Thinking about Relocating? Let’s Uncover the Hidden Expenses of Home Buying and Selling.

REAL ESTATE
Thinking About Moving? Understanding the Costs of Buying and Selling a House
By
Marc Andre
Last Updated
March 14, 2023

Ever thought about owning your dream home? Well, it’s exciting imagining all the things we want in a house. But here’s the deal: moving is expensive. Money-wise, it’s often better to stay put. However, sometimes we don’t have a say in this – moving becomes necessary.

Besides money, there are other factors – changing jobs, preferred school districts for your kids, or moving on from renting to homeownership. Either way, if you consider moving, you should know the financial impact. Here’s what you should expect.

Over 11 years, my wife and I relocated thrice. Each time, it was a ton of work and cost a lot. We hope to stay in our current house until our kids finish high school. Well, fingers crossed for that to happen.

Now, let’s dive into the expenses you should have in mind when moving.

In terms of categories, costs breakup into selling your current house, the transition phase, and moving into your new place. As a first-time homeowner, you can skip the selling part and focus on the transition and moving into your new home costs.

The Costs of Selling a House

1. Realtor Fees: Usually 6% of your selling price. You’re paying for both the seller and buyer’s agents if you go this route. You could decide to sell the house yourself to avoid paying a realtor. You might still have a few costs, including marketing and legal fees. You could also use a company that charges less than the traditional 6% fee.

2. Repairs and Touch-Ups: Even well-maintained properties will need a few tweaks here and there, such as fresh painting or landscaping.

3. Post-Inspection Repairs: Buyers will typically ask you to fix any significant issues that were identified during a home inspection.

4. Title Insurance: Generally, the seller pays for title insurance.

5. Transfer Taxes: These are the taxes due when you transfer property ownership.

6. Closing Costs: Some buyers will ask sellers to pay for all or part of their closing costs. While not mandatory, it is common with first-time homebuyers who have not saved up enough for both the down payment and closing costs.

Transition-Related Costs

1. Professional Movers: Hiring professionals to do the work comes at a cost, especially if it’s not a local move or you have lots of belongings.

2. Truck Rental: Alternatively, if you choose not to hire movers, you might have to rent a moving truck.

3. Storage: You might need to rent a storage unit, especially if you’re not immediately moving into your new home.

4. Lodging / Hotels: Depending on the timing of your move and the distance covered, you may need to book a hotel for a short stay.

5. Travel and Gas: Long-distance moving brings travel costs into the equation.

6. Lost Wages: You could lose some income if you need to take time off from work to facilitate the move.

7. Double Utilities: You might end up paying for utilities at both your old and new residences during the transition period.

8. Breakage Costs: During the moving process, there’s always a chance something could get broken.

9. Insurance: You could opt for insurance to cover any damages during the move.

10. Moving Supplies: You’ll also need to buy supplies for packing your stuff.

The Costs of Buying and House And Moving In

1. Home Inspection: A must for any homebuyer and could cost several hundred dollars.

2. Appraisal: Mortgage lenders usually require an appraisal.

3. Closing Costs: Be ready for various fees and costs associated with settling the mortgage.

4. Property Taxes: You’ll be liable for the prorated property taxes at the settlement.

5. New Furniture: Depending on what you already own, you might need to buy some items for your new place.

6. Appliances: Whether it’s a washer, dryer, or fridge, you may need to buy some new appliances.

7. Repairs: There might be costs for minor repairs or painting after you move into your new home.

8. Home Warranty: You may want to consider a home warranty for peace of mind.

9. Restocking the Kitchen: Remember to budget for groceries and essential kitchen items when you move in.

In pure terms of finance, moving typically reduces your net worth. But sometimes, it’s not just about money; other factors come into play. For you and your family’s sake, just make sure to consider all the costs involved before you make any decision about moving.

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