Just like how the purchase price of a car is not the entire cost, the purchase price of a house is not the entire cost either. In this post, I’d like to discuss all the surprising costs that come after you close escrow.
First of all, these are the unsurprising costs after you purchase a home:
- Monthly mortgage payment
- Home insurance payment
- Property taxes
- General and anticipated maintenance expenses
- Utilities
If you follow my 30/30/3 home-buying rule, you should be able to comfortably afford your home, even if you lose your job for a year or two.
Now let’s talk about the surprising costs that you may not have budgeted for. My goal for this post is to highlight as many home ownership costs as possible so you can budget appropriately before and after purchase.
Surprising Costs That Come After You Purchase A Home
Your surprise will depend on your experience in buying a home. The more homes you’ve purchased, the less surprised you will be about these costs.
However, even if you’ve purchased multiple homes before, if you are upgrading homes you will likely still encounter unanticipated costs. To minimize financial stress once you move in, it helps to build all of these costs into your budget in advance.
1) Curtains and blinds
One “trick” stagers and real estate agents like to employ when staging a home is removing all the curtains and blinds. This way, homes seem larger, brighter, and more cheerful. I was advised to remove all the dark heavy curtains in my home when I tried to sell in 2012. Thankfully, I didn’t given that was close to the bottom of the market.
As you are mesmerized by the greater space and natural light, you might forget you will have to buy custom drapes and blinds for many windows in the house if you like privacy. The home seller might still have the old drapes and blinds, but they may be old, hardware could get lost in the shuffle, or they simply may not match your tastes.
I went to a window treatments place called the Shade Store to get a quote for custom curtains and blinds for each room in the home we wanted to buy. The total estimated cost ended up being $25,600, and that was after the 25% designer discount! I was shocked.
Given I didn’t want to spend $25,600 on window treatments, we contacted Smith & Noble, a competing company we’ve used before. After some bargaining, we ended up paying about $9,800 for everything, including installation. It felt great to save over $16,000 on window treatments. But $9,800 is still a lot of money!
2) Bidets and washlets
Now that I’ve used a Toto washlet for over 10 years, I will never buy a home without them. At the very least, electrical outlets and water-line access needs to be near the toilets. Seriously folks, if you haven’t tried a Toto bidet washlet that cleans and dries, you don’t know what’s missing.
In the new house we wanted to buy, luckily, all of the main bathrooms had electrical outlets near the toilets. So I thought we’d be set to install the Toto washlets once we closed. However, after several visits, I realized they were all wall-hung toilets with tanks inside the walls. In addition, there was no water line access because it was also behind the wall!
Luckily, one of the toilets had a hole to the left of the toilet that was covered by a bumper pad. We took the cover off and there was the water pipe. From there, the contractor measured the distance and height from that valve to the center of the toilet. Then, he took a leap of faith and drilled into each of the remaining bathrooms’ wall tiles in hopes of finding the exact access point of the water line.
We bought five Toto washlets that each cost $1,100. We also paid a handyman and a plumber to drill five holes in the wall and install them all for $300 each. Overall, we spent about $7,400.
3) Changing all the locks
For security, it is highly recommended to change all your locks and codes once you purchase a home. Contractors, subcontracts, real estate agents, the previous owner, friends and relatives of the previous owner, and more could all still have copies.
Changing each lock might cost between $30 – $70. If you want help changing fancy gate codes and other special types of locks, you’ll have to pay more as well.
Our cost to update locks totaled $250. Not bad for something so important.
4) Security system – cameras and motion sensors
Your home may have an existing security system. Maybe it’s through ADT, Ring, Xfinity, or another security system. You would think setting up a security system would be as easy as just coming up with a new username and passcode. Then you’d call the security provider for monitoring service and off you’d go.
But it’s not always that simple. In our case, the security system was complicated with multiple cameras, zones, and sensors. We ended up hiring a guy who spent eight hours replacing equipment, changing keypads, testing all devices, and getting everything programmed.
The security installer also set up an internal and camera system with Ring and a smart lock called August. It’s some pretty fancy stuff.
His eight hours of time plus new equipment ended up costing us $1,950. Given nothing is more important than the security of my family, I was fine to pay this money. However, the cost was about $1,000 more than I had expected.
5) Broken appliances that weren’t properly tested
A home inspection contingency is important because it gives you the chance to test all appliances, bathrooms, showers, and amenities. It’s not enough to just turn on the shower for one minute and say it works. You need to actually take a 15-minute shower or a 15-minute bath to make sure everything works.
Run the microwave for five minutes while all the lights in the house are on to ensure the house has enough power. Fill up several cups of water from the refrigerator to ensure the filter is working and there are no leaks. Test the garbage disposal. Test the garage door ten times and inspect the spring. Make sure all the windows properly open and shut. Test all the light switches etc.
Even after all your tests, you may still find something broken after you move in. In our case, we had not tested a full load of clothes in the washer and dryer. The seller said the washer and dryer were never used, so we forgot to do a thorough test before we moved.
When we came back to check on our wash 20 minutes later, the laundry room had flooded! We spent an hour mopping up buckets of water and then drying the floor.
When the plumber came, it turned out the filter at the bottom of the washer was loose. As a result, water was just leaking through it. Once he tightened the filter, everything worked. Ugh, such an easy check that could have prevented a lot of stress, time, and work.
Luckily we didn’t run the washer and go away for hours. If we had, there would likely be floor damage. The cost to fix the washer was free given the seller paid for it. Check your washer filter and dryer ducts folks!
6) Higher water and electricity bills
If you move to a bigger house on a larger lot, you will likely face much higher water and electricity bills than you are used to. These are surprising costs because you’re not really using more electricity than normal. However, because your new home might have a hot tub, another refrigerator, electric instead of gas washers, radiant heat, and more, electricity costs add up.
Our new home has literally 10X more plants and is on an automatic sprinkler system that goes off for 15 minutes, four times a week. Our first water bill was for over $350 versus $50 normally.
Now that winter has arrived, we’ve turned off our automatic watering system that used to run for 15 minutes, four times a week.
7) New furnishings
If you’re moving into a larger space or are simply tired of your existing furniture and decor, you’ll have the added expense of new furnishings. The margins on furniture are huge and decorating your new home could easily run into the tens of thousands if you want to purchase new, quality pieces.
For example, I have an old desk I got at World Market almost 20 years ago. I loved it at the time, but it’s dated, bulky, and rather ugly now. Looking to replace it, I went to browse at the Room & Board showroom in San Francisco. I found a sleek, modern desk I loved, but it costs $2,000 after tax. Pricey! Now my old desk doesn’t look so shabby after all.
New couches can run between $1,000-$15,000, dining table sets can cost $1,000-$6,000, swivel chairs are between $600 – $2,200, and large area rugs can easily cost $5,000 – $10,000. The list goes on.
If you’re looking for some interior design help, you could pay an interior designer an unlimited amount of money to design every room in your home.
Check out this nice sectional from Arhaus furniture. $9,999 pre-tax for a sectional! Dang! When did furniture get so expensive?
8) Replacement appliances and devices
Never just assume that a home will come with every common appliance and device.
For example, home sellers may choose to take their washer and dryer to their new place. They may choose to take their non built-in microwave. Or the home may only come with one garage clicker when you need two. Always clarify with the selling agent and the disclosures what is and isn’t actually included in the sale.
Also make sure that nothing is missing before you close. I went to an open house once where the seller had installed over 10 Nest thermostats throughout the house. It seemed overkill to me, but that’s how the house was designed. Anyway, some lookie-loo snuck through the house and ended up stealing three of them, over $700 worth that needed to be replaced and reprogrammed.
We thought the seller was going to leave two wall mirrors in the main bedroom since the house was empty except for these two items during escrow. It turns out the sellers just hadn’t gotten to returning the mirrors to the stager from a year ago. Replacing the mirrors was a surprise cost right before closing.
9) Landscaping, new plants, and tree maintenance
If you’re lucky enough to have yard space at your new home but have never hired a landscaper before, you could be in for a surprise. Depending on how big your outdoor area is and what you want done, you could easily spend tens of thousands of dollars.
This summer, a landscaper quoted me $5,000 to landscape the front yard at one of my rentals. Given it was a simple job and we had some extra succulents, I decided to do the work with my son. Save money, build work ethic, and learn about rental property management. What’s not to love?
Adding retaining walls, leveling uneven ground, installing automatic irrigation systems, and installing outdoor lighting can easily run thousands of dollars. If you’re buying a house that has already been landscaped, learn to appreciate it.
After moving in, you may still have to pay to replace certain plants that may have been neglected. I wanted to replace some tropical looking plants at our new home and was shocked they cost $420 each (pictured on the left)! Luckily, I found a suitable alternative for a much more reasonable $35 per pot (pictured on the right).
The Cost Of Tree Removal And Maintenance
You may be faced with the cost of tree trimming or even tree removal. To remove huge trees, I’ve heard quotes of up to $50,000!
Trees, although beautiful, can cause a lot of damage if not properly maintained. In addition, if trees were planted too close to the house, their roots could damage the foundation and cause cracked pipes and leaks during rainy seasons. I know from past experience.
The original landscaper at our home planted three trees that can reach 25-feet heights within six inches of the home’s foundation. These type of trees need at least five feet on each side. Fortunately we realized the landscaper’s errors before we closed escrow and had the seller pay for their removal. We were able to save one ficus tree by replanting it in a different location.
In addition, extreme weather conditions can cause trees to uproot suddenly. We have friends who were displaced from their home for over a year in because of tree damage to their property during the 2021 atmospheric river.
10) The ongoing cost of owning your OLD home
Buying a home during the slow winter months may give you a better deal. However, if you haven’t sold your old home before you buy your new home, then you may have a difficult time selling or renting it out. You may be surprised to discover your old home might take longer to sell or rent out than anticipated.
If you own property that is more suitable for a family, like a single-family house, the best time to sell or rent it out is during late spring or summer. Families will be looking to move once their children are out of school for minimal disruption.
Every month your home goes unsold or unrented is costing you money.
After 20 years of being a landlord, I am picky about who I will rent to. Therefore, I will be taking my time. I’m also undecided on whether to rent out, sell, or keep our former home empty in this weak market. My gut instinct says to find great tenants and hold for the next 20 years.
I love our old home with panoramic ocean views. It’s the ideal work-from-home house. It also has a lot of sentimental value since we raised our kids in it for three years during the pandemic.
No More Surprising Costs After Buying A Home
Now that you’ve read this post, these surprising costs should no longer be surprises. You can now properly budget them into your home purchase costs.
A good rule of thumb is to budget 1% of the cost of your home in ongoing maintenance expenses. Homes need to be repainted, roofs need to be replaced, and water heaters tend to leak after 12-15 years.
You won’t face big home maintenance costs most years. But when it comes time to fix your home, you can draw on your home maintenance reserves to pay for them.
Ideally, you’ll befriend a trusty handyman or contractor who will be able to fix everything for you at a reasonable price. In addition, your guy will do some preventative maintenance before things get bad.
After more than two decade of homeownership, the most common surprise cost of owning a home is water damage. Be vigilant in clear gutters, drains, and clogged pipes. Inspect and fix weak spots in the roof. Check under your sink and kitchen cabinets to see if there are leaks.
Like cancer, the key is to detect the water problem as early as possible before things get really bad!
Related: All The Warning Signs Before Buying A House
Reader Questions And Suggestions
What are some other surprising costs of that come after you purchase a home? Let’s list them all out so that we are never blindsided.
To invest in real estate without all the hassle, check out Fundrise. Fundrise offers funds that mainly invest in residential and industrial properties in the Sunbelt, where valuations are lower and yields are higher.
Listen and subscribe to The Financial Samurai podcast on Apple or Spotify. I interview experts in their respective fields and discuss some of the most interesting topics on this site. Please share, rate, and review!
Join 60,000+ others and sign up for the free Financial Samurai newsletter and posts via e-mail. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009.
About Author
