Unexpected Expenses when Buying a First Home

Unexpected Expenses when Buying a First Home

Home-buying for first-time buyers can be a daunting task with numerous extra expenses involved that can shock the buyers for a time. Slowly and steadily they get to know that down payment is just not the cost that they have to pay, instead home buying brings countless expenses with it.

Home-buying for first-time buyers can be a daunting task with numerous extra expenses involved that can shock the buyers for a time. Slowly and steadily they get to know that down payment is just not the cost that they have to pay, instead home buying brings countless expenses with it. You should be aware and prepared for home-buying costs before you sign on the dotted line. Home-buying costs can add up fast - and can even be startling.

Many first-time homebuyers are surprised by the following costs - but only if they are not prepared.

1. Earnest money you are not aware off. 

An earnest money deposit is required for the purchase of a home. This demonstrates your commitment to the purchase. As long as the contract is approved, the money will be applied to the down payment and closing costs. There are several contingencies in place in case the contract fails. Simply deciding you don't like the house no longer isn't a valid reason for backing out of your contract, so always read over any contract carefully before putting down your earnest money.

2. Appraisals and Inspection needed before home buying. 

Appraisals and Inspections are two important parts of home-buying that you can't avoid, nor do you want to.  You and your lender benefit from appraisals because they ensure an accurate asking price. Appraisals cost buyers hundreds of dollars - although this may be negotiated with the seller.


Inspections offer additional security for home buyers and are separate from the appraisal process. They can prevent unpleasant surprises like termite infestations and leaking pipes. It is vital to know about these issues before closing because they can influence your purchase decision and give you bargaining power. Sometimes, you can ask the seller to fix these issues before closing or negotiate a better asking price. Home inspections are typically paid by the buyer at closing.

3. Home insurance is mandatory. 

Insurance is the most important yet complicated part of the home but this is something that you can't avoid in anyways. It can be divided into three categories homeowners insurance, mortgage insurance, and supplemental insurance. 

Homeowners insurance is a necessity for every homeowner. As well as covering your possessions, it ensures that you are not liable for any damages. Many lenders require homeowners insurance before they will approve your loan, so you'll need to purchase one year's coverage beforehand.

4. Utilities you might not be aware off. 

In rented homes, you get a lot of things like the connection fees of electricity or gas and more free of cost because that's what is already added. But when you are owning your home then these expenses are paid by you only and you will be responsible for paying set up fees, monthly bills, and more for electricity, gas, water, sewage, trash, recycling, TV, and the Internet. 

5. Continuous maintenance and updates in home. 

Maintenance is the key component of anything you invest money. Just for example, if it is about you, then you also provide essentials to your body like vitamins, minerals, and more. Similarly, the home you own will be needing maintenance, repairing, and improvements by time and according to your comfort. You will need ACs, Heaters, a modular kitchen, and more appliances making living easy. 

 These are some of the unexpected expenses in the first time home purchase that many home buyers are not aware off, or these get avoided, but can cost you seriously high.