9 Hidden Homebuying Expenses That Can Really Cost You

So, you're finally ready to purchase your first home -- congratulations! Not to be a Debbie Downer, but there's something we need to tell you: You're about to be really, really poor. That is, unless you did your homework and learned that homeowners spend up to 4 percent of a home's value each year on maintenance and repairs.

But don't worry, our warning also comes with some helpful advice -- we don't want to totally turn you off from this momentous life event. Homeownership can be a personally and financially rewarding experience if you know what to expect.

Here are nine hidden homebuying expenses you need to be financially prepared for.

1. Appraisal Fees

Before your lender hands you a boatload of money to buy your house, you will be required to get an appraisal from a professional real estate appraiser -- your agent's market valuation or online search doesn't count. Your lender will choose the appraiser whose fee will typically run between $300 and $400, according to Realtor.com.

2. Home Inspection

It's a good idea to get your home inspected before you buy it -- a home inspection can reveal the dirty little secrets your house is hiding, such as termites, water damage, mold problems, plumbing and electrical concerns, and foundation issues. Buyers typically absorb the cost of a home inspection, which can run hundreds of dollars or more.

3. Closing Costs

Closing costs are fees charged by your lender and other services from third parties such as credit reporting, pest inspection, title insurance, escrow and recording fees, which Zillow estimates total between 2 percent and 5 percent of the purchase price of the house. The good news is that, unlike some of the other unexpected costs on our list, these fees are one-time only.

4. Agent Fees

You probably know this already, but your real estate agent isn't working for free. Most agents typically charge a 6 percent commission, usually split between the listing and the buyer's agents. These fees can be negotiable, especially if you use one agent to represent both the buyer and seller. Also, if you can't pay for the fee upfront, you can finance this cost into your mortgage instead.

If you decide on the latter, just know that you will end up paying interest on those costs, which can add up to thousands over the lifetime of the loan. You'll also need to budget for a higher monthly mortgage payment than you originally expected.

5. Moving Costs

Whether you are a homeowner or a renter, moving is a pain -- and it's expensive. The average cost of a professional, full-service move exceeds $12,000. There are many ways to lower this cost, but no matter how many corners you cut, there will still be some costs associated with making the move into your new home.

You might need to buy boxes, tape and packing supplies, or hire professionals to get the job done, so make sure you budget for this expense.

6. Insurance and Property Tax

Usually, when you get preapproved for a mortgage, that payment does not include property taxes or insurance -- it only includes principal and interest. Depending on where you live, additional property tax and insurance payments can be substantial.

For example, Southern California is notorious for its high property taxes and insurance rates (hello, earthquakes!). Combined, those payments can tack on an additional few hundred dollars a month to a mortgage.

Another thing to keep in mind: The county tax assessor can re-evaluate the value of your home at any time, so be prepared for those payments to increase right alongside your equity.

7. Homeowners Association Fees

If your beautiful new home is in a planned community, condominium project or subdivision, you'll probably have to pay homeowners association fees. These mandatory fees cover the costs of maintaining shared services such as sewer, water and landscaping -- and sometimes playgrounds, pools or clubhouses.

HOA fees often range from $200 to $400 a month, and the association can charge more if it needs additional funds to pay for expensive repairs like a new roof or elevator.

8. Landscaping

Now that you are a homeowner, you might imagine yourself mowing the lawn every weekend and maintaining a picture-perfect garden. However, you will soon learn the reality of keeping up with your home's landscaping isn't so idyllic. Not only is lawn and garden maintenance time-consuming, it's expensive.

You'll need equipment like a lawn mower, hedge trimmer, hose, sprinkler system, pruning shears and more just to keep it looking decent. Each season you'll also probably need to refresh your plants and plant new sod. If that sounds like too much work and investment, you can always hire someone to do it for you, but that'll likely cost $100 a week or more.

Some homeowners choose to save money by installing low maintenance and eco-friendly landscaping, such as artificial grass, rocks and stones, but that doesn't come cheap either. You might save enough on water and upkeep over time to make up for the cost, but you'll need to make a substantial initial investment.

The National Association of Realtors says synthetic grass can cost anywhere from $5 to $20 per square foot, compared to 14 to 60 cents per square foot for professionally laid sod. You read that right -- 60 cents a square foot versus $20.

9. Home Improvements

Whether you are painting the exterior, updating your kitchen and bathroom, or ripping up old carpet to expose the hardwood floor, it's no secret it will cost something. But you know that insurance and property tax we talked about earlier? Those are based off the value of your home, so every improvement you make is going to make those payments go up, too.

But that's not to say it isn't a good idea to update and improve your home -- many home improvement projects pay big dividends when it comes time to sell or refinance.

Morgan Quinn is a writer for GoBankingRates.com, a leading source for the best savings account rates, CD rates, personal finance news and more.

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