Hidden Costs of buying a house – A guide to First Time Buyers
Feb 01, 2022 by Naukhez Arshad Qadir
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Owning real estate is one of the most important and wise financial decisions of life. However, if you think the costs of buying a house is just the price of a plot or home, then think again. There are numerous costs attached to buying a house, and sometimes these costs can increase a lot and affect the cost of the house.
First-time home buyers should know all about the hidden costs of buying a house to evaluate the correct price of the property. With rapidly increasing prices of land, property and construction materials, it is crucial to be well aware of all costs, so you do not have to pay out of your budget.
Reall.Pk has gathered a list of hidden costs of buying a house that people usually neglect while purchasing; to guide our prestigious real estate investors.
First-time home buyers should know all about the hidden costs of buying a house to evaluate the correct price of the property. With rapidly increasing prices of land, property and construction materials, it is crucial to be well aware of all costs, so you do not have to pay out of your budget.
Reall.Pk has gathered a list of hidden costs of buying a house that people usually neglect while purchasing; to guide our prestigious real estate investors.
Property Taxes:
Every property owner is bound to pay property tax every quarter. Property taxes are essential for the welfare of the area, for most taxes are used for maintenance, security, fire protection, garbage collection, maintenance of roads, parks and open spaces. The country’s government sets the amount of tax for the real estate owners, and the amount is not negotiable.
Closing costs:
Among many other costs, closing costs are also attached to buying a house. Most first time buyers think that the only price they need to pay
is a down payment and then installments which is not entirely the fact. Closing costs include several fees that must be paid before closing the deal.
Many fees cover the entire closing costs of the house like title insurance, broker fees, interest, appraisal fees, etc. The closing cost of a home can be around 3 % to 6 % of the total purchase price.
Another significant amount that buyers usually pay is good faith money or token money, which is paid to prove the intent and ability to purchase real estate. The token money/good faith money is around one to three percent of home value, and it can be dependent on the credit risk of the house according to bank rates.
is a down payment and then installments which is not entirely the fact. Closing costs include several fees that must be paid before closing the deal.
Many fees cover the entire closing costs of the house like title insurance, broker fees, interest, appraisal fees, etc. The closing cost of a home can be around 3 % to 6 % of the total purchase price.
Another significant amount that buyers usually pay is good faith money or token money, which is paid to prove the intent and ability to purchase real estate. The token money/good faith money is around one to three percent of home value, and it can be dependent on the credit risk of the house according to bank rates.
Cost of insurance:
An insured house is a safe house, and in most parts of the world, home insurance is considered essential to protect house natural disasters and significant weather damages. It is important to ensure the house items like electric appliances, windows, doors and even carpets are in insurance beside the house or apartment.
Maintenance and renovation costs:
Some of the unexpected costs home buyers have to pay after buying a house are repairs and maintenance. According to the reports of real estate experts, the older the place is, the higher the chance of repair. Many real estate investors usually buy old houses for house flipping, and they know about the related repair and renovation costs. However, first time home buyers investing in a place to live should look closely.
Older houses are available in the market at comparatively low prices, but they often have structure issues, and the buyer might need a major renovation after buying.
A home inspection can be of great help here, as the inspection team will easily find issues. You can hire house inspectors to estimate how much repair is required. In most countries, potential buyers base buying a house decision on home inspection reports.
Old water heaters and roof sealing are often new house buyers’ liability. A home inspection is crucial for properties that are decades old, and a qualified inspector can be hired to look for major and minor issues, safety hazards and general structural issues like moisture, termite sites and pests.
These inspection services do not come free and can increase the overall cost of the house. However, many house owners often hire inspection teams themselves to increase the attractiveness of their property. You can also negotiate with the seller to pay half the inspection price.
Shifting costs:
Once the deal is closed, it is time to move to your new house with all the belongings. Shifting costs can be costly in Pakistan, especially when moving with your family from another city. You will need to hire loader trucks and labors to help in shifting.
The costs vary from area to area and city to city. As a first-time house buyer, allocate a budget for the shifting process and hire an only reliable transport service provider to move your precious luggage safely.
Got Scary? Worry not, we got you!!
All these hidden costs might scare many people from buying a house. As we said before, buying a residential property is the most crucial financial decision, and you can make it less complicated with proper planning.
There are tips you can follow to save for a new house, and it might take a couple of years of saving plans before you can buy a new home, but the efforts are worth it when you live peacefully in your new house. The incumbent government is also providing house loans on easy terms with the help of multiple banks in Pakistan, so the dream of owning a home can be made true.
Please read our guide on;
- how and where to get a loan for a house in Pakistan or contact Reall.Pk UAN number (03) 111 222 671 for best investment options in residential and commercial projects.
You can invest in affordable and fast developing housing societies like Rose Valley Rawalpindi and conveniently fulfill the dream of your own house. We only recommend investing in RDA or CDA approved housing societies.
Feel free to share your feedback and queries at info@reall.pk. Stay tuned to Reall.Pk blog page for latest news and information on real estate.
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