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      02-05-2007, 10:09 PM   #1
MoreCowbell
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Hidden Costs of Home Buying

As I said in another thread, I am buying my first home: A Two bedoom apartment on the Upper East Side of Manhattan.

I have budgeted out my entire life to se wat I can afford. My question...what are some hidden costs to home buying I may not have thought of, or any other advice you might be able to offer to a first time home buyer.

Thanks in advance...
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      02-05-2007, 10:15 PM   #2
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      02-05-2007, 11:41 PM   #3
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Congratulations! Closing costs are almost impossible to nail down to the penny... give yourself a little extra cushion there, and make sure you find a good mortgage agent, they can save you a lot of headaches if they really know their way around the process.
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      02-06-2007, 12:11 AM   #4
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      02-06-2007, 01:12 AM   #5
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idk how it works in canada but if hes asking for info on hidden closing costs hes probably not in escro yet which means hes got 15-90 days min (at least in Cali)
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      02-06-2007, 02:52 AM   #6
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You might want to contact a lawyer to get some guidance. There could be covenant issues. Plus, you might want to check out the warranty of habitability rights in NY especially b/c you are purchasing this apt unit. The lawyer can also give the purchase and sales agreement a once-over to make sure everything is to your advantage, or at least somewhat equal. Good Luck! (I'm a law student )
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      02-06-2007, 08:29 AM   #7
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Quote:
Originally Posted by jkcali2ooo View Post
You might want to contact a lawyer to get some guidance. There could be covenant issues. Plus, you might want to check out the warranty of habitability rights in NY especially b/c you are purchasing this apt unit. The lawyer can also give the purchase and sales agreement a once-over to make sure everything is to your advantage, or at least somewhat equal. Good Luck! (I'm a law student )
in that case the hidden (unplanned) cost would be the lawyer fee
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      02-06-2007, 08:38 AM   #8
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Hidden costs aren't just in the closing of your house but the move in. Not every little detail was caught by the inspectors. Plus you're going to move in and realize you need this or that, which a bunch of little stuff will add up. I plan on having 15k for a downpayment and another 10k to throw around after that. New tv(if needed), new furniture, new hardware, new garage stuff, finishing the basement, supplies, etc. I understand you're buying an apartment but some of these costs will still be associated. The costs are just beginning haha.
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      02-06-2007, 08:42 AM   #9
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Quote:
Originally Posted by darkcloud View Post
Hidden costs aren't just in the closing of your house but the move in. Not every little detail was caught by the inspectors. Plus you're going to move in and realize you need this or that, which a bunch of little stuff will add up. I plan on having 15k for a downpayment and another 10k to throw around after that. New tv(if needed), new furniture, new hardware, new garage stuff, finishing the basement, supplies, etc. I understand you're buying an apartment but some of these costs will still be associated. The costs are just beginning haha.
yep, owning the house always asks for more money...
Make sure you understand the HOA costs and what the HOA covers, and the rules by how much the fee can go up.
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      02-06-2007, 10:56 AM   #10
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Quote:
Originally Posted by jkcali2ooo View Post
Plus, you might want to check out the warranty of habitability rights in NY especially b/c you are purchasing this apt unit. ))
???

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      02-06-2007, 11:13 AM   #11
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???

Lawyer talk
They'll always find something wrong with it
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      02-06-2007, 11:55 AM   #12
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make sure the home appliances aren't going to stop working within 30 days ro even a year...
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      02-06-2007, 12:05 PM   #13
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I actually think you can look up the warranty of habitability rights at city hall or possibly even online. The warranty of habitability is essentially universal throughout the US and has become the standard, although it differs state to state. b/c you are moving into a building owned by someone else, there are certain rights that you have, which require the owner to keep the building up to a certain standard. If that standard is not met, then you have the right to get the owner of the building to fix those problems, or deduct from lets say the monthly fees you pay to maintain the overall building (aka rent abatement). (This is separate from your purchase & sales agreement, but might be notated in the agreement). Warranty of habitability rights are usually statutory rights (meaning these rights are adopted from the legislature). B/c you are purchasing the APT it is less likely to have much affect.

One final note is to make sure there are no EXTREME easements or covenants to your property that you would not like giving access to. (Easements are right of ways that exist to your property for others. Covenants are promises that can run w/ the land and also give rights to your property to others. (Ex.) The building allows an easement w/ the cable/Phone service companies to run lines throughout the building. That is a commercial easement example. What I am telling you to watch out for are easements or covenants that gives right of access to your apt. that you or most people would dislike. I highly doubt you would have any problems since you are buying a nice place in NY, but it doesn't hurt to double check. Anyway hope this helps.

*Remember* --> I am NOT a lawyer. Good Luck!
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      02-06-2007, 03:41 PM   #14
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Yes, have a lawyer that specializes in real estate transactions. Having a lawyer makes your life easier.

Here in Canada, in order to sell and purchase a home, here are the costs, if i remember all of them....

1)Land Transferr Tax

2) Know your yearly property tax, managment fees

2)Legal fees, includes all title and deeds and all that legal stuff to transfer ownerships. So your lawyer would know the other associated "hidden" cost

3)Education, any tax arrears, and other fees like tree planting and other utilities hookups (for new homes), sometimes your builder will pay for that

Other then having enough to approve the mortgage.

Thats all i can think of right now, as both of my homes were brought new, so i have no experience in buying a used home
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      02-06-2007, 03:48 PM   #15
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Quote:
Closing costs are almost impossible to nail down to the penny... give yourself a little extra cushion there, and make sure you find a good mortgage agent,
+1. A good broker is imperative, and can save you tons of money. I've never once bought a house and been spot on with the closing costs. Seems like, same with weddings, somebody's always trying to get their cut and throwing in some bullshit fee at the last second ... when they've got you by the short hairs.
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      02-06-2007, 03:59 PM   #16
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There are some very good points made here about what to do before you have moved in.

Now, one thing often overlooked is the upkeep; specifically, I don't know if you are in coop or in a condo, but there are coop/condo fees to be paid every year.

Smart associations actually build up a contingency fund for major repairs to common areas, such as roof, underground garage (?), piping in common areas (plumbing) etc. If your condo/coop does not have an emergency fund reserve and a major repair comes up guess where the money comes from ? your fees will be increased by your pro-rata share and that can be quite a shocker to the lifestyle if the budget is otherwise tight. The same obviously applies to repairs to be made by you to your appartment and which you alone would be responsible for.

So ask your lawyer to request the financials and see if there is such a reserve fund. If not, then confirm the age of the roof etc. the stuff that can break and is expensive to fix.
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      02-06-2007, 05:29 PM   #17
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There aren't too many hidden costs, since they are required to give you a breakdown of the closing costs prior to your closing (good faith estimate). Most people would also recommend hiring a real estate attorney (they usually charge a few hundred dollars and will perform a title search and review the paperwork before closing).

Off the top of my head, this is what was paid at my closing (I did not pay points):
  • 3 months property taxes
  • 2-3 months condo fees (reserve)
  • 1-2 months mortgage interest (you won't be expected to make a payment for almost 2 months)
  • appraisal fee
  • title insurance
  • attorney fee
  • application fee
  • inspection fee

To be on the safe side, have about 3-5% available for closing costs (although it will likely be closer to 3%). Hope that helps.
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      02-06-2007, 10:22 PM   #18
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Quote:
Originally Posted by CnoteMD View Post
To be on the safe side, have about 3-5% available for closing costs (although it will likely be closer to 3%). Hope that helps.
Unfortunately you are WAY off...for the apartment I recently bid on, these are the closing costs I am estimating....

Purchase Amount: 1160000
Mortgage Amount: 1034000

Insurance Amount: 6,254.00
Municipals 295.00
Bankruptcy Search2 25.00
Patriot's Search 10.00
Overnights 50.00
Condominium Endorsement 25.00
Waiver of Arbitration 25.00
Environmental Endorsement 25.00
Escrow Service Fee 50.00
Mortgage Recording Fee 195.00
Deed Recording Fee 145.00
Mansion Tax: 11,600.00
Mortgage Tax 19,880.00

Total Buyer Fees: $38,579.00

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      02-06-2007, 10:30 PM   #19
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Jeez.... a million dollar mortgage, that's going to be like ~$55K in interest alone per year. I guess I probably don't want to know what property taxes are like in NYC.

Mansion tax? Never heard of that... I suppose "mansion" is defined by price not by living space.
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      02-06-2007, 10:37 PM   #20
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Quote:
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Jeez....

Mansion tax? Never heard of that... I suppose "mansion" is defined by price not by living space.
That's right Tom...the "Mansion" tax is a little nicety you get in Real Estate in New York. You pay 1% of the entire purchase price if the price is over 1 million. The tax started in the 60's and has never been changed. So yes, my 1050 square foot "mansion" will cost me an extra $11,600 tax!!!

A MANSION...at 1050 square feet, Are you KIDDING me???
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      02-06-2007, 10:43 PM   #21
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Quote:
Originally Posted by gluck75 View Post
Unfortunately you are WAY off...for the apartment I recently bid on, these are the closing costs I am estimating....

Purchase Amount: 1160000
Mortgage Amount: 1034000

Insurance Amount: 6,254.00
Municipals 295.00
Bankruptcy Search2 25.00
Patriot's Search 10.00
Overnights 50.00
Condominium Endorsement 25.00
Waiver of Arbitration 25.00
Environmental Endorsement 25.00
Escrow Service Fee 50.00
Mortgage Recording Fee 195.00
Deed Recording Fee 145.00
Mansion Tax: 11,600.00
Mortgage Tax 19,880.00

Total Buyer Fees: $38,579.00


I said that you should anticipate 3-5% for closing costs. I even said that in most circumstances it's closer to 3%. Based on the numbers you stated, it works out to 3.3-3.7% (purchase price vs. mortgage price).

So, how is this way off?
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      02-06-2007, 10:52 PM   #22
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In Montreal you'd have the friendly named "welcome tax" which would work out to $18,650 on your purchase price. Gotta keep those streets clean I suppose.

1050 sf is a good size for an nyc apartment though. What's the view like? Does it have an underground parking spot at least?
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