You’ve searched high and low until you found your dream home, saved up for that rather sizable down payment and now you’re almost ready to sign on the dotted line. But wait – how much are you really paying? The list price on that new home may be substantial, but there are many other hidden costs that aren’t included in the listing. To ensure that you make the best financial decision, take some time to carefully consider the following hidden expenses of buying a home.

Home Inspection

A new home is a tremendous investment, and you need to ensure that you know exactly what you’re buying before closing the deal. Scheduling a thorough home inspection by a professional is a great first step, and in fact, and along with a credit check it’s generally required as part of a home loan. A general inspection often costs $300 to $500, but it may not be the only one you need. Many lenders also require a termite inspection, and a sewer or septic line inspection is highly recommended as well. All told, the inspection process can easily run up a bill in excess of $1,000. Of course, that’s still a small price to pay to avoid investing in a home that quickly turns into a money pit.

Survey Costs

Before you buy a new home, it’s a good idea to find out precisely where your property begins and ends. Some lenders require a professional land survey before even approving a mortgage, but it’s a valuable service even if you aren’t obligated to have it done. You’ll come away with a better understanding of the size and shape of your property, and you can avoid trouble with potential boundary disputes now and in the future. Though the price of a professional survey varies greatly depending on the size of the property, the terrain type and other factors, most homeowners pay approximately $330 to $650.


Everyone knows that property taxes and other taxes are simply part of owning a home, but what you may not realize is that some of those taxes might need to be paid up-front. In particular, if your down payment is less than 20 percent of the home’s value, or if you’re using an FHA loan, lenders will require that you place money in an escrow account to be used for property taxes and other important non-mortgage home ownership costs. The cost may vary, but as a rule of thumb, you should plan to pay two months of property tax and insurance payments up-front.

Closing Costs

Next to the down payment, the largest cost you’re likely to face on the way to home ownership is the bundle of fees and taxes collectively referred to as “closing costs.” This may include any number of miscellaneous costs, often including a home appraisal, a loan origination fee, attorney and notary fees, title and tax service fees and accrued interest costs. It’s a good idea to run the numbers through a closing cost calculator to get a more specific estimate of the fees you’re likely to face, but the sum total is usually equal to about two to five percent of the home’s selling price.

Moving Expenses

Once you’ve zeroed in on a home and you’re ready to take up residence, it’s time to pack up and move your belongings. Depending on the distance you’ll be moving, the amount of possessions you need to transport and whether you’re planning to hire professionals or do the job yourself, this may end up being another significant cost that you haven’t considered. Whether you’re buying boxes and totes, renting a moving van, hiring a moving company or renting temporary storage, the expenses add up quickly. In fact, the American Moving & Storage Association pegs the average cost at $1,170 for in-state moves and $5,630 for moves between states.

Cost of Ownership

Even after you’ve settled into your home and paid off all the fees and closing costs, don’t be so quick to put that wallet away. You’ll still be on the hook for a range of other expenses associated with home ownership, from monthly utility costs to routine maintenance to home insurance. Utility bills for the average American home total approximately $322 per month, while homeowners can generally expect to pay about one percent of their home’s value each year on maintenance and upkeep costs.

Buying a home is an integral part of the American dream, but it doesn’t come cheap. These and other unexpected costs can quickly drain your bank account if you aren’t prepared, which is why a solid understanding of the cost of home ownership is essential. Armed with this information, you can crunch the numbers yourself and make a confident, well-informed decision on just how much home you can really afford.

By Beth Kotz,
Beth Kotz is a business writer and contributor to She has also been featured as a writer and editor for numerous blogs in the energy, entertainment and home verticals.