Home-Buying Basics: The Real Cost of Owning
First-time homeowners may find themselves a bit overwhelmed by all the new expenses associated with their house.
Once they find the right house, have their offer accepted, receive a good report from the home inspector, and are approved for a mortgage, first-time homeowners might think the most stressful parts of the process are behind them. Unfortunately, that may not be the case.
New homeowners are likely to find themselves a bit overwhelmed by all the new expenses associated with their house. In addition to phone, Internet, cable, and gas and electric, which they were likely paying for as renters, there are the added costs of sewer service and garbage and recycling pickup. Plus, if your new house is significantly larger than the property you were renting, you might find that your gas and electric bills increase significantly as well.
And don’t forget that houses also come with large, one-time costs. The water heater might need to be replaced or the roof repaired. The first thing my husband and I did after taking ownership of our new home was hire someone to remove the giant tree in our front yard. Not only was the tree destructive (the roots had spread out under the front steps and part of the driveway), it blocked the entire front of the house and could have crushed it if it were knocked over in a storm.
Home ownership also comes with the responsibility to maintain the yard. The apartment complex’s management will no longer take care of shoveling the snow in the winter and mowing the lawn in the summer. Shovels and rock salt are, thankfully, cheap. But lawnmowers, especially a riding mower if you have a large yard, aren’t. Or will you hire a service to maintain the yard for you?
While bearing the burden of all the extra costs that come with owning a home, it’s important not to fall victim to what LearnVest calls “new-home syndrome.” This is when you decide the bathroom needs new fixtures, the kitchen would look nicer with a backsplash, the carpet in the bedroom should be replaced, and that one wall would look really nice with some artwork. In no time at all, you can find yourself shelling out thousands of dollars on top of all your basic home expenses.
One reason why homeowners can easily fall into this spending spiral is that the purchase of a house throws off their sense of scale. A $5000 couch doesn’t seem so unreasonable when you’ve just handed over $75,000 as a down payment. LearnVest suggests comparing potential home costs against what else you can buy for the same price—not against the price of the house you’re furnishing. So, before signing for that $5000 couch, consider whether you might not be better off with a $2000 couch and $3000 left over for a nice vacation.