Here are four home-buying costs that might catch you by surprise.

This week, we’re talking about how expensive it is to buy homes, and I don’t just mean the price of homes in today’s hot market. There are a lot of additional costs that can creep up and shock you at the closing table, especially if you’re a first-time homebuyer. Let’s talk about the four costs you haven’t factored in while buying a home:

1. Home inspection. You have to pay for the inspection. Even if that inspection reveals something and you back out of the purchase, you don’t get that money back. It’s an expense for a service. Inspections aren’t cheap either; they can cost from $400 to $600, and if you need to get something like a well test, it could be as much as $800 to $1,000. 

Don’t get me wrong; that money is the best money you’ll spend during any real estate transaction. It can save you thousands or hundreds of thousands of dollars, but it’s important to factor in those costs.

2. Additional closing costs. This includes a lot of different things. You need to bring more money to the closing table than just your closing costs and lender fees. Prorated taxes and prepaid taxes are good examples. If the homeowner has paid taxes for the next quarter, you’ll need to pay them for the time from the closing date to the end of that quarter. You’ll also need to prepay the taxes for the next quarter so that your mortgage company has enough in the escrow account to pay for them. 

Most of the time, lenders will require you to buy homeowners insurance and pay the premium in full for the whole year before closing. You’re also going to have to pay the lender’s coverage for title insurance, but there’s also an optional owner’s coverage that you can buy. Hopefully, title insurance is never used, but it is money well spent in case there is a problem. Also, if the seller has paid ahead on condo or HOA fees, you may have to pay a portion of that back to them at closing. 

“ Do your due diligence and factor these costs into your budget before you buy.”

3. Moving expenses. If you’re a first-time homebuyer, you might have a group of friends ready to help you move, and you plan to pay them in pizza and beer. If you’re like me, that’s no longer an option; you’ll have to pay for the move. This can be fairly expensive, especially if you hire a good company to make sure your items are taken care of. Moving across town can cost several thousand dollars, and it can cost even more if you’re moving across the country. 

4. Immediate purchases. When you move into a new home, you may need stuff: curtains, blinds, or stuff for your kitchen. You’ll have to buy some things immediately. Think about cleaning supplies, bathroom supplies, groceries, cable, phone, and TV. Ask yourself what you might need right out of the gate, and budget for those items.