When you are buying real estate, take a moment to consider these fees and ensure that you keep them in your mind because they will come due soon enough.
Depending on the type of loan, some of these will be “absent” from your thought processes. For example, if you are using a loan that is impounded – where your insurance and property taxes are part of your monthly payment, then you are not going to be concerned with them, at least not as those who have to make additional payments.
Insurances – Home
Home insurance in California typically runs about a grand a year. Of course – that can be a bit less and a bit more. Depending on the home, the amount of coverage you desire and a bunch of other factors. This coverage would not include earthquake insurance and other types. Those will cost you more and the deductibles vary.
If your home mortgage is impounded, it will most likely include insurance – the fire/theft type. The types of coverage available, such as the earthquake type in CA, will probably not be paid within your impounded payment. You will have to write that check eventually.
Most home buyers don’t keep track of this fee once the year comes to an end. If their insurance is not part of their payment, they are a bit surprised when that bill comes.
HOA – Home Owners Association
You may be surprised, but as a home buyer, some sellers will give you the benefit of paying a year of the HOA fees in advance. This could be because we are in a home buyers market, where every advantage is to the home buyer. This would include a housing market that is riddled with standing inventory with long days on market timeframes.
Some HOA fees are also included within an impounded account. These are not very common, but they do exist. I have also seen when there is extra money in escrow that was supposed to be a buyer credit not get used up, instead of it going to the seller, it’s used to pay off several months of HOA fees.
Some home buyers in the above circumstances may be surprised when they receive a notice from the HOA if it stops being paid or the payment credits run out.
The price of homeownership to keep a home livable and upkeep of the same. One of the biggest things a home buyer comments on, after viewing various homes in the same area/tract, is how some of those homes are not “kept up” with the present times. They also can identify homes that do not show pride of ownership. Depending on whether or not it’s a seller’s market or a buyer’s market, this neglect can equate to money thrown away.
Sometimes issues become exponentially worse. When you neglect certain items, their damage can increase over time. For example, a small pinhole leak in a pipe can grow to something that causes much more damage than what would have happened if you took care of it when it was discovered.
Homes need roofs, they need water heaters, they need things that will wear out over time. Consider these issues as a home buyer and it will ensure you are top of mind with regard to your investment in real estate.
Home Warranties may also be of great assistance with some of the ongoing breakings of items covered. Read my Home Warranty Article.
Pest Control / Lawn / Pool / Solar
These fees are typically monthly for maintenance and in most cases should be left to professionals. I remember as a kit I had to mix Malathian 50 and spray my home as a kid for pests. I’ll never forget the smell and I’d imagine that my parents should not have had me do that, but that was that time.
Some of my friends do their own pool. Me, never. I’m not comfortable with the chemicals involved and would fear for my families safety.
As far as the grass/gardening. This fee can be less or more than $100 bucks a month.
The Pool Service Fee’s are typically 60-100 bucks a month.
To have your solar array cleaned professionally, which needs to happen at least twice a year can cost you a few hundred dollars per time.
To have a monthly pest control service with the “no termite or we will fix it” guarantee can cost up to $50.00 a month.
Just remember when buying a home that these fees may exist depending on what you are comfortable with doing on an ongoing basis.
As sure as Death – Taxes
Los Angeles County property taxes are 1.25ish% per year. If your home loan is impounded these are going to be included with your monthly payment. If not, just remember that taxes are paid twice a year. If you are late there are penalties that will also have to be paid.
If the taxes lapse, just like with home insurance, your lender is going to potentially pay them to protect their asset aka your home.
This becomes expensive, especially when it relates to home insurance. They are not going to re-up with your company and then charge you the fee you were paying. No, they have their own home insurance companies and they are expensive in comparison.
Remember as a home buyer you are going to have to pay property taxes. In some cases and in some areas, we have mello roos or special assessment taxes on some homes. This can be very expensive and can come to you via a supplemental tax bill, make sure you know when you are entering escrow these amounts so you are not surprised and allow for them within your budget.
I’m Connor MacIvor. I’m the local area Expert Realtor within the Santa Clarita Valley cities and I’m glad to be of service to you. I will tell you that during my travels I have represented some great folk when it came to their real estate needs. I’m here to offer my services to you and yours with your Santa Clarita real estate.