Home start-up budget

hoffse · October 2013

Hi everyone -

H and I are currently saving for a house. We have enough for a downpayment on a small home, but we've agreed to save at least through next spring to increase our budget and make sure we have some slush left over. One thing we are struggling with is how much extra cash we will likely need on-hand for various things right after we move in. I know we might get lucky with paint colors, appliances, etc. but we don't want to assume that will be the case so we'd like to save extra for these items. Here is the list of things we have come up with that we need to save for OTHER than the downpayment. Is there anything missing? We live in a MCOL area, and we will consider increased utility costs, insurance, and taxes as part of our budget while shopping for the house, so I haven't included those.

-Closing costs: about 2% of house price (we will try to negotiate this with the seller of course - and we may finance these if we can't get the seller to pay them)

-Inspection: $500

-Appraisal: $250

-Moving costs: $100 (we will do this ourselves)

-Cleaning costs: $100 (carpet cleaner rental, etc.)

-Paint: $200

-Changing locks: $100

-Changing utilities: $100

-Washer/Dryer: $800

-Lawn mower: $400

-Other lawn care equipment (rakes, hoses, etc): $200

-Grill/smoker: $300 (I may get this for H for his birthday instead of buying it right away...)

-Basic tools for DIY projects (drill, sawhorses, sander, etc.): $300

-Couch: $1,000 (we own a couple chairs but no couch)

-Misc (fixtures, etc.): $500

Are we missing anything major? TIA!

Trixeetrix · October 2013

Home Owners Insurance (price varies depending on many factors) Another One that sticks out is minor repairs - if your house is not brand new chances are things will need to be repaired.

Ducktale · October 2013

Having the seller pay closing costs must be a regional thing. It's pretty unheard of around here, but I saw it on those home buying shows all the time.

We bought a house that needed a lot of cosmetic work (which meant we got it for an incredible deal), but it also meant we spent way more than this on the little things (replaced every light fixture, cabinet pulls, bought a steamer for wall paper, rented a tiller for the lawn, etc.). We also spent WAY more than that on paint, but we painted every wall in the house and bought a high quality paint (which I highly recommend). Also the painting tools add up as well. We also did not have enough furniture for our house, so we bought more of that.

Also consider, I'm not sure what your renting situation is like, but if the timing does not work out perfectly, you could end up needing to pay both a rent payment and mortgage payment in the same month until your lease ends.

In our area, we also had the option to do radon testing and lead paint inspection (negotiated for the seller to cover remediation costs, but paid for the testing ourselves).

Other than that, we spent more on miscellaneous stuff that adds up (ladders, garbage cans, fire extinguishers, carbon monoxide/smoke detectors). So to answer your question, I can't think of anything BIG, and depending on what you by, you might be fine. I think I kept track of some of these costs, I might try to dig it up and see if there was anything I'm missing.

maple2 · October 2013

I can look back through our records as well, but here are a few things that might be expenses for you.

1. Taxes--We reimbursed the previous owners for the property taxes they had already paid for the rest of the year. This could be a large or small amount depending on your situation.

2. Legal fees--In our state buyers are required to have a lawyer. There are also costs for things like filing the deed. Any basic home buying guide would probably be able to let you know if there are any other costs directly associated with buying the house that you have not mentioned.

3. Landscaping--Depending on when you buy, you may want to add plants or other things to change the look of the outside of the house.

4. Misc. things that come up during the inspection--We ended up getting a radon system installed in the basement as well as replacing the water main. The sellers paid for the radon and we split the cost of the water main. Together those things were probably $3,000.

5. Hardwood floor refinishing--If you buy a house with hardwood floors and think you want the floors refinished at some point, it is definitely easier to do if there are a few days while the house is vacant between you and the sellers.

brij2006 · October 2013

I thought of a few things you may run across that you didn't have listed, and the amounts are about what we spent for these items.

Window Coverings = $400
Any kitchen appliances that may not come with = $500 on used to $5,000 on new.

We also spent about $900 within the first couple of months on getting furniture to help fill the house, because we were moving from a 1 bedroom apartment to a 4 bedroom home. I wish that I would've saved up more money for this. It's been 4 years, and I'm still gradually purchasing pieces to put in certain places.

CuriousKiddosMama · October 2013

you may need to figure a little higher on closing costs, even if the buyer covers some. My sister is buying a 101k house and closing costs will be about 6%. But like some PP said, this includes part of the property taxes, and a years worth of homeowners insurance which the bank requires.

Ducktale · October 2013

Oh yeah, window coverings is a good one. We spent a bunch on that too. And curtain rods, but again, we replaced pretty much all fixtures

Found my list, more minor things but again...they add up:
Rugs
Bath/Bathroom accessories for a second bathroom
Fireplace accessories
Shovels/snow blower
Wall hangings
Patio furniture

And then a whole bunch of stuff we bought specific to the fact we bought a semi-fixer upper.

Sisugal · October 2013

utility deposits

Do NOT roll closing costs into your mortgage - you will be paying on that extra amount for 30 years!

Make sure you still have a good emergency fund of 6 -8 month's expenses in place AFTER all of these costs. You need to be prepared for the unexpected - water heater dying, roof leaks, sewer backs up, you lose your job, unexpected pregnancy, car needs major repair etc. Stuff happens at the most inconvenient time.

hoffse · October 2013

Thanks, all - this is very helpful.

We currently live in a 2b/2b apartment. Our second bedroom doubles as both a bedroom and an office (it's tight), so we're hoping to get a 3/2 and make one an office until we start a family. I'm hoping to budget for one or two nice pieces of furniture - a couch and maybe an accent chair or something. Other than that, furniture will probably be acquired slowly. My parents' best friends recently downsized from a 5 bedroom house to a 2 bedroom condo, so we have some hand-me-down furniture in storage that we can use to fill the house until we have a chance to upgrade. BUT we don't have a couch at all. Our recliners are great - lazy boys my parents gave us that they now say they want back because they're the best chairs ever (circa 1980). But we really would like a couch when we get a house. And at this point we aren't going to buy cheap furniture anymore. My parents' couch looks brand new and is more than 20 years old. It gets used every day, so I'm willing to buy something that's good quality.

The legal fees are interesting because I'm actually a lawyer... though I don't actually know anybody who does residential real estate. We all do commercial. I'll have to ask around about that. It would irritate me to no end if I had to pay for something I'm licensed to do myself...

Fireplace tools - never would have thought about that, but that's a good point. Don't want the cat exploring the fireplace... Same for the window treatments. I can sew basic pillows and curtains, so I imagine I will be in the market for some discount fabric once we close. Also thanks for the tip about paint, we will increase that budget. We don't know if we'll be painting a couple rooms or the whole thing - I do know we want to paint as much as needed before moving in (if possible). It's so much easier while the rooms are empty.

I'll also budget for a random kitchen appliance or two. Maybe a fridge and a stove?

Also a great tip about hardwood refinishing - that's a good idea to go ahead and do that while it's empty. I'll add that to our budget in case it needs to be done.

I didn't realize you had to pay for a year of home owner's insurance upfront, so I'll also add that as well. Any thoughts about how much we should budget for this?

Finally, we're month-to-month with the lease so we won't have any additional costs associated with that. One small blessing at least...

Hopefully we won't have to pay for all this stuff... but I suppose it's better to be prepared just in case.

brij2006 · October 2013

You said that you live in a MCOL area. So for homeowners insurance, I would budget for $1,000-$1,500. It all depends on the type of home you purchase, your credit score, the area the home is in, etc. Every home is different, but this would be a descent average you could put aside.

Ducktale · October 2013

I think having a lawyer varies state to state, we did not have one. And you totally do not need to buy a whole house of new things right away, like you said. I'm content with home sewn curtains and handmedown furniture--that's what we have. Could we buy new furniture? Sure. But I'd rather but that money towards other things. Many if the things listed above are just items to consider, depending on what house you end up buying you probably won't need it all. But smart to budget and prepare!

hoffse · October 2013

Thanks! I think H and I are going to take a hard look at the costs of these various items and perhaps make a first, second, and third priority list. I suspect we won't make it to the third priority list at all right after we buy, but we can budget for our first priority (everything we really have to have like the insurance and inspections) and hopefully we can dip into our second priority list a bit also (paint, couch, etc.). It's just nice to know what to expect upfront so that we can be a bit strategic and stick to our lists. Otherwise, I think we would see the empty house with ugly fixtures and drop several thousand dollars on things that, while nice to have, aren't strictly essential upfront.

brij2006 · October 2013

There is absolutely nothing wrong with prioritizing and making a list of "to-do's" for after you buy the home. We did this, and are 4 years into homeownership and our needs vs wants for the home have changed drastically.

I purchased a brand new sectional to fit in our living room, and a brand new washer and dryer when we moved in. Other than that, I re-finished some old dressers and end tables, and we're still using those to this day. Even now with needing to remodel the nursery and furnish it, I'm looking at pieces we already have that I can re-finish and repurpose into that room. We bought our home with just enough money to close and $10k to put toward the remodel of it. It is still under construction, but we've done a lot of extras over the last 4 years that we didn't plan on originally doing (all new windows, roof, 2 patio slabs, etc). However, we also budget in $200/month to apply toward house items (paint, landscaping, new garbage disposal, etc). Then we also budget for 1 large project per year (usually from $2k-7k).
You can definitely prioritize and make it work with less money, but also plan to budget in some extras into your monthly budget for when you want to get those extra items.

Rainzzzy · October 2013

brij2006 said:

There is absolutely nothing wrong with prioritizing and making a list of "to-do's" for after you buy the home. We did this, and are 4 years into homeownership and our needs vs wants for the home have changed drastically.

I purchased a brand new sectional to fit in our living room, and a brand new washer and dryer when we moved in. Other than that, I re-finished some old dressers and end tables, and we're still using those to this day. Even now with needing to remodel the nursery and furnish it, I'm looking at pieces we already have that I can re-finish and repurpose into that room. We bought our home with just enough money to close and $10k to put toward the remodel of it. It is still under construction, but we've done a lot of extras over the last 4 years that we didn't plan on originally doing (all new windows, roof, 2 patio slabs, etc). However, we also budget in $200/month to apply toward house items (paint, landscaping, new garbage disposal, etc). Then we also budget for 1 large project per year (usually from $2k-7k).
You can definitely prioritize and make it work with less money, but also plan to budget in some extras into your monthly budget for when you want to get those extra items.

How difficult is it to re-finish furniture? I am pretty unskilled when it comes to DIY but willing to learn especially since I have some solid pieces that are just not the finish I want. I am in the camp that believes in paying extra for higher quality pieces so I know I will have to live with my current hand-me-down furniture for several more years while I work on buying new.Did you learn to re-finish on your own or have someone show you? I am hoping watching some youtube vidoes will be enough to get me started. Thanks!

brij2006 · October 2013

@rainzzzy It's actually fairly simple. Just takes a lot of elbow grease and time.

Here's a very descriptive link on how to strip and re-stain an existing piece.
http://www.lowes.com/cd_Refinish+Wood+Furniture_39774404_

The easier way would be to re-paint the piece of furniture. Then you pretty much just sand the piece to rough up the finish on it, to allow the paint to stick. Then paint it. Here's a link from Bob Villa that has some How-to's on it.
http://www.bobvila.com/articles/2293-paint-makeovers-an-expert-tells-all/

The main suggestion I can make is to only re-finish solid pieces. If they have laminate coverings, it will be a pain and you risk sanding the laminate off or it peeling. It just doesn't look pretty, trust me.

Ducktale · October 2013

brij2006 said:

The main suggestion I can make is to only re-finish solid pieces. If they have laminate coverings, it will be a pain and you risk sanding the laminate off or it peeling. It just doesn't look pretty, trust me.

This was what I was going to say. Don't both re-finishing cheap furtniture, only high quality, solid wood pieces that just need to be updated or you want a change.

My other advice after just researching, is do not skimp on drying times between coats, in fact, to be safe, err on the side of letting things dry between coats longer. It takes patience, but if you don't, things could chip and peel and scratch and all your work would be for nothing. And when you're all done, let it cure in a dry area for a good long time.

(I MAY have learned that the hard way years ago)

And you'll want to do some sort of finish over the top of paint or stain, polyurethane or something along those lines.

Mama-Bear · October 2013

Appliances. My SIL just bought an established home and had to buy a fridge. We purchased a new construction home in July 2009 and had to buy a fridge and ceiling lights for the bedrooms, living room, and dining room (boob lights were in the halls and the kitchen had a light).

hoffse · October 2013

That's a good idea - I'm pretty crafty; I've recovered old seat chairs, sponge painted some funky accent pieces for my room that I got at thrift stores, etc.

I've never tried to make anything look really brand new though - but it's probably worth a shot, especially with some of the hand-me-downs we got. We plan on getting rid of them eventually anyway, so that's a good idea.

The lazy boys from my parents are fabulous old chairs and have great bones... but the fabric is from the 80's. It's threadbare and this awful terracotta color that I can never seem to make work right. I've thought about trying to reupholster those myself... H thinks I'm crazy for even considering it, but I figure I can buy a heavy duty air compressor, a pneumatic staple gun, and good fabric for around $400. It would cost at least $500 to have a professional re-cover just one chair. Purchasing brand new ones of a similar style would cost $1,000 each... So if I could DIY that project, we'd be way ahead. And then H would have an air compressor to play with. Win-win?

Oh my plans...

vlagrl29 · October 2013

We often check out the lowes ideas magazine to check out projects we may want to do on our own. last year DH and I made a mossaic mirror all by ourselves and hung it in the hallway. Brand new that mirror would cost $400-600 at the store and I think we made it for around $20 and it looks just like the ones you buy.

vlagrl29 · October 2013

Here is what the finished product looked like. I love it!

hoffse · October 2013

LOVE that mirror!

I feel like DIY home improvement falls somewhere between the "crafts" board and the "decorating and renovating" board.

I think there should be a board dedicated to MM home improvement projects like that mirror and brij's refinished furniture.

Or maybe MM should start it - after all, a major reason to DIY is to save money!

CuriousKiddosMama · October 2013

One more thing that I don't think has been said- new locks. I've never been comfortable moving into a house and leaving the existing locks. I don't want the old homeowners/any random person who has a copy of the key to have access to the house.
And for insurance, I agree with PP figure 100-120 a month for homeowners. If it's less then that's awesome.

CuriousKiddosMama · October 2013

Oh, and you can refinish furniture that has a laminate surface, but the best way to do that is by painting it. Stripping the surface can ruin it like everybody else has said. It is a fairly easy process to refinish wood, just make sure you take your time and don't rush things.

Home start-up budget

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