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Home ownership remains at the heart of the American Dream. By now, everybody and his brother has learned how to use a rent vs. buy calculator to understand the financial advantages of being the lord of your castle. And the real estate industry has sold you on the wisdom of owning a  mansion that will shower you with bliss and enhance your lifestyle and your love life. But both the calculator and the realtor conveniently leave out a few details that you ought to factor in before taking the plunge. The minute you move into your new abode, you quickly come to terms with expenses that nobody ever told you about and if they did, they definitely underestimated them. If you bought a resale home, these 5 things will probably make you wince. Haven’t bought a place yet? Before you take that $8,000 first time homebuyer credit, you might want to read this first.
Furniture:
No matter how much you tell yourself that you are going to be fine using your old apartment furniture, something strange happens when you buy a home. All of a sudden the old stuff just isn’t good enough. The extra square footage that seemed like a good idea, comes with an enormous price, the cost of filling it up. Even if you are a pro and buy your furniture cheaply, furnishing an extra 700 to 1,000 square feet can cost you an extra $8,000 to $15,000 that you hadn't planned for. That old couch that you inherited from your faternity house will have to go. And once you replace it, the new addition will clash with the four unmatched dining room table chairs. So get ready for a furniture bill in the 5 figures. No matter how restrained you are in your spending, once you shell out $200,000, $300,000, or was that $500,000 for your new digs, you’re likely to lose the battle over keeping the frat house couch.
Maintenance:
The online calculator, which was designed by a geek living in a studio apartment, factors in a miserly half percent of the purchase price to cover your annual maintenance expenses. Your real estate agent assured you the house was very well maintained and the inspector found few issues. What they all failed to tell you is that the twenty year old roof that came with the house turns out to be a seven year roof that caves in with the first rainstorm. That's when you find out that your new couch can float and double as a lifeboat. You call up your agent and he commiserates with you over the unfortunate consequences of global warming and blames the Chinese. The electric blows the moment you plug in your new TV for it’s inaugural run. Your very first winter, the "almost new" water heater gets infected with sudden fatigue syndrome. If you mistook the movie "The Money Pit" for a comedy show, you'll soon discover that it is a real life documentary. When life imitates art, it's not so funny.
Don't think that condo or townhouse is going to help you out either. Just when you settle in, the condo association will vote to make a $250,000 emergency renovation to replace the defective Chinese drywall. Your share - a whopping 12 thousand dollars. Your new neighbors will tell you it's the first major repair in 15 years. Maybe that's why that little old lady sold you the place so cheaply. So plan on having at least 5 years of maintenance expense at the ready because things go wrong and it tends to happen all at once.
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