10 Simple Tips to Take the Stress Out of Home Buying Process - Focus on the Positives!

Tip 2: Create a Budget before you Move into Your Home

There are a number of other costs you need to consider before you buy a home. It never fails...we think we have thought of everything, and lo and behold, we didn't. Hopefully you find some helpful ideas that you can use to create a budget of expenses beyond the down payment and closing costs.

Storage

You may not be a pack-rat, but every time people move (about once every 5-7 years) they notice that their moving truck gets larger and larger. We've all done it...accumulated more than we remember, not thrown things away, or even gone thru the hall storage. We've become part of the lifestyle of inflation; wanting more than we need, buying more than we have room for, and keeping it because "we may need it someday". While a storage unit may be something you need while your current home is on the market, to make the home appear larger and less crowded, is it really necessary after the move? This may be something you need to budget for unless you are willing to donate or pitch...being willing to accept this is not something you need just to pay for it and never see the items you never use anymore...because they are in Storage. A knowledgable Realtor may be able to direct you to different options, so keep that in mind.


Packing Materials


Start collecting boxes early on from stores for free. Check out Craigslist for those that have recently moved, or ask your Realtor if they have a client who may need to get rid of their used boxes. It seems as much as we plan, the need for more boxes overtakes our budget. Many of the boxes you may be able to resell after your move if they are still in good condition, which partially makes up for the costs that sneak up on you. U-Haul has colored packing tape that identifies different rooms that makes it easier when moving in. Bubble wrap and packing paper will be needed as well.


Moving Expenses

Your stuff doesn’t get to the new house on it’s own!  Do you hire a moving company?  Maybe you try moving yourself, but you may still need to rent a truck. Moving costs can easily cost you anywhere from a few hundred to a couple of thousand dollars depending on your situation. Certainly by now you know a Realtor or are working with a really good Realtor who has all these resources and contacts in their Rolodex. Their list of contacts should include all these tips, points, thoughts, and any answers you may ever need for your questions. A Realtor deals with people moving every day! Who better to ask!

Utilities & Transfer Fees
  

Most utility companies now have the option of transferring services online or over the phone without having to talk to a representative. However, overlapping service by a couple of days isn't as easy to turn service on and off, so you may end up speaking with representatives.

Cable/Telephone/Internet Services: Will these services cost more than where you previously lived? Will you need any new equipment? Will you have it in more rooms in the new home (such as more cable boxes)?

Water, trash and sewer services: These may not be an items you think of often, especially if you lived in an apartment because these were just part of your rent. In owning a home, these most likely will be included in your water bill, which is another utility most buyers don't think of when it comes expenses. Leaky faucets will now be your problem once you are a proud homeowner, which will make you keenly aware of the true costs of living in a home.

Energy Costs: Make sure you understand what the various energy costs are before you buy. Check with the local utility companies for average costs for both winter and summer.

Alarm: Will you be getting an alarm? Will it be a monthly service? Here’s another cost that could be recurring monthly.

New Locks: You may want to hire a locksmith to change all of the locks in your new home. There’s no telling how many copies of keys are out there already!

Odds are you are moving to a bigger home.  Do you have the furniture you need, for example: are you moving from an eat in kitchen to a home with a formal dining room? You don’t have to buy this all at once but you may be tempted to fill in empty spaces.

Appliances: Do you have all of the appliances you need?  Perhaps some need upgrading? If the ones you currently own are old, they may be using twice as much electricity as newer, energy-saving ones.

Gardening, Lawn & Landscaping

While you may be thrilled to be inheriting a lawn, have you the equipment the maintain it? How about shrubs and gardens? Can you handle the work? Will you need to buy or rent equipment, such as a mower? What does it cost to hire someone to handle the landscape? The previous owner may be able to give you an idea of the costs as well as refer you to the company they used. Find out if there are local ordinances about grass height and what you are allowed to grow as well as water usage for your lawn. What you may not anticipate is the cost difference in utilities for maintaining a lawn. Your water bill could increase substantially while trying to keep the lawn green. As a Realtor, I have a lawn service I have used for vacant property listings that I could possibly refer you to as well.


Insurance Increase

If you were a renter, you most likely carried renter's insurance. Many buildings and landlords require insurance since they aren't responsible for a tenant's personal belongings. When you call your insurance provider to discuss the purchase of a home, your agent will review your premium since now you will be a homeowner. If you have owned a home before, the premium will probably be different as well, since it is calculated on value of the home. In the process of discussing with your lender the home you have chosen, they, as well as your Realtor, should be able to direct you to insurance companies that are able to provide good rates.

 

Carpeting – Clean or Buy New?

Your new home may have nice wall-to-wall carpeting but when was the last time it was cleaned?  Perhaps it's not quite the color you want or it's showing some wear and tear.  You can go cheap with carpeting but sometimes you get what you pay for and this is your home. Always remember, buy the best pad available. Your Realtor could possibly write in the contract that the carpets be professionally cleaned. If that isn't accepted, your Realtor surely has a reputable carpet cleaner that they could refer you to. Don't hesitate to ask these questions.

Spackling and Painting

If you are fortunate, your new place will be all done up and have all the picture holes spackled and the rooms freshly painted. But many homes will still have minor dings here and there that need repair and fresh paint doesn’t mean you like the color. We all know it's easier to paint when there’s no furniture in the room. So do you repair and re-paint?  Do you hire people or do it yourself?  DIY will still cost you and depending on how much work needs to be done your costs can easily rise. You may shove this idea off as paint is cheap, which it is, but the supplies cost too. These are cosmetic things that need to be taken into consideration since they will be your costs. Hopefully your Realtor has names of reputable contractors that are looking for the next job.

Additional Car

Are you moving somewhere that you will need another car?  Is public transportation or walking out of the question now?  Think about your location and your needs when you are looking to move and figure out if you will need another car.  If you do, remember you will also need additional car insurance and you will have more maintenance costs as well. This isn't one most people think about, but it is something to think about.

I don’t mean to scare you with all of these items, but they do need to be considered before you buy a new home. These may not all apply to you but you can see how quickly costs can run up!  When preparing your budget for a new home make sure you take into consideration all of the other costs you may incur.

Next...Tip #3: Keeping Emotions in Check...