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When you’re purchasing a home, most of your budgeting is built around the costs directly associated with your purchase. You’ve probably already talked to your lender about closing costs and down payment. It’s also important, however, to think through the details of buying and moving into your first or upgraded new home. Here are 5 things to take into consideration as you prepare for life after having your sales offer accepted. It’s important you not forget to budget for these when you buy a new home.

1. Earnest Money Deposit

The earnest money deposit (also called EMD) is a deposit made from a buyer to a title company that represents a buyer’s good faith to buy a home. The money is deposited with the title company and remains there until closing. It shows a seller of a home that you are serious about buying their home. The amount of an EMD varies. According to this Forbes article, it can be between 1 to 5 % of the final sales price depending on where you live and market conditions. Some buyers deposit a large EMD to stand out from the competitors. Funds are sent to the title company usually by a certified check or by wire transfer within days of ratifying the sales contract. At closing, this amount is applied to the purchase of the home.

2. Home Inspection

Buyers should also remember to budget for the cost of the home inspection. This cost is typically paid by the buyer to ensure the home is in good condition before proceeding with the sale. Home inspection costs vary greatly depending on where you live. Costs run between $300 to $1000, depending on the size of the home and the options chosen. Payment is often required before the home inspection occurs.

3. Moving Costs

One cost that you will incur around the same time as closing is the cost of moving. This can be impacted by a variety of factors, including the distance you’re moving, the amount of furniture, and personal belongings you own. This article from US News offers great information. There may also other costs incurred for additional services you require, such as packing, unpacking, or temporary storage.

If you’re looking for ways to save money during your move, think in terms of time and logistics. Stack boxes near the door to save the movers time carrying them from different rooms. Label everything well, and consider color-coding boxes with stickers so that it’s easier for the movers to put each item in the correct room in your new home. Most of all, make sure you have everything ready to go when the movers arrive. You don’t want to pay for their time while you empty a cabinet or closet you forgot about.

4. Upgrades/Updates

You may have a variety of major or minor repairs and improvements to make to your new home before you can truly settle in. These may be based on the home inspection or on your personal preferences. In either case, you’ll probably save some time and frustration by having them all done at once before you move in, if possible.

If you know you want to upgrade your space, consider talking with a real estate professional about value-added upgrades that can help you increase your home’s equity as quickly as possible. Consider updates and upgrades to the kitchen and baths that will make them more functional now and when you resell. Enhance the curb appeal and outdoor space with exterior upgrades that pay dividends for years to come.

5. Cost of Living Increases

There are many ways a new home can result in a higher cost of living. Here are some for you to consider and budget for BEFORE buying a home.

  • If you’re moving further away from your job and have a longer commute, you will have to budget for a higher transportation cost.
  • If you’ve moved into a planned community for the first time then be sure to know the Home Owner’s Association (HOA) fees. These HOA fees (or condo fees, in the case of a condominium purchase) fund the upkeep of common areas and amenities. It also pays for the hiring and payment of staff. Plan to pay these mandatory fees on a monthly, quarterly, or annual basis, depending on the rules of the association. Also check if there are additional social membership fees for access to facilities like the gym or country club.
  • Property taxes and Homeowners Insurance are also costs to consider and budget for. Be sure to know your property tax early and note that some counties have much higher taxes than others. Another consideration is homeowner’s insurance, which is usually tied into your mortgage, prorated and paid along with your mortgage payment. One way to save money is to shop around for homeowner’s insurance versus taking the option from the lender, if they allow that.
  • Utilities can vary significantly depending on a variety of factors. Utility rates may simply be higher in your new market or city, or costs can increase for the following reasons: moving from a smaller home to a larger home; going from a more energy-efficient newer home to an older home; transitioning from an apartment or condominium to a single-family home; moving from a home with few special features to one with more, including upgraded appliances, multi-zone HVAC, pool, spa, or others. When you’re putting together your budget for updates and upgrades, you may want to consider whether you need to make some changes to improve the cost of operating your home each month. Contact your local power company and ask about a home energy assessment to see where you can improve, including adding insulation, replacing old doors and windows, or replacing outdated appliances and systems with new ones.
  • Lawn and Garden Care is another consideration for your budget when buying a home. You may experience some sticker shock if you go from a condominium or apartment complex to a single-family home with a large lawn or extensive outdoor spaces. Aside from labor and equipment for regular lawn maintenance, you’ll need to think about other landscaping tasks and tree maintenance. You’ll also need to maintain the roof, clean the gutters, maintain exterior trim and siding, and keep up with your hardscaping, deck, and stonework.

    Consider whether you’ll do the work yourself or hire a professional service provider. If your commute has gotten longer, you may not have time or energy to spend in the yard when you get home in the evening. While you may love caring for the plants on your condo’s balcony, you may not love having to cut the grass every week for several months out of the year.


If you want to get a good idea of the way your home purchase will impact your overall household budget, contact your real estate professional who can help you do the research and find the numbers you need so that you can make a more informed decision and plan ahead financially.


If you’re thinking this is the time for you to buy a home, check out these great tools to get you started – Helpful Tips for Home Buying.

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