Costs to Consider Before Buying a Home


Buying a home is an expensive proposition. Beyond the sticker price, there are plenty of other costs that come along with owning a home. When you buy, it is important not to be surprised by the new expenses, so be sure to plan for everything when making your budget.


The first new cost that you will come across when buying a home is homeowner insurance. While renter’s insurance is always a great idea, most landlords to do not require or enforce the need for a renter policy.

When you buy a home, your mortgage lender will require you to buy an insurance policy on your house. Depending on the value of your home, the cost will vary, but budget around $50 per month included in your monthly mortgage payment.


When you rent, the landlord pays taxes to the local government. Those taxes pay for things like roads and schools. Now that you are a homeowner, you get to pay for yourself.

Depending on where you live, property taxes can vary widely. When I owned a condo in Denver, my property taxes were around $1,000 per year. For my new house in Portland, Oregon, my taxes will be more than $6,000 per year.

Look into your local property taxes when you start searching for your home, or ask your agent what you can expect.. You may have an extra $50 per month or more than $500 per month in taxes on your home.


As a renter, you pay for some utilities on your own, but usually not everything. In my most recent rental, I paid for power and gas, but the water, sewer, and trash collection costs were included.

As a homeowner, everything falls on you. Water, gas, power, and trash are your responsibility to pay for unless they are included in your city taxes or homeowner’s association dues. And also remember that a house usually has higher utility costs than an apartment or townhouse, so budget accordingly.


When the second floor air conditioner started leaking water into the central air system and water started dripping in my kitchen, I knew there was going to be an expensive repair on the way. As a renter, that repair cost fell on the property owner.

When you are renting, any normal wear and tear or home maintenance is the responsibility of the landlord to repair. When you’re a homeowner, you get to pay for those costs yourself.

Plumbing issues and broken appliances are fairly common, so be sure to take those costs into account when you are looking to buy a home.

There are Benefits Too

While some of those costs can be intimidating, don’t be scared off from buying a home by those costs alone. When I bought my first house, my monthly cost actually went down from the rental I had before. I just saved that $200 per month for the new costs I expected with the new home.

In addition, when you own a home you can do anything you want to it. Paint colors, appliance choices, decorations, and every other part of the home are yours and yours alone. No one else gets to tell you how to manage your home. That is a nice feeling to live with.

If you are buying or selling a house and are looking to hire a successful real estate agent to help you through the process, take a look at AgentHarvest's list of top-ranking local Realtors in your area. We found these agents by examining their sales track records, awards, rankings, client testimonials and by conducting personal interviews.