4 Things to Budget for Before You Buy Your 1st Home

If I could compare buying a home to one thing, it would be booking your dream vacation-you don’t just pay for the flight; there are baggage fees, resort taxes, and if you choose AirBnB, the dreaded cleaning fee. Did I mention the travel snacks? Homeownership works the same way. 

Many first-time homebuyers focus on the price tag of a house but forget about the additional costs that come with securing their dream home. Skipping these items you need to budget for could leave you scrambling at closing—or worse, losing out on your dream home. Here are four key expenses you need to plan for before making an offer.

1. Earnest Money: Your Way of Showing You Mean Business

Sellers want serious buyers, and earnest money shows them you mean business. This expensive will typically be 1%–3% of the home’s purchase price. This deposit shows you’re committed to the deal. If you back out for a reason not covered in your contract, you could lose it. Yes! You could lose your earnest money! That’s never the goal, ff all goes well, it goes toward your down payment.

2. Home Inspections: What’s Really Hiding in the Closet?

That charming condo might have skeletons in the closet, literally—foundation cracks, plumbing leaks, or a roof past its prime. A professional home inspection will costs you anywhere from $300 to $600 but could save you thousands in unexpected repairs. Don’t skip this step.

3. Appraisal: The Bank’s Reality Check

As much as your lender loves you, they won’t just take your word for it when it comes to a home’s value. An appraisal ensures the home is worth the loan amount, typically costing between $400 and $700. If the appraisal comes in low, you may need to renegotiate or cover the gap in cash.

4. Closing Costs: The Home Stretch (Pun Intended LMAO)

In addition to your down payment, there are several other fees that have to be paid at closing. Closing costs cover lender fees, title insurance, and other essential services—typically 2%–5% of the home’s purchase price. That means on a $300,000 home, you’re looking at anywhere from $6,000 to $15,000.

Plan Ahead, Avoid Surprises

Budgeting for these four expenses will help ensure a smooth path to homeownership. The last thing you want is to fall in love with a home, only to realize you can’t afford the final steps. Be prepared, and you’ll walk into your new home with confidence—not financial regret.

admin Real Estate Consultant

After 12 years as a Quality Control Scientist, I changed my career path to purse a career in Real Estate. As a qualified real estate professional, I am ready to assist you with all of your real estate needs. With my dedication to quality and the analytical skills I developed as a Scientist, my approach to real estate is unique but effective. I can easily identify your needs in this ever-changing market and create the best plan and experience for you on your real estate journey. Our approach to solving clients problems are data driven and customer focused!

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