12 Extra Costs to be Aware of Before Buying an Ann Arbor Area Home

“The last thing you need are unbudgeted financial obligations cropping up hours before you take possession of your new home,” Diane Ratkovich, BUYER REPRESENTATIVE.

Whether you’re looking to buy your first home, or trading up to a larger one, there are many costs – on top of the purchase price – that you must figure into your calculation of affordability. These extra fees, such as taxes and other additional costs, could surprise you with an unwanted financial nightmare on closing day if you’re not informed and prepared.

Some of these costs are one-time fixed payments, while others represent an ongoing monthly or yearly commitment. Not all of these costs will apply in every case, however it’s better to know about them ahead of time so you can budget properly.

Remember, buying a home is a major milestone. Whether it’s your first, second or tenth home, there are many important details to address, during the process. The last thing you need are unbudgeted financial obligations cropping up hours before you take possession of your new home.

Read through the following checklist to make sure you’re budgeting properly for your next move. I have an Ann Arbor Home Buyer ebook available here. Reminder to come to our next monthly Ann Arbor Home Buyer Roundtable – Jan 13th 2010 5:30 pm 355 S Zeeb Rd Ann Arbor, MI 48103. MUST confirm with Diane 734-845-6542

1. Appraisal Fee
Your lending institution may request an appraisal of the property for which would be your responsibility. Appraisals can vary in price from approximately $175 -$ 325.
2. Property Taxes
Depending on your down payment, your lending institution may decide to include your property taxes in your monthly mortgage payments. If your property taxes are not added to your monthly payments, your lending institution may require annual proof that taxes were paid.
3. Survey Fee
When the home you purchase is a resale (vs. a new home), your lending institution may ask for an updated property or mortgage survey. The cost for this survey can vary between $100- $2,000.
4. Property Insurance
Home insurance covers the replacement value of your home (structure and contents). Your lending institution will request proof that you are insured as it protects their investment on the loan. Talk to our friend Cindy Strang at State Farm.
5. Service Charges
Any new utility that services your hook up, such as telephone or cable, may require an installation fee.
6. Legal Fees
Even the simplest of home purchases should have a lawyer involved to review all paperwork. Shop around, as rates vary greatly depending on the complexity of the issues and the experience of the lawyer.
7. Mortgage Loan Insurance Fee
Depending upon the equity in your home, some mortgages require mortgage loan insurance. This type of insurance will cost you between 0.5% -3.5% of the total amount of the mortgage. Usually payments are made monthly in addition to your mortgage and tax payment.
8. Mortgage Brokers Fee
A mortgage broker is entitled to charge you a fee in order to source a lender and organize the financing. However, it pays to shop around because many mortgage brokers will provide their services free to you by having the lending institution absorb the cost. Ask for a good faith estimate, now required by lenders within 3 days of application. I suggest a GFE on the phone consultation before meeting any lender.
9. Moving Costs
The cost for a professional mover can cost you in the range of:
• $50-$100/hour for a van and 3 movers, and
• 10-20% higher during peak demand seasons.
10. Maintenance Fees
Condos charge monthly fees for common area maintenance such as grounds keeping and carpet cleaning in hallways. Costs will vary depending on the building. Ask for the budget, reserve amounts, and minutes.
11. Water Quality and Septic Certification
If the home you purchased is serviced by a well or septic, you must comply with Health Department regulations and here you need to have your water and septic checked by APPROVED local Ann Arbor experts. Depending upon where you live, determines whether or not a fee is charged, to certify the quantity and quality of the water. In Washtenaw County it runs about $400. You can enter the property address to collect Ann Arbor Real Estate: Washtenaw County Health Dept. info on line.
12. Local Improvements
If the town you live in has made local improvements (such as the addition of sewers or sidewalks), this could impact a property’s taxes by thousands of dollars. Check to see if future assessments are on the horizon, within your township.
If you have uncovered or know about any other hidden gems let us know. We can update the list.

Click here to search Ann Arbor Real Estate using our complimentary Ann Arbor Real Estate MLS Search service. Alternatively please contact Kathy Toth and the team if you need more specific assistance in your Ann Arbor Real Estate needs.

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