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Are There Hidden Costs To Homeownership?


Purchasing your first home can be very exciting. Most first-time homeowners often focus on location, price, and their monthly mortgage payment. However, when it comes to homeownership, there are other costs involved. Here are three things that some first-time Buyers overlook:

Closing Costs

When you purchase a home, there are closing costs. For example, escrow and title fees.

In a real estate transaction, both Seller and Buyer gets charged escrow and title fees. These fees can vary depending if you are the Seller or Buyer and the type of property you are selling/buying.

Did you know section F-6 of the Purchase Contract shows the different types of closing costs?

Home Maintenance

Homes require a lot of maintenance. Things will break. Owning a home is like owning a car. There are things you should routinely do to ensure the upkeep of your home.

When you check out properties, it's important you look at the overall condition of the home. Are the appliances new? How big is the yard (landscaping)? Is there visible termite damage? If you're purchasing an older home, it would be beneficial to find out of the electrical and plumbing are up to date.

Flood Zone

Each home belongs to a flood zone. The flood zone code determines if a home is in a low or high risk flood area. If you're home is in a high risk flood area, you'll probably have to purchase flood insurance. Flood insurance can cost you hundreds or thousands of dollars on top of your regular homeowners insurance policy.

If you're in a low risk flood area, it still might be beneficial to look into a flood insurance policy. The reason is, you can't predict what Mother Nature is going to do. You should speak to a insurance agent to see what insurance policy is best for you.

-RO

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Ryan Oda (RB-23073) is a Real Estate Advisor with Forward Realty (RB-19423) in Honolulu, HI.