10 Hidden Costs of Buying a Home

Today, we’re talking about something that catches a lot of homebuyers off guard—hidden home buying costs. You’ve probably been focused on the big things—your down payment and your monthly mortgage—but there are plenty of smaller, unexpected expenses that can add up fast. Let’s break them down so you’re prepared to buy a home in Sonoma or Marin County.

1. Closing Costs

Most buyers know about closing costs, but many underestimate how much they’ll actually pay. These can run anywhere from 2% to 5% of the home’s purchase price. That includes things like loan origination fees, title insurance, escrow fees, and prepaid property taxes. Always ask your lender for a breakdown of these costs early in the process so you’re not caught off guard when it is time to close.

2. Home Inspections 

A home inspection is one of the most important steps in buying a house, and it’s something you pay for out of pocket—typically between $400 and $800, depending on the home’s size and location. If the inspection uncovers serious issues, you might also want to pay for additional specialized inspections, like roof, pest, or sewer line inspections. 

3. Home Appraisal

An appraisal is a required step in the home-buying process if you're using a mortgage, and it’s something you’ll need to pay for out of pocket. A licensed appraiser evaluates the home’s market value to ensure it matches the loan amount, which typically costs between $500 and $700, depending on the property's size and location. If the appraisal comes in lower than the purchase price, you may need to negotiate with the seller, cover the difference in cash, or even reconsider the purchase. In competitive markets, buyers sometimes choose to waive the appraisal contingency, but that comes with risks—so it’s important to understand your options before making that decision.

4. Property Taxes

You might be looking at your estimated monthly mortgage payment, but don’t forget about property taxes! In Sonoma and Marin counties, property taxes are typically around 1% to 1.25% of the home’s value per year, but there can be additional assessments depending on the area. Your lender will likely require you to prepay several months' worth of property taxes at closing, which can be a big chunk of change upfront. Be sure to check with your lender and ask for the estimated cost of property taxes.

5. Homeowners Insurance

Another essential but often underestimated cost is homeowners insurance. This protects your home and belongings in case of fire, theft, or other disasters. Costs can vary depending on the home’s location, age, and risk factors like wildfire zones—something to be especially mindful of in California. In high-risk areas, standard policies may not be enough, and you might need additional coverage for things like floods or earthquakes, which can significantly increase your annual insurance costs. It’s always a good idea to get insurance quotes before you make an offer so you’re not surprised by high monthly premiums later.

6. Moving Costs

Whether you’re hiring professional movers or renting a truck, moving isn’t cheap. A local move can run anywhere from $1,000 to $5,000, while a long-distance move can be significantly more. And don’t forget about things like packing materials, storage units, or temporary housing if your move-in dates don’t align perfectly.

7. Immediate Repairs & Maintenance

Even if your home is in great shape, there will always be things you want or need to fix right away. Maybe the water heater is on its last leg, or the carpets need replacing. And then there are the little things—new locks, window coverings, or even just stocking up on basic tools if this is your first home. A good rule of thumb is to set aside at least 1% of the home’s price per year for maintenance costs.

8. HOA Fees & Special Assessments

If you’re buying a condo or a home in a planned community, there’s a good chance you’ll have HOA fees. These can range from $100 to several hundred dollars per month, and they might increase over time. Some HOAs also charge special assessments for unexpected repairs, which can be a big surprise if you’re not prepared.

9. Utilities & Services

Your old utility bills might not reflect what you’ll be paying in your new home. If you’re moving into a larger space or switching from an apartment to a single-family home, expect higher costs for electricity, water, gas, and trash services. You might also need to budget for things like internet setup fees, security systems, or landscaping services.

10. Private Mortgage Insurance (PMI)

If you’re putting down less than 20%, you’ll likely have to pay private mortgage insurance (PMI). This is an extra monthly cost that protects the lender in case you default on your loan. PMI can add anywhere from $50 to $300 per month to your mortgage, depending on your loan type and down payment amount.

Final Thoughts

Buying a home is exciting, but these hidden costs can quickly add up if you’re not prepared. The best way to avoid surprises is to budget for these expenses ahead of time so you can enjoy your new home without financial stress. 

If you found this helpful, be sure to like this video and subscribe for more real estate tips. And if you’re thinking about buying or selling in Sonoma or Marin counties, I’d love to help—reach out anytime!

Thanks for watching, and I’ll see you in the next video!