If you are a first-time home buyer, you have learned through the loan qualifying process some basic real estate terms and caveats. You understand the meaning and importance of PITI and know that your mortgage payment should not exceed 33% of your income. What you may not realize, however, is that there are many hidden costs associated with the purchase and ownership of Greenville NC real estate.
Maintenance, repairs, supplemental insurance, additional taxes, home improvements, and decorating can add up to thousands of dollars more than you expect. And then there’s your moving expenses, closing costs, home association dues, trash collection fees, and perhaps utility bills which are higher than you’re used to paying. Should these expenses dissuade you from buying the Greenville NC real estate you’ve decided on? Absolutely not! But you certainly should plan ahead in order to spare yourself unexpected and unpleasant surprises.
Most Realtors urge first-time buyers to anticipate the costs of desired improvements/repairs, set up a budget and a realistic timeline, and establish a “rainy day” fund to help cover the costs of the unanticipated expenses, such as a broken heat pump or a leaky roof. Eric Tyson, co-author of Home Buying for Dummies, recommends setting aside at least 1% of the purchase price of your Greenville NC real estate each year by putting 1/12th of this amount into the fund monthly.
The first step in anticipating additional expenses is to know your house well. How old is the roof? The heating system or air conditioning unit? The appliances? Being aware of the age and condition of these items allows you to predict when they might need replacing. Check into house insurance before buying. Do you need protection against flooding or any other catastrophe? Look for a policy with a deductible that fits your needs and include this item in your budget. Is your house in need of better insulation and therefore likely to have higher utility bills? What is the condition of the plumbing? Could small leaks result in a larger water bill?
Although one of the joys of home ownership is the ability to improve it any way you want, without a landlord’s permission, be cautious about undertaking too much at once. A major kitchen or bathroom redo can cost thousands--and often far more than you planned for. Even painting the exterior of your Greenville NC real estate usually costs around $800. So proceed with a level-head and patience.
Above all, be aware that no matter how well you have planned and prepared, at some time or another your car’s transmission will go or the sewer line will break--events for which you do not have the money. Financial advisors suggest that you do not use a credit card to pay for these things because of the high interest rates; it’s better, they say, to liquidate a savings account on which you receive little income.
Do remember that although you will most likely face unexpected expenses--and almost always at the worst possible time--they do not outweigh the advantages and pleasure of owning your own home!
Whether you are considering buying a home, selling a home or both, Liz Freeman knows the Greenville, North Carolina area inside and out. Most of her team members were born and raised in Pitt County, NC which has provided them with strong ties to the area, allowing them to become a successful Greenville NC real estate team.
Liz Freeman and her team have distinguished themselves as leaders in the Greenville NC real estate market. Liz assists buyers looking for Greenville NC real estate for sale and aggressively markets Greenville NC homes for sale. Liz is also a Certified Distressed Property Expert (CDPE), avoid foreclosure and short sale expert, committed to helping families in financial hardship find options to foreclosure. For more information you can visit Liz Helps.com. You can reach Liz by filling out her online contact form or give her a call.