Hidden Costs Homebuyers in California are Unaware Of

by Rama Mehra Team

In a recent article by realtor.com, they reported that 44% of homeowners were not completely aware of the costs when buying a home.

It’s a common misconception that home buying is just that, buying a home.

But there are a lot of additional costs you have to be aware of when you are planning to buy your dream home in California.

Some of the fees that are commonly known are home inspection costs, document fees, property taxes, home insurance, and title fees. The following are some of the lesser-known ones that you should take into consideration as you save for your dream home.

CLOSING COSTS

According to the real estate data and technology company ClosingCorp, the average closing cost for single-family homes is $6,087. That includes title policies, appraisals, settlement and recording fees, land surveys, and transfer taxes.

That being said, in California, the closing cost is between 0.98% and 1.15% of the total purchase price.

The price of an average home is $600,000 to $700,000. If the home you’ll be buying is within that range then prepare an amount between $5,880 and $8,050 — before taxes — in closing costs.

POTENTIAL RENOVATIONS

53% of homeowners interviewed in the same study didn’t consider potential renovations as part of the budget when buying a home but not improving the build of the home could be more costly than renovating.

HomeAdvisor.com gives a range of $18, 077-$76, 454 in renovating your home, depending on the size of the room, the materials that will be used, the extent of the renovation, and what the problems are.

MELLO-ROOS TAXES

Mello-Roos taxes are applicable to residents of the district who will benefit from them. Basically, Mello-Roos taxes fund improvements done to local services and infrastructure like building and repairing streets, sewers and sanitation systems, etc. If you want to read more about it, read this article by Investopedia.