A new survey of 1,000 homeowners by Real Estate Witch (an education platform) found that 9 out of 10 home buyers in the last three years were totally unprepared for a bunch of extra expenses after their purchase. In fact, 73% stated that they had regrets in their purchase due to these expenses.
While the survey is from the U.S., it wouldn’t be any different in Canada. But I would argue that almost none of these are a surprise at all. Sure, you hear the comment that most of the time, buying is cheaper than renting, but that’s just not the case at all – most of the time – for most people. When the survey found that, on average, homeowners say they pay an extra $17,500 in annual expenses, assuming that’s accurate, I wonder how many are necessary or could have been avoided.
Here are the categories of the surprises in the survey and their percentages:
33% property taxes: Nice try. Property taxes are right on the listing sites and sheet. It’s one of the first things anyone can access on any listing before even getting in the car!
27% renovations: Sorry, but that’s a “wanna do” vs. a have-to-do before even moving in. Ten seconds in the home and anyone can tell what they HAVE to fix and what they’d LIKE to fix.
27% utilities: Every realtor can get any seller to give you a copy of the last utility bill. It’s not a surprise to have to pay for electricity and gas, and the amount can be obtained really quickly and easily.
25% roof work – 15% foundation repair: Unless you’re buying a brand new home with new-home warranty, things like this will show up on any home inspection. That $400 must-do can save you a ton of money by either walking away or having the seller fix these things before you close the sale. Sure, sometimes they’re a surprise and shock. But that is the exception and not the rule.
23% insurance: There’s insurance on your vehicle, so needing insurance for your new home isn’t a surprise – ever. You may not have all the details the actual policy asks for, but you can get an idea online inside of two minutes and the only thing you need to actually know is the rough square footage and age of the roof. Then play with various deductibles and you’ll be within a hundred bucks or so.
22% appliance repair – 21% appliance replacement: Repairs happen, but is replacement a surprise, a need or a desire for (as an example) all new shiny and matching stainless steel?
19% yard work: Yup – a condo has someone take care of all that. If it’s a duplex or a house you walked around before buying it. Surely you noticed there were plants, grass, bushes and trees, didn’t you? Besides, that time is enjoyable and the money spent is very little. Think of it as “outdoor therapy” instead of complaining about it. You GET TO have a yard, instead of a 60 square foot concrete balcony or basement suite.
16% home cleaning: I’m not even going to dignify that with a comment – sorry.
A very long time ago, a realtor friend told me that anyone buying a home needs to have an additional $10,000 to spend. The figure may be higher, but buying a home is way more about the money than almost anything else. Read the home buying chapter of the Money Tools book. It’ll save you literally thousands of dollars and a ton of pain. And sometimes the best home buy is one you don’t make in the first place! It doesn’t need to be now – if you can’t afford it, don’t have all the answers or numbers – walk away. That way the dream of your own home won’t turn into a long-term nightmare.