What is the True Cost of Home Ownership?

Real Estate Agent with The Buyers' Counsel

What is the True Cost House with flying moneyof Home Ownership? 

Most potential homeowners begin their planning with the down payment and monthly mortgage amount in mind.  It's an excellent start but anyone who is planning on buying a home needs to be ready to take on the total costs and look beyond the mortgage payment.

If you want to effectively determine a home's affordability you also need to consider the following:  

  • Real Estate Taxes
  • Insurance
  • Home Owners' Association Fees
  • Landscaping
  • Maintenance costs
  • Electric Bill
  • Gas or oil expense
  • Trash removal charge
  • Water & sewer bill
  • Snow plowing costs
  • Miscellaneous expenses

There is no obligation in most states for the seller to provide the costs of utilities to a potential home buyer (although the State of Hawaii has now made this mandatory in real estate transactions.)  The responsibility falls to you or your buyer agent to request the utility costs and copies of the electric bills from the owner.

Maintenance costs will fall into the categories of ongoing and occasional.

Ongoing items include changing the filters in your heating system and air conditioning units, furnace maintenance, gutter cleaning, and chimney sweeping, recaulking your bathroom and blacktopping the driveway.

Occasional maintenance items are repainting, replacing the roof, recarpeting, replacing appliances, refinishing hardwood floors, repointing masonry work and an assortment of repairs that can crop up from time to time.

As a homeowner you should keep a running tally of all the items that you replace and maintain along with the cost of your heat and other utilities. 

A smart buyer may very well ask for it.

Copyright 2010 "What is the True Cost of Home Ownership?  "

Written by

Claudette Millette, Broker, Owner, The Buyers' Counsel - (508) 881-6230

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Comments (59)

Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Claudette, good information every prospective homeowner should know. There is more to ownership than just the mortgage payment.

Sep 09, 2010 02:48 AM
Gerry Michaels
Glasswork Media Arts - Gettysburg, PA
GettysburgGerry Social Meida

Claudette, good points, I find almost all new homeowners forget to factor in the inevitable maintainence costs...

Sep 09, 2010 02:52 AM
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

A house is a depreciating assett. Roofs, air conditioners, furnaces, hot water heaters, appliances etc. have limited life expectancies. Every year they wear down and one needs to accumulate a reserve fund to meet these eventual expenses.

I chuckle when buyers say that they want a house instead of a condo because they don't want to waste their money on those montly HOA fees.  I make them realize that a house has those same fees, and they're probably more.  But instead of being a monthly mandatory fee, you get "assessments" when you least expect it.  You are the single member of your "HOA" and you better run it like one with a budget and reserve fund for contingencies. 

Sep 09, 2010 03:18 AM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Claudette...good post. I beleive it is our responsibility to point out and counsel these things so that they the buyer understands the big picture and the long haul application. Between the purchase and the paying off of a home, a lot can take place.

Sep 09, 2010 03:29 AM
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass


Yes, there are additional costs but I think they are worthwhile when you consider the quality of life that comes with home ownership.


Indeed - PITI and then some.


I think that is because we would like to forget those pesky maintenance costs. I know that I keep those in the back files of my mind - like hiring someone to clean out the gutters on a regular basis.


I hope a house is still an appreciating asset.  Or, it will be again be again soon.


I think it is incumbent on us to at least make first time buyers aware of these additional expenses.


Sep 09, 2010 03:37 AM
Russell Lewis
Realty Austin, Austin Texas Real Estate - Austin, TX

Excellent points! Home ownership involves a lot of responsibilities but it's also a privilege that is well worth it! Oh...and thanks for the reminder about cleaning the gutters, That is my next phone call ;-)

Nice to see your post on the front page!

Sep 09, 2010 04:41 AM
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass


That gutter cleaning is one that is easy to forget (and I often do.) But it is definitely that time of the year.

Thanks so much.


Sep 09, 2010 05:14 AM
Dee Bundy
Fort Collins Realtor @ C3 Real Estate Solutions - Fort Collins, CO
Helping You Make Colorado "Home"

Love it, reblogging it.  Glad it was a feature - it needed to be!

Sep 09, 2010 05:18 AM
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass


Thanks for reading - and reblogging.


Sep 09, 2010 05:21 AM
Brigitte Archer
Oxford Capital - Lake Forest, CA

Great post! Often times I blog about the true cost of home ownership. I think its very important for potential buyers to consider the additional costs associated with owning a home, especially if they are first time home buyers going from renting to owning. A lot of the additional costs are not even considered sometimes. Keeping a realistic perspective is crucial!

Sep 09, 2010 06:33 AM
S. Leanne Paynter ☼ Broward County, FL
United Realty Group, Inc. - Davie, FL
Davie, Plantation, Cooper City & Weston Specialist

In my area, you can call the utility company to find out what the utility bills have averaged over the past year.  Not many people know that, though.

Sep 09, 2010 08:03 AM
Bryan Robertson
Los Altos, CA

I tend to deal with larger homes and often get the question regarding maintenance and utilities.  This is especially true of homes with multiple heating and cooling zones.  I had a listing with close to 6000 sq. ft. with two zones.  It was a "green" home and as such didn't take much to heat and cool.  However, buyers will all cash, not concerned with money per se, all asked about the cost of heating and cooling.

The other one I get asked about a lot is landscape maintenance.  It doesn't seem to matter if it's a 1/4 acre or a full acre, the cost associated with keeping up the landscaping is a common question.

Disclosures on these are not required in Silicon Valley but most good agents have answers for the questions.

Sep 09, 2010 08:36 AM
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass


The local utility companies around here will usually not give out that information.  They will only give it to the actual subscriber or home owner.


Heating, cooling and landscaping are all pretty universally important. In this area we need to also answer the question of snow removal costs.


Sep 09, 2010 09:04 AM
Gail C. Harris
Resource Network, LLC SFR, AHWD, ACRE, SMAR Board Director - Chesapeake Beach, MD
Reach the BEACH with Gail C. Harris (cell: 703.868

Yes, you're right.  Personally, I keep track of everything.  Our utility companies do give out all information regarding the cost of utilities to anyone who asks.  Odd, I would think that's privileged but it's not.  Great post.  :) Gail

Sep 09, 2010 09:29 AM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Claudette, great list, and as a reminder to a Landlord/Owner too when factoring out their NET in an investment those items need to be taken into consideration too and often put them in NEGATIVE cash flow. Renting by a tenant is often better than owning if they have a short term focus or are cash strapped or income strapped.

Sep 09, 2010 09:32 AM
Elliott S. Topkins
Topkins & Bevans-etopkins@topbev.com - Boston, MA
Massachusetts Real Estate and Title Atty

Claudette--This is a powerful post and one which should be "must" reading for potential Buyers. It goes into the category for me of "can you REALLY afford this home", which is a big part of what a good Buyer's Agemnt like you shoul be reviewing. It has been my experience that people who really stretch to buy, have no reserves when some maintenance item comes up. That is the beginning of the downward spiral.

It is thinking like this which puts you in the "non-stereoype" category for my recent post aout real estate caricatures.

Sep 09, 2010 09:53 AM
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass


Yes, I think that varies with utility companies. Here they seem to feel that it is privileged information. You are so organized to keep a record of everything.


I agree for a short term, renting may be wiser but for the long term I think that owning is the best choice even with these additional expenses.



Sep 09, 2010 10:48 AM
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass


I appreciate that comment very much.  Yes, I do care about more than just getting a commission check. I just checked out your post on caricatures. I actually think there are quite a few of us who care about our clients. You do not get repeat business and referrals if a client doesn't feel cared for.

I think it works the same way with attorneys.



Sep 09, 2010 10:56 AM
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Hi Claudette, This is such good information.  Often buyers fail to figure in the additional costs in maintaining their home.  I thought our dishwasher was broken yesterday...appliances just don't live forever!  Luckily, we fixed it and I think it has a few good years left!

Sep 10, 2010 02:54 AM
Diane Williams
Pell City, AL

Claudette, the hidden cost to maintaining a home can run into hundreds every time we turn around.  Excellent post to share with first time buyers so they can have a better understanding of the cost of home ownership. 

Nov 26, 2010 10:58 PM