What Costs Are Associated With Buying A Home?

home buying cost

What Costs Are Associated With Buying A Home?

If wishes were horses, we would scout houses, identify one that we like, pay for it, and just move in. However, it is not that simple so get off those high horses and let’s discuss all the costs involved in your journey to being a homeowner.

Beyond the money offered to the seller of the house, there are a ton of other costs a buyer will incur in their quest to own a house. These costs can be grouped into two main categories. The first category is the cost leading to the purchase of the house and the other category is costs after buying the house.     

Costs Leading To House Purchase

1. Realtor Fees

If you employ the services of a realtor, they get a percentage of pay from the home-buying process as well. Realtors are supposed to take the burden off the buyer by giving you options according to your specifications and budget and scheduling visits to these houses.

The realtor signs a contract with the buyer at the beginning and a percentage fee is agreed on. Depending on the terms, the payment plan may defer but eventually, the realtor also gets paid an amount that is a fraction of the entire process leading to the purchase of the home.

2. Home Inspection Fees

Once you find a house you like, you make an offer and if accepted, you inspect with an inspector. A home inspector checks out the house to assess its current state and ensure it is livable. The home inspector will not check out the house for free. You will need to pay for their services. The charge of the home inspector varies but sometimes, this cost is not incurred because most people prefer doing the inspection themselves.

3. Legal Fees

Buying a house is a legal endeavor. As such the moment you decide to buy a home, you will need a lawyer, especially at the end of the buying process. Therefore, there are also lawyer fees involved in buying a home, most importantly, during the process of signing over the home.

4. Closing Costs

When you decide on the house you want, you need to close on it. This tells everyone that the house is off the market. Closing on the home comes with costs referred to as closing costs. It involves appraisal, title insurance, origination fee, lender fee, and other inspections. One of such important closing costs is the cost for the deed of the home in the buyer’s name with the city they live in.

5. Down Payment 

Once you settle on the house you will like to buy, you need to pay some money upfront to secure it. This money is what is called a down payment and it is a percentage of the total cost price of the house. Depending on the type of property, the down payment can be anywhere between 0 to 20% of the cost of the house. 

You will need to save up for the down payment depending on the type of loan which will be used to finance the house. With a conventional loan, you will be required to pay a 20% down payment on the cost of the home.

Cost After Buying The Home

You would think you could relax after purchasing that dream home but no, it’s not over yet. There are still some costs that will be incurred after buying that home. Before starting the buying process, these costs must also be considered so as not to be left stranded.

1. Utility Costs

Before you even think of moving into a home you have bought, you need to make sure it will be comfortable to live in. Apart from moving your belongings into your new home, issues with water and electricity need to be sorted. These utilities come with monthly costs. As such, utility costs are one of the costs associated with buying a home. 

2. Moving Costs

You have bought the house now and you need to move. Even if the old and new places of residence are a walking distance from each other, you will still need some hands to help move your belongings into the new place. Unless of course, you want to tell me you are moving in with nothing.

Therefore, once the home is purchased, you may want to consider movers which will attract costs as well.

3. Repairs And Maintenance Costs

Once you have moved in, there may be a few changes you would like to make to your new home. There may also be some things that need constant maintenance in the space. Therefore, you will need some money for repairs and maintenance. These costs should thus be considered when buying a home.

4. Mortgage Or Home Insurance Payments

Your monthly mortgage costs depend on the cost of the home and the interest rate at the time of the purchase. However, it is mostly less than 20% of the down payment made for the house.

5. Property Tax

If you didn’t know, you pay for owning a property! Yes, one of the costs associated with buying a home is the property tax. It is a yearly cost commitment calculated depending on where you live and the type of home you have.

6. Home Owner Fees

Also depending on where you bought the home and live, you may need to pay homeowner fees. These costs are also dependent on the various social amenities in the community where the house is located. 


The process of buying a house is not as simple as you think. It comes with a lot of financial commitments. The process leading to buying the house has some costs associated with it. Likewise, even after buying that dream home, some ongoing costs can certainly not be overlooked.