The listed price of goods or a service is usually misleading, as there is almost always some type of hidden charge or tax added on. For example, the posted price of a concert or event ticket online is rarely what you end up paying. The unforeseen costs such as a service fee, transaction fee, and various taxes make the final cost much higher than anticipated. Buying and owning a home is no different. On such an extensive and costly investment, the unexpected costs can add up quickly. Failing to prepare for the hidden costs of homeownership has both immediate and long-term financial repercussions, so make sure you’re ready! Read below to learn about unforeseen costs that homeowners should know about.

Your Real Estate Agent’s Commission
When buying a house, many use a real estate agent. While you can buy a home without an agent, they make the process much less stressful for the prospective buyer. Real estate agents will set up viewing appointments and help you find a property that meets all of your specific needs. They will also meticulously pore over the documents and negotiate on your behalf for the best possible deal. However, their services are not pro bono. Real estate agents usually get paid on commission, meaning they make a certain percentage of the final sale. The commission is typically 6%, which is split equally between the buyer’s and seller’s agents. This percentage is negotiable, so make sure there is a fair number agreed upon before beginning the process.

Down Payment and Closing Costs
The down payment and closing costs are other costs that one must know about before purchasing and owning their house. A down payment is a percentage of the home’s entire cost, and it is paid upfront by the buyer to the seller. Down payments show that you are committed and serious about purchasing the home while demonstrating you have enough financial security and flexibility to complete the transaction. The home’s remaining cost is then paid off in the form of a mortgage. The interest rate on your mortgage is directly related to the size of your down payment, so make a larger upfront down payment to receive a lower interest rate. This leads to noticeable long-term savings.

Many homeowners worry about the down payment while forgetting about other closing costs of purchasing a home. Closing costs are various fees paid at the closing of a real estate transaction, which is when the property is officially transferred from the buyer to the seller. They range from 3% to 6% of the total transaction but can vary depending on your specific purchase agreement and local tax laws. Closing costs include but are not limited to appraisal fees, home inspections, discount points, prepaid interest, credit report charges, and title searches. Before completing the agreement, make sure you are familiar with the closing costs to avoid any more unforeseen costs.

Insurance Costs
Insurance is another often overlooked yet very important cost of owning a home. Just like car insurance protects against damages to your car, homeowner’s insurance protects against damages to your home, property, and assets in your home. Each policy differs, but homeowner’s insurance generally covers three specific circumstances: interior or exterior damage, injuries happening on the property, and the loss or damage of personal belongings.

While homeowner’s insurance covers many different scenarios, it may not be the only type of required insurance. Homeowner’s insurance does not usually cover natural disasters such as hurricanes, tornadoes, and earthquakes. If you live in an area with a high risk of a specific natural disaster, you will need a separate insurance policy to protect your home. Insurance’s importance is never realized until it is needed, so do not cheap out––make sure your home is properly protected in the event of an accident.

Property Taxes
Prospective homeowners must factor property taxes into the cost of their potential home. Property taxes are based on the value of the property and are collected by the municipality or local government. They hire a tax assessor to inspect your land and property to determine the necessary tax. This tax only includes fixed structures such as the land and buildings, not any of your material possessions. Property taxes can also change annually, so you must be prepared for a potential increase.

Maintenance and Cleaning
When owning a home, there will always be unforeseen maintenance costs. Fortunately, protections such as a home warranty help limit these costs. A home warranty is similar to home insurance on the surface, but it differs in some key ways. Home warranties are contracts that provide for repairs and replacements of larger home appliances. Warranties also protect against damages caused by faulty maintenance and general usage, unlike home insurance. However, warranties do not cover every potential maintenance cost.

Some appliances may also need upgraded or replaced entirely soon after purchasing the home, such as the HVAC system. If your potential house has an old or inconsistent system, consider upgrading to a ductless mini split system. Although some are deterred by the high initial cost, their many benefits make them worthwhile. They operate so efficiently that the initial cost is offset by savings on your energy bill. They also improve the air quality in your home and possess both heating and cooling capabilities. Mini splits also have a very simple installation process and require annual or biannual maintenance, depending on their usage.

You’ll have to regularly clean your house, so make sure you are financially prepared to do so. Purchase necessary equipment and cleaning supplies for both general cleaning and specific messes. If you have a yard, you will need to purchase necessary lawn maintenance equipment or pay for a landscaping company.

Purchasing and owning a house is an exciting journey and an accomplishment you should be proud of. However, it requires time, commitment, and financial flexibility. There will be many unforeseen costs along the way, and you must be prepared for unexpected issues to arise.

Author Bio: Emily Hodges is a Marketing Communications Specialist for Comfort Up, a provider of indoor and outdoor heating and cooling systems. Emily oversees all marketing-related functions from their Miami, FL office. In her spare time, she loves all things interior design and has helped many friends completely renovate their homes.