April 1, 2025
Nine Not-So-Obvious Home-Buying Costs
The cost of buying a home is a bit more than just the purchase price you agree to with a builder or seller. And while these aren’t “hidden fees,” they can surprise home buyers as the reality of closing on a new home approaches!
1. HOME INSPECTION & APPRAISAL FEES
Ordering a professional inspection is wise no matter what kind of house you’re purchasing. During COVID buyers waived inspections and appraisals because of rabid competition among buyers. But skipping either one of these can have expensive consequences.
An inspection can run from $500 to $750 depending on where you’re buying your home. Troy Cushatt at Apex Home Services in southeast Denver charges buyers about $375 for a 2500-square foot home and if needed, $135 for a radon test.
Unless you’re paying cash, a lender will order an appraisal to make sure the price you’re paying for the home does not exceed its value. The appraiser will take into consideration similar properties in a nearby radius to calculate the value. Appraisals can cost between $500 and $800 and provide a safety net AND contingency for buyers.
2. HOMEOWNERS INSURANCE
While your lender will require this, many new homeowners are caught off guard by the cost, especially in areas prone to floods, fires or other natural disasters. Average home insurance costs in Colorado are $2,322 per year, according to Policy Genius, or $194 per month for $300,000 dwelling coverage. This is another buyer contingency if a buyer cannot secure affordable coverage or any coverage at all (as is the case in some mountain communities prone to wildfires.)
3. PRIVATE MORTGAGE INSURANCE (PMI)
If your down payment is less than 20 percent, you’ll likely need to pay PMI, an additional monthly expense that protects your lender.
4. CURB APPEAL
While a lot of the landscaping around your house might be up to you and your preferences, some HOAs do designate a certain amount of grass, trees and/or bushes, and sometimes approvals are required. While it may not seem like a huge expense, according to The Sod Guy installed sod can run around $1.25/square foot, and that’s without rototilling, soil amendments and taxes. The cost of bushes and trees depends on how large you want them and then there’s the notion of edging, mulch and gravel.
5. HOMEOWNERS ASSOCIATION (HOA) FEES
If you’re buying in a planned community, don’t forget about probable HOA fees. These can add a significant amount to your monthly housing costs depending on where you choose to live and the amenities and/or inclusions provided by the HOA.
6. CLOSING COSTS
Many first-time home buyers are surprised by the closing costs, which typically range from 2 to 5 percent of the home’s purchase price. These fees cover various services and fees associated with finalizing your mortgage. You’ll also pay the title company to make sure the property title is free and clear of any liens or encumbrances. This can cost between $300 and $500, and there will likely be recording fees either included or on top of the title company fee.
7. PROPERTY TAXES
Property taxes can vary depending on your location and the value of your home. First-time home buyers often underestimate this ongoing expense that tends to rise along with the value of your home. In Douglas County, your property tax is distributed to the taxing authorities that serve the property.
There are over 300 taxing authorities in the county that have certified a mill levy to the county.
8. UTILITIES
While not everybody factors utilities into the cost of a home, if you’re transitioning from renting to buying you may be paying for things you weren’t as a tenant. Things like water and sewer, trash removal, electricity, gas, and sometimes even street cleaning fees might be part of your monthly expenditure.
9. MAINTENANCE AND REPAIRS
Owning a home, especially an existing or older home, means repairs and maintenance.
One rule-of-thumb is to set aside 1 to 3 percent of your home’s value annually for unexpected repairs and regular maintenance – furnace and HVAC check-ups and tune-ups, chimney cleaning, etc.
New Homes, Better Options
The new homes in the master-planned community of Looking Glass have the latest conveniences, systems and appliances – reducing and eliminating the need for costly maintenance and repairs. The Parker neighborhoods give you access to paths and parks, community connections and nearby recreation, entertainment and shopping. Stop by the beautiful model homes from D.R. Horton and Taylor Morrison, check out the multiple designs coming to Looking Glass at Dream Finders and later this year, Richmond American Homes, from the $600s.