Real Estate Tip of the Week: Preparing for Extra Costs
If you’re a real estate agent, it would be in your best interest to help and guide your clients to fully understand all of the fees that are associated with owning a home, so your clients feel prepared and ready for the transaction.
A recent report from LendEDU (an online marketplace for financial products and advice), found that 55% of homeowners regret taking out a mortgage during the pandemic. Of the homeowners who are experiencing regret, 30% wish they waited to purchase a home for financial reasons and another 7% of new homeowners said they were not prepared for homeownership.
While these fees will vary from person to person and state to state, it’s important to clarify the costs on the table so they don’t feel misled.
While these aren’t required, they are highly recommended in the industry. An average inspection may cost anywhere from $300 to $500. Inspections can help uncover any problems with the home and prevent more costly repairs in the future.
Financial experts recommend setting aside 2-5% of the purchase price for closing costs, and they must be available on closing day. This fee covers a variety of things, like notary services, title company search fees, attorney expenses, real estate transfer taxes, insurance premiums, and more. These will vary by state and property.
It is recommended to put aside 1% of a home’s value per year for any unexpected maintenance expenses. For example, a $300,000 home would mean budgeting $3,000.
While this might be the last thing on your client’s mind, moving adds up too. If they’re planning to hire a moving company or renting a truck, they’ll want to allocate this into their upcoming expenses.
As a real estate agent, you’ll need to remind them to speak with their lender and bank to fully understand their financial planning. But, that doesn’t mean you can’t help guide them on some of the upcoming fees associated with purchasing a home.
For more real estate tips and tricks, stop by AmeriTitle’s Blog!