Hidden Costs to Consider When Purchasing a Home

Buying a home is an exciting milestone, but many buyers focus solely on the down payment and mortgage without considering the hidden costs that come with homeownership. These unexpected expenses can add up quickly, making it essential to plan ahead. At SJH Real Estate Team, we help home buyers in Norwalk, Fairfield County, and New Haven County navigate the entire process so there are no surprises along the way.

1. Closing Costs

While your mortgage covers the bulk of your home’s price, closing costs typically range between 2-5% of the home’s purchase price. These fees include:

• Loan Origination Fees – Charged by your lender to process the mortgage application.
• Title Insurance & Search Fees – Ensures the property title is clear of liens or legal issues.
• Attorney Fees – Some states require a real estate attorney to review contracts and oversee closing.
• Escrow Fees – Paid to the company managing the transaction and distributing funds appropriately.

It’s important to get a closing cost estimate from your lender early on so you’re financially prepared.

2. Home Inspections & Appraisals

A home inspection is a critical step in the home-buying process, identifying any potential issues before you commit to the purchase. Expect to pay between $300–$800, depending on the home’s size and location. If major issues arise, such as foundation damage, mold, or roof problems, you may face additional repair costs.

An appraisal, required by lenders, assesses the home’s market value to ensure the loan amount is appropriate. This typically costs $400–$600. If the appraisal comes in lower than expected, you may need to renegotiate the price or cover the difference in cash.

3. Property Taxes & Homeowners Insurance

Property taxes and homeowners insurance are often rolled into your monthly mortgage payment, but many buyers underestimate these costs.

• Property Taxes – The tax rate varies by location. In Fairfield County, CT, taxes can be higher than the national average, so it’s crucial to research your town’s tax rates.
• Homeowners Insurance – Required by lenders, this protects against damage or loss. Costs vary based on home size, location, and risk factors like flood zones.

Before buying, check the home’s tax history and get an insurance quote to ensure affordability.

4. Homeowners Association (HOA) Fees

If you’re purchasing a home in a condo or planned community, you may need to pay HOA fees. These fees cover maintenance of shared spaces, landscaping, and amenities such as pools or clubhouses.

HOA fees can range from $100 to $500+ per month, depending on the community’s amenities and services. Some associations also charge one-time special assessments for major repairs or improvements. Always review the HOA rules and budget before purchasing to avoid unexpected costs.

5. Moving & Immediate Home Expenses

Once you’ve closed on your home, there are additional costs to consider:

• Moving Expenses – Hiring professional movers can cost $1,000+, depending on distance and volume of belongings.
• New Appliances & Furniture – Many homes don’t come with all appliances, and you may need to purchase or upgrade essentials.
• Utility Setup Fees – Deposits or installation costs for electricity, water, internet, and gas.
• Home Repairs & Maintenance – Unexpected repairs can arise, from leaky faucets to roof damage. Setting aside 1-3% of the home’s value per year for maintenance is recommended.

6. Renovations & Customizations

While a home may meet most of your needs, many buyers want to personalize their space. Paint, flooring, landscaping, and kitchen or bathroom upgrades can add thousands to your costs. Even small projects like installing new lighting or upgrading fixtures can quickly add up.

If you’re considering renovations, it’s best to budget for them in advance or purchase a home that requires minimal updates.

Plan Ahead & Buy Smart with SJH Real Estate Team

Being aware of these hidden costs can help you make a smart, informed home purchase without financial stress. At SJH Real Estate Team, we guide buyers in Norwalk, Fairfield County, and New Haven County through every step of the home-buying process, ensuring there are no surprises.

📞 Ready to start your home search? Contact SJH Real Estate Team today! Let’s find you the perfect home—without the unexpected costs!