H
omebuyers often think the down payment is the final big expense, but it’s only the beginning.
The real hidden costs show up at closing and in the first year of ownership.
Plan for them by building a budget that covers everything from the day you sign the contract to the first 12 months of homeownership.
### 1. Closing‑day bundle
Lenders, title companies, escrow agents, and tax offices all tack on fees that add up quickly.
Typical closing costs range from 2 % to 5 % of the purchase price.
On a $400,000 house that’s $8,000–$20,000, often paid after the down payment is gone.
Ask your lender for a detailed cash‑to‑close estimate and don’t stop there.
### 2. Transfer taxes and building fees
Condo and co‑op buyers face extra charges that aren’t part of the lender’s bundle.
| Item | Example | Amount |
|------|---------|--------|
| City transfer tax (NYC) | 1 % on $500,000 or less | $5,000 |
| State transfer tax | $2 per $500 of sale price (≈0.4 %) | $2,000 |
| Building “working capital” | 1–3 months of HOA dues | $600–$1,800 |
These can add $10,000 or more, depending on the market and building rules.
Confirm all fees with your agent or attorney before making an offer.
### 3. Immediate repairs
Lenders will not fund a mortgage if the property has serious defects—roof leaks, structural problems, or safety hazards.
If repairs are required, the cost may be split between buyer and seller or paid entirely by the buyer.
Plan for a repair reserve on top of your cash‑to‑close. If the seller can’t cover the fixes, you may need more cash or be ready to walk away.
### 4. Ongoing maintenance
Treat maintenance as a yearly budget item, not a one‑time expense.
A common rule is 1 %–4 % of the home’s value per year.
For a $400,000 home that’s $4,000–$16,000 annually, or $335–$1,335 per month, before any surprise repairs.
### 5. Moving costs
Many buyers forget movers until after the contract is signed.
Average professional moving costs are about $1,707 nationwide, with local moves ranging $880–$2,563.
Even if you DIY, budget for packing supplies and last‑minute logistics.
---
## How to budget
1. **Get a detailed cash‑to‑close estimate early.**
2. **Request a written list of any building‑specific fees.**
3. **Set aside a first‑year reserve** that covers repairs, maintenance, and moving.
4. **If the combined closing‑day total and first‑year cushion feel tight,** consider renegotiating the price, looking at other properties, or adjusting your offer.
By anticipating these clustered expenses—closing day, transfer taxes, repairs, maintenance, and moving—you’ll avoid surprises and keep your homebuying budget on track.
