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Homeownership for Dummies: The Ultimate Beginner's Guide

Are you buying your first home? Learn about the additional expenses that come with owning a home, such as lawn services, routine maintenance, and wastewater fees. Find out if you qualify for a home buyer rebate to help with the extra expenses.
Are you buying your first home? Learn about the additional expenses that come with owning a home, such as lawn services, routine maintenance, and wastewater fees. Find out if you qualify for a home buyer rebate to help with the extra expenses.

There are many wonderful things about owning your own home. You can paint your walls any color you choose. You can plant your favorite trees, bushes, and perennials in your very own yard. You can tackle home remodeling projects that up to now you have only watched other people complete. When you own your own home, you can learn to be self-sufficient and fix your own drippy faucets and horrible sounding garbage disposals.

Those are all wonderful things. You’ll feel like such a grownup when you go to the hardware store for the first time to buy the shiny, new tools you need to complete your projects.

But then, you find yourself needing to go back to the hardware store because you forgot to buy paint trays. Oh, and you also need to get bug spray because little, bitty ants keep finding their way into your kitchen. And then you need to get an odd-shaped light bulb for the fixture over your bathroom mirror.

By the end of your first month of home ownership, you may know the hardware store employee’s grandchildren’s names, and the days off of your favorite guy who works in the plumbing department.

Homeownership is great. It’s part of the American dream. But you will quickly learn that home ownership is more expensive than you first imagined.

There are many articles written to help you estimate how much extra you will be spending every month as a homeowner rather than a renter. Some experts say that you may spend 1% of your home’s cost each year on maintenance. Other studies say to budget $1 per square foot of your home in maintenance costs.

These estimates are better than nothing when trying to make a budget, but the real costs will be determined by a variety of factors, including the age, location, and condition of your home.

Here are some things to consider if you are currently in the market for your first home.

Utilities

As a renter, you are used to paying for natural gas, electricity, cable, and internet, but are you accustomed to paying the bill to heat or cool a 2,500 square foot home? You may be paying for your water usage while you rent, but your water usage will increase dramatically as a homeowner when you have to pay to water your lawn. As a homeowner, you may also have to pay for wastewater and trash services.

Services

Perhaps you are looking forward to having additional space when you purchase a new home, but a larger area means that you will need to spend more time cleaning. If you have a busy lifestyle, you may need to hire a house cleaner to help you stay on top of things.

If you have a lawn, you will also need to budget enough money to care for it. Plan on either buying and maintaining a lawn mower or hiring a neighborhood teenager to cut your grass. You may also need to purchase weed killer and fertilizer to keep your lawn looking healthy. If you have trees, you may need to pay someone to trim them periodically.

If you have a pool, you will need to pay for pool service. Do you have a fireplace? You’ll need someone to clean your chimney. You may have a security service on your property as well.

Throughout the year, you may also find yourself hiring professionals to spray for bugs, empty your gutters, check your air conditioning unit, and clean your ductwork and dryer vents.

Maintenance

When you move into a home, you may have a brief grace period where you have little to maintain on the house. The previous owner probably did most of the routine maintenance work in preparation for the home inspection. This grace period may end when you see the caulk starting to wear away from around the kitchen sink. You may notice paint starting to chip away around the trim on your windows.

While it may be tempting to ignore these issues, you will soon learn that Ben Franklin was right when he wrote, “an ounce of prevention is worth a pound of cure.” In other words, fix the small stuff, so it doesn’t turn into big stuff.

Other Fees and Costs

Up till now, you may not be fazed by the additional costs associated with owning a home rather than renting. You may be thinking that caulk is cheap, and you can cut your own grass. While some of the items on this list are luxuries, there are some costs you will not be able to avoid.

You may need to pay homeowners association dues for your new home. Your home association may collect them monthly or yearly. This may be part of your mortgage payment, or you may need to send a separate check once or twice a year.

If you plan to take out a mortgage on a home, you will be required to pay for homeowner’s insurance. Even if you don’t have a mortgage, buying insurance is a smart idea. Your insurance premium will be added to your monthly mortgage cost.

Since you are a responsible citizen, you will be required to pay property taxes on your home. You can complain about this tax all you want, but we all want great schools in our neighborhoods, smooth roads to drive on, and a firefighter to show up if our house catches on fire. Property taxes help pay for these services.

Feeling Overwhelmed?

Although this list is meant to inform you regarding the costs associated with owning a house, it could have overwhelmed you. If you are in the process of buying your first home, pause for a moment, and take a deep breath.

You may not enjoy as much flexibility in your spending as you did when you rented, but you will learn to adjust your habits. You may find that as a homeowner, you are not able to eat out as much as you used to because you have to pay for someone to remove the moles out of your yard. That’s ok. You have a large, beautiful kitchen now, so you will find that you are more excited about cooking meals at home.

While you may not enjoy some of the responsibility that comes with home ownership, know that you will be building up equity in your home over time. At some point, you may pay off your mortgage, and then you will be able to cash in on your real estate investment. After 30 years, all most renters have is a lot of monthly receipts from their landlords.

If you are feeling overwhelmed with the financial ramifications of buying your own home, reach out to a Clever Partner Agent in your area. You could qualify for a home buyer rebate. Available in 40 states, this rebate can be used to help pay for closing costs, add to your down payment, or buy points so you can have a better interest rate on your loan.

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Reuven Shechter

Reuven Shechter is the Outreach Coordinator at Clever Real Estate, the free online service that connects you with top real estate agents to help save on commission. He spreads the word about Clever, disseminating studies to journalists and developing relationships with media outlets. Reuven is passionate about investing in real estate and creating lasting success for families. His writing has been featured in Max Real Estate Exposure, Leverage Marketing, and more.

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