Buying a Home

5 Costs to Consider When Buying a Home

by Ruhl&Ruhl Realtors

Home prices are on the rise nationally. Record low inventory coupled with high demand is pushing prices up.

If you’re looking to buy a home remember that there are additional costs beyond the selling price and it’s important to weigh all the “little extras” when determining your budget.

Here are some top costs to consider while you are in the home buying process. But you can rest assured that your Realtor will help you every step of the way.

Hiring a home inspector

Home inspections, are a great resource for you when buying your home. Once you’re under contract, you want to make sure your dream home is as perfect as, well, you dreamed it would be. Hiring a home inspector gives you the opportunity to find out if there are any little problems you can’t see with your own eyes.

A thorough home inspection can identify current and potential problems, or, better yet, give the home a clean bill of health. But it is not free. The average home inspection costs $323 according to HomeAdvisor’s True Cost Guide but can be higher depending on your market.

Some inspections are not always included in your basic inspection costs such as termite and radon inspections. Some buyers even choose to hire specialists like an arborist to inspect the health of your trees.

Just because an issue is flagged on your inspection, does not mean your seller will need to fix this before closing. Ultimately it is up to you to determine what you want to be addressed once you receive your inspection report but your Realtor has seen it all and can help guide you.

You can pay for inspections directly or have them bundled into your total closing costs.

Other closing costs

Simply put, closing costs are what you pay all the people who have been working behind the scenes to make your home purchase happen.

“Closing costs, which can include agent fees, hiring an inspector, or flood zone insurance, can add up during the home buying process,” says housing economist, Felipe Chacon.“Additionally, there are other costs you don’t think of,” he says.

Closing costs also cover various fees: the appraisal fee, the credit report fee, title insurance fees, and government recording fees, to name a few. Buyers receive a sheet itemizing all the costs, so there are no surprises, but all in, they typically run an additional 2% to 5% of the home’s purchase price.

Property taxes

Once you’re in your new home, you’re also responsible to pay into your new municipality’s tax pool. Property taxes are often added to the mortgage so the buyer doesn’t have to worry about paying a separate bill each quarter. But remember, property taxes aren’t a fixed cost—and they go up more often than they go down—and even if you pay off your mortgage, you still have to pay those taxes.

If taxes seem high, you can ask if the taxes have been appealed or revalued and hopefully, they can be reduced. To get more information you can reach out to your municipality’s tax office.

Tax laws and practices vary around the country, so it’s important to do your research, especially if you are moving to another state. The average annual property tax in the U.S. in 2020 was $3,719, according to research from ATTOM Data Solutions. That’s an effective tax rate of 1.1%. The states with the highest property tax rates are New Jersey (2.2%), Illinois (2.18%), Texas (2.15%), Vermont (1.97%), and Connecticut (1.92%). The states with the lowest property tax rates: Hawaii (0.37%), Alabama (0.44%), West Virginia (0.51%), Colorado (0.54%) and Utah (0.54%).

“There are other costs you don’t think of,” says Chacon. “Some percent of the home’s value will go into maintenance,” he says, and “that’s almost like a fixed-cost where you pay to keep up with little problems.”

The most common home improvements after buying a home are installing a wooden fence, which costs an average of $2,706; landscaping, which runs an average of $3,316; and building a deck, to the tune of about $7,010, according to HomeAdvisor’s True Cost Guide.

For more information on local statistics and information… Contact a Ruhl&Ruhl Realtor. They are your best source for local, trusted information on any costs you may need to incur during the buying or selling process.


Published in 2019 and updated in Dec. 2021.

Next Article

Ruhl&Ruhl Realtors Celebrates 2021 – Best Year Ever

Ruhl&Ruhl Realtors celebrated 2021 at their annual awards event on January 28th. Chris Beason, President, and Caroline Ruhl, CEO, honored 218 award winners for their 2021 achievements.  Over 300 agents, staff, and affiliated...

Previous Article

Inside Look at the Life of a Real Estate Agent

In a previously recorded podcast, we sat down with Bettendorf sales manager, Matt Schwind, to uncover his motivation for becoming a Realtor. His “why.” Although Matt no longer sells, he shares with us what initially drew...