributed to this image.
11. Many homeowners overspend on their homes.
Housing is considered inexpensive if it costs less than 30% of your total family income, according to experts. However, almost half of questioned homeowners (45%) spend more than that on their property.
16 percent of individuals polled spend 31 percent to 40 percent of their gross income on housing, while 29 percent spend 41 percent or more.
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12. The number of homeowners who spend more than 40% of their income on housing has increased.
Only 16 percent of homeowners spent more than 40% of their whole income on housing in 2019. By 2022, the percentage of financially challenged owners will have almost doubled to 29%.
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13. Almost three-quarters of homeowners are dissatisfied with their house in some way.
A staggering 72 percent of homeowners polled expressed dissatisfaction with at least one feature of their house.
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14. Maintenance and related expenditures are two of the top three causes for discontent.
The most prevalent cause of homeowner regret is because their house demands too much upkeep (40 percent ). Dealing with the hidden expenses of homeownership is the third most popular cause (30 percent ). Taken together, this indicates that many purchasers are unaware of the investment requirements of homeownership.
istockphoto/ronstik is the source of this image.
15. Almost a quarter of people are upset because their house has depreciated in value.
Surprisingly, 24% of homeowners expressed dissatisfaction with their home’s depreciation in value. This serves as a reminder that the benefits of today’s thriving property market have been allocated unequally.
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16. The vast majority of homeowners believe that owning a house is difficult…
Homeownership is a hardship for three-quarters of homeowners (75 percent).
Dragana991/istockphoto contributed this image.
Only a tiny number of people believe that owning a house isn’t worth the effort.
Only one in eight people believe the advantages of owning outweigh the drawbacks. This shows that some criticisms are really harmless venting and that, despite the inconvenience, most homeowners are happy with their choice.
fizkes/istockphoto contributed this image.
18. The most common reason for property purchases
The most frequent reason respondents indicated they purchased their house (52 percent) is perhaps the best: it’s a solid investment.
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19. The second most common factor for house purchases was practicality.
About 42% of respondents said that they purchased a property because they want or need extra room.
This finding illustrates how the epidemic, which saw more people locked up at home, may have given some individuals an additional drive to go shopping. Meanwhile, one in seven homeowners (14%) claimed the ability to work from home influenced their decision.
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20. Some purchasers took advantage of the strong market.
A little more than one-fifth of those polled (21%) said they were motivated to purchase because they wanted to get into the market before it became much more difficult. If some of these purchasers weren’t ready for the responsibilities of homeownership but hurried to buy because they were afraid of being priced out, this might be contributing to the growing levels of buyer’s remorse.
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21. The typical homeowner spends more than 200 hours per year on house maintenance.
According to the Clever study, the typical homeowner spends around 19 hours per month on house upkeep and upgrades, totaling about 230 hours per year – nearly 10 days.
Consider that the typical American receives just 10 vacation days each year. They spend the equivalent of that caring after their property if they possess one!
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22. Home upkeep is a chore for little over a quarter of homeowners.
About 21% of homeowners spend more than 30 hours each month on house upkeep and upgrades, which is nearly a full workweek.
Only 3% of homeowners spent that much time on their home in 2019, implying that individuals who spend more time at home, like we did during the epidemic, simply discover more things to mend.
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23. Almost every homeowner spends at least five hours each month on maintenance.
Nine out of ten homeowners (90%) spend at least five hours per month on upkeep and upgrades, implying that one out of every ten homeowners is content to let nature (and depreciation) take its course.
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24. Pandemic purchasers devote a significant amount of effort on property upkeep and upgrades.
Homeowners who purchased since the beginning of 2021 spend an average of 23 hours per month on maintenance. This is 21% more than the national average, indicating that many home purchasers purchased fixer-uppers or are discovering more items that need to be fixed.
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25. Many house purchasers will be exempt from inspections in 2021, which might lead to higher maintenance costs.
According to a poll conducted by the National Association of Realtors (NAR) in 2021, 19% of purchasers waived the house inspection contingency, meaning that they just intended to finalize the sale regardless of any concealed issues. The fact that elderly buyers spend much more time on home upkeep than other purchasers shows that skipping a house inspection will just result in extra labor later.
AndreyPopov/istockphoto contributed this image.
The typical homeowner spends slightly over $3,000 on upkeep and repairs each year.
Maintenance costs the typical homeowner $3,018 per year, not counting emergencies, which can mount up quickly.
Furthermore, one-third of homeowners (33%) spend $5,000 or more every year.
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27. However, the share of those who spend a lot more money is rising.
Only 6% of homeowners spent more than $10,000 on house upkeep and repairs in 2019. This number has more than quadrupled to 20% by 2022.
Rawpixel / istockphoto contributed to this image.
28.5% of homeowners were on the high or low end of the maintenance expenditure scale.
One out of every five homeowners spent a lot or very little on house maintenance: 13% spent less than $500 per year, while 7% spent more than $20,000 per year.
DepositPhotos.com provided the image.
29. Millennials were far more inclined than baby boomers to spend a significant amount of money on upkeep.
Millennials were almost three times as likely as baby boomers to spend more than $5,000 per year on maintenance and repairs (42 percent vs. 15 percent). Are millennials purchasing more fixer-uppers, or do they just have higher expectations for their living quarters?
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30. One of the least costly house repairs is the most prevalent.
The most popular house repair, according to homeowners, is painting (49 percent). Painting is one of the few large jobs that can be completed successfully by a novice, as well as one of the most cost-effective house improvements.
Image credit: istockphoto/gorodenkoff
The next three most prevalent, on the other hand, are among the most expensive house repairs.
Following painting, major appliance repair (which 46 percent of homeowners have had done at some time), plumbing (46 percent), and electrical (41 percent) — all of which need the use of experienced specialists and huge sums of money — follow next.
courtesy of istockphoto/dima sidelnikov .
32. The majority of homeowners pay for routine upkeep.
Pest control (38 percent of households), landscaping (35 percent), housekeeping (34 percent), tree trimming (33 percent), gutter cleaning (30 percent), and pool maintenance are among the most common recurrent services (25 percent ).
While the majority of these services are required, the monthly or weekly fees may quickly mount up.
Deposit Photos provided the image.
33. HOA fees are paid by almost a third of homes.
A homeowners association is paid by around a third of homeowners (31%). These costs often range from a few hundred dollars per month to several thousand dollars per year.
Photo credit: istockphoto / Photobuay
34. The majority of homes could not afford a $5,000 emergency repair.
A concerning 57 percent of households do not have $5,000 on hand in case of an emergency repair. What is the most usual way of payment in the event of an emergency? Thirty percent of those polled indicated they’d charge it to their credit card.
Image courtesy of vicnt/iStock.
35. A large number of homeowners have very little money saved.
According to the Clever poll, one out of every five homes has less than $1,000 in emergency cash, and one out of every seven has less than $500.
Image credit: istockphoto/designer491.
36. Home improvement expenditure has grown as a result of the epidemic.
Since 2019, the number of homeowners who spent at least $10,000 on home upgrades has almost quadrupled, increasing from 10% to 18%.
Furthermore, 32% stated they spent at least $5,000 on house upgrades in the previous year.
shironosov/istock image credit
In 2021, one in every twelve homeowners spent more than $20,000 on house upgrades.
Approximately 8% of homeowners are large spenders, spending more than $20,000 on significant expenditures such as repairs and remodeling.
Image credit: iStock/yunava1.
In the next five years, almost all homeowners want to undertake a home repair project.
Nine out of ten homeowners questioned (93%) indicated they want to do a significant home renovation project in the next five years.
Outdoor improvements, such as landscaping, fence, or yard upgrades, were the most popular projects planned by respondents (43 percent), followed by installing or refurbishing a patio (37 percent ).
DepositPhotos.com provided the image.
39. The most popular interior home remodeling projects were…
The most often mentioned projects inside the house were new flooring (36%), a bathroom makeover (31%), new windows (29%), a kitchen redesign (27%), and a bedroom or living room remodel (27%). (25 percent ).
Image credit: iStock/Nortonrsx
Nearly a quarter of homeowners who aren’t planning improvements can’t afford it.
18% of respondents who indicated they had no intentions for house upgrades stated they simply don’t have the funds. Other reasons for deferring renovations were rising prices (15%) and pandemic delays (14 percent ).
Depositphotos provided the image.
41. Homeowners pay far more for utilities than renters.
The typical renter pays $2,866 on utilities per year, compared to $4,829 for homeowners.
Because the typical house is substantially larger than the average apartment, it is more expensive to heat, cool, and light.
RossHelen/ istockphoto contributed to this image.
42. Property taxes and homeowner’s insurance are significant unexpected expenses.
The typical homeowner spends more than $4,000 per year on taxes and homeowners insurance. That’s a hefty bill to get.
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43. However, if you’re prepared to relocate, those charges may be minimized.
Property tax rates and homeowners insurance prices, on the other hand, vary greatly throughout the nation.
The most costly tax states are in the Northeast, with New Jersey leading the pack with an average property tax bill of $8,400.
Which state has the least expensive average property tax bill? Alabama has the lowest average bill in the country, at just $609.
Insurance prices follow a similar pattern. Colorado has the highest annual homeowners insurance rates, averaging $3,383. Delaware, on the other hand, has an average yearly premium of just $781.
MediaFeed.org syndicated this story, which first appeared on ListWithClever.com.
Supawat Bursuk/istockphoto contributed to this image.
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AlertMe
The “expenses after buying a new house” is the money that you need to spend on things such as furniture, appliances, and other home improvements.
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