Photo: Robert Clark
Beyond the standard down payment, many American homebuyers neglect to properly budget for closing costs and one-time move-in related projects, like changing the locks.
The entire moving process can cost the typical buyer $40,000, according to a recent report by RealEstate.com and Thumbtack.
“Most buyers will have budgeted for the down payment, but buyers should also be prepared for closing costs that add roughly $6,250 to buyers’ expenses on the home purchase for the median home,” RealEstate.com general manager Justin LaJoie tells Livabl.
The typical first-time buyer puts down 15 per cent on their down payment, according to Zillow data. Based on the current median national home value of $218,000, that comes out to $32,700.
Closing costs generally include the origination fee, appraisal, transfer taxes, the first year of homeowners insurance, and title insurance. These can add around $6,200 to buyers’ expenses on the median-priced home.
One-time costs can add another $1,100 to the total cost of buying a new home. These new home-prep projects typically include things like eight hours of local moving, television mounting, pool cleaning and giving your new home the Molly Maid treatment from top to bottom.
And while some of these projects can be tackled on a DIY-basis, the materials needed to complete the tasks can still add up to a pretty penny.
At the metro level, one-time costs are the highest in the pricey San Francisco Bay Area, largely because of the inflated home values and high cost of local labor in the area.
For example, it could cost buyers in San Jose over $200,000 on average in one-time payments alone to move into a new home — which is more than the median home value in 11 major markets.
In New York City, one-time moving costs total a whopping $76,847. Meanwhile buyers in Detroit, Michigan will pay around $28,921 to buy and move into a new home — nearly $12,000 less than the national average.
Unsurprisingly, West Coast buyers should expect to pay near or in excess of $100,000 to buy and move into a new home.
And once a homebuyer becomes a homeowner, there are recurring expenses that should be considered before taking the leap to buy.
“It’s really important to keep property taxes and potential HOA (homeowner association) fees in mind when budgeting for your housing costs as these can add thousands of dollars a year on top of mortgage payments,” says LaJoie.
Zillow and Thumbtack, a website and app dedicated to helping find local professionals “for any project,” co-authored the report — with Thumbtack providing data for projected moving project costs.
Click here to read the entire report.