First-Time Homeowner? Expenses That May Catch You By Surprise

Your favorite real estate listing app may have a handy “monthly cost estimator” feature that claims to show you what you can expect to pay for each home you see. However, these lists are far from all-encompassing, often overlooking many essential expenses that tend to catch first-time homebuyers by surprise. Don’t let that be the case with your first home! Take into consideration the following unexpected costs of first-time homeownership that many buyers fail to plan for. 

Legal, Tax, and Service-Related Fees

As you will soon learn, various parties and entities are involved in your home buying process, from county tax assessors to notaries and mortgage lenders. The services they offer (or require you to get) come with a price you will typically pay upon closing. A few common ones include: 

  • Appraisal and survey fees: Mortgage companies want to know the most up-to-date value of the home and the property it’s on, so you may be required to pay for an appraisal or survey before they approve your loan. 
  • Home inspection fee: Though not typically required, a home inspection can occur after your offer is accepted. An inspection helps you catch any foundational or esthetic problems before finalizing the purchase, enabling you to negotiate repairs accordingly. Though inspections aren’t free, the savings they can generate mean they often pay for themselves. 
  • Utility hook-up fee: Once the home is officially yours, the seller will typically cancel the utilities in their name. You will have to set up everything in your name, from water and sewage to gas and electricity, often for a marginal fee. 
  • HOA fees: If there’s a gap between when you finalize your home purchase and when you move in, the seller will usually continue paying the HOA fees during that time. Since the home is already yours, you may be required to reimburse the seller for these fees. Additionally, HOA fees will be your responsibility upon closing. 

Closing costs

Somewhere between getting approved for your mortgage and receiving the keys to your first home, you’ll face the notorious expenses referred to as “closing costs.” These costs include mortgage interest, escrow fees, and title insurance (a one-time payment rather than an ongoing expense). 

Make-ready costs: 

Once the staging furniture is gone, and the keys (and title) of the property in question are officially in your name, there’s still a lot of work left to do! The expenses involved in turning an empty house into a cozy home are often the ones that catch most first-time buyers by surprise! Take these costs into account to avoid being blindsided by them.

  • Relocation: Moving from an apartment or condo to a home can get expensive, particularly if you require professional movers to get the job done. Make sure to contact a few moving companies to get different quotes and options. Also, consider budget-friendly DIY options such as renting a moving truck yourself or commissioning the help of friends and family. 
  • Landscaping: If you’ve never lived in a house with a yard before, you’re in for a fun time — lawn games, patio sets, and even a convenient spot to let your pup out. However, yards require maintenance, too, from landscaping and sprinkler installation to mowing, raking, and tree care. Accordingly, GJ Gardner recommends budgeting 5-10% of the cost of the house to go towards initial landscaping costs. 
  • Renovations: From re-doing the dated backsplash to installing new sink ware, remember to budget for all the seemingly minor tweaks you want to make upon move-in. No matter how small, DIY home improvement projects add up quickly! 
  • Appliances: “Washer and dryer do not convey.” You may see this or similar statements at the bottom of your home’s listing page. Keep in mind that anything that does not convey, you’ll have to purchase yourself! For that reason, you should plan on purchasing (or even renting) essential appliances to make yourself comfortable in your new home. And don’t forget to factor in the cost of installation! 
  • Furniture: Another essential thing to consider when moving from a rental apartment to your first home is that you’re likely to have a lot of square footage to furnish! And the thing about furniture is that, while you can get low-quality items for cheap — they won’t look good or perform well in the long run. On the other hand, if you prefer high-quality, well-designed furnishings, you’ll tap out your budget quickly. If you want to strike a balance between affordability and quality, finding previously-rented furniture at clearance prices can be a great way to go.

Insurance costs: 

Buying your first home is one of the best ways to build wealth! As one of your most significant investments, it’s advisable (and sometimes required) that you protect your new house with different types of insurance. Unlike fees and closing costs, the forms of insurance mentioned below are recurring expenses that you’ll typically need to pay as long as you own the home. 

  • Homeowners insurance: Lenders often require proof of insurance from the moment before they issue your loan till you pay it off, which happens 15 or 30 years later for most first-time buyers. Home insurance premiums are not inexpensive to begin with, and they typically increase with time and the value of your home. In addition, they usually exclude certain protections (such as coverage in case of earthquakes, floods, or even acts of war) that you can add to your policy for an extra cost. 
  • Home warranty: It may sound similar to home insurance, but a home warranty protects certain items that your home insurance doesn’t. A home warranty covers home systems and appliances like the HVAC and washer and dryer from normal wear and tear, helping you replace or repair them when their time comes. 
  • Mortgage insurance: Many lenders require proof of mortgage insurance if your down payment is less than 20% of the home’s value. Rather than protecting your home, mortgage insurance protects the lender if you cannot meet the contractual obligations of your mortgage.

Furnish Your First Home with CORT Furniture Outlet

Owning a home is a big deal, and though it comes with many significant expenses, there are ways to shave down costs on certain items to generate some significant savings. One of the best ways to save is by furnishing your entire home in one swift go with your local CORT Furniture Outlet’s Instant Home-to-Go packages. Our whole-home furniture packages include gently-used living room, bedroom, and dining room essentials to help furnish your entire house for a fraction of the cost. 

How it works: you can shop online or in-store and after you purchase, you can opt for delivery or pick up your items the day you buy! Unlike most online and big-box retailers, you don’t have to wait weeks for shipping and delivery. The best part? CORT Furniture Outlet has an evolving inventory of stylish, discounted furniture. You never know what you’ll come across when you browse online or at one of our local showrooms. 

Start shopping for furniture today and furnish your first home fast.


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