Quantitate Before you Buy or Sell

by : Reed Brinton

Hidden costs are the last thing anyone wants after spending months on a home sale. Even a couple thousand dollars in extra expanses can break a buyer or seller's budget. Many people to avoid moving altogether for this reason.

The good news is moving costs are easy to plan for if you start early enough. A quantitative approach here is often the best, providing the most transparency between moving costs, realty costs, and lifestyle costs. By applying quantitative methods before you buy or sell, you'll take a lot of uncertainty out of your next real estate transaction, and save money down the road.

The first step is getting to know the moving process. There are certain costs you can count on whether you're buying or selling a home, but this article separates the two categories to make it easier.

For Buyers

Moving into a new home can include a wide variety of costs before and after the sale. Before you take ownership it's important to look at the home from an objective point of view, separating the the investment potential from the value to you as a home. You can also consider your own expectations, and how much money you expect to make on the investment. If you make sure your expectations are realistic, you'll be well-prepared for changing market conditions, and the aging of the property.

As a buyer, you'll also want to consider how much it will cost to relocate. Large purchases like new furniture and appliances should be carefully planned before you move in, as should small purchases, like yard tools and household necessities. Daily costs such as groceries and the general cost of living in your new area should also be considered here. You may also have to join a new neighborhood association, or spend more money on transportation when you move to a new place.

For Sellers

Moving out can also be costly, but these costs are often easier to plan. As a seller you'll often pay for improvements to your property, which may or may not be part of the final sale price. It's also important to plan for and track any improvements which might be made before the property is listed.

Realtor and listings fees also fall to the seller during a real estate transaction. You'll know early on how much it's going to cost to work with a Realtor or list your home with an FSBO association, but there are also indirect costs, like the time you spend marketing your home, to consider.

After you quantitate you'll be confident as a buyer or seller, and more prepared financially.