Real Estate Tip of the Week: Planning for Extra Costs
Ever heard of buyer’s remorse? We’ve all experienced it at some point in our lives – the sense of regret after having made a purchase. Maybe it was buying that car, that TV, or that really cute sundress you saw in the window.
Or, maybe it was the purchase of your new home. Ouch. That one might be harder to deal with.
If you’re a real estate agent, it would be in your best interest to help and guide your clients to fully understand all of the fees that are associated with owning a home, so your clients feel prepared and ready for the transaction.
According to a new survey from Bankrate, 63% of millennial homeowners – more than any other generation – expressed buyer’s remorse after the purchase of their homes. 20% of those with remorse were surprised by maintenance expenses and other costs corresponding to the transaction.
While these fees will vary from person to person and state to state, it’s important to clarify the costs on the table so they don’t feel misled.
While these aren’t required, they are highly recommended in the industry. An average inspection may cost anywhere from $300 to $500. Inspections can help uncover any problems with the home and prevent more costly repairs in the future.
Financial experts recommend setting aside 2-5% of the purchase price for closing costs, and they must be available on closing day. This fee covers a variety of things, like notary services, title company search fees, attorney expenses, real estate transfer taxes, insurance premiums, and more. These will vary by state and property.
It is recommended to put aside 1% of a home’s value per year for any unexpected maintenance expenses. For example, a $300,000 home would mean budgeting $3,000.
While this might be the last thing on your client’s mind, moving adds up too. If they’re planning to hire a moving company or renting a truck, they’ll want to allocate this into their upcoming expenses. As a real estate agent, you’ll need to remind them to speak with their lender and bank to fully understand their financial planning. But, that doesn’t mean you can’t help guide them on some of the upcoming fees associated with purchasing a home.