One of my friends closed on her first place about a month ago. Now that she’s mostly moved in, I thought it would be a fun/nerdy thing to go over all of the expenses that she’s incurred. As I mentioned in my last real estate post, I have to hold off on thinking about making a home purchase because a down payment would consume me and I would have no money left to buy all of the things that would actually fill the house. Analyzing my friend’s expenses was a perfect chance for me to really understand that. The specifics for this place are:
- Southern California condominium
- Newer construction (2003)
- 1,200 square feet
- 2 bedrooms, 2.5 baths
- Tri-level with two-car garage
Expenses in the Form of Suede Sectionals and More
Appliances: $0
Every home purchase is different and in this case, my friend paid exactly $0 for appliances. The stainless steel refrigerator, dishwasher and oven were included with the purchase, as well as a stackable washer and dryer.
Painting: $1,300
The house had a nice color scheme but the walls and paint showed a lot of wear, so she needed a painter to match the colors and paint some high ceilings in the living room, and complete a simple paint job in the two bedrooms. She received three estimates that varied wildly: The first was $2,000 for the whole job, the second was $1,300 for the whole job and a third was $2,300 for just the living room. In addition, not all of the contractors offered an itemized estimate. She did some research and went with the lowest bid that explained how the estimate was generated (showing the cost of materials and labor) and was very pleased with the results.
New Carpet: $760
The living room carpet needed to be replaced. Although the living room is fairly small, it is just wider than 12 feet and carpet is manufactured in 12 foot widths, so this became a more expensive item because of those few extra inches.
Carpet Cleaning: $300
The carpet on the stairs and in the bedroom was in better shape but still needed to be cleaned. She found a local company to complete the job quickly.
Furniture and Decorations: $3,700
Budget killer!! But seriously, my friend did not even go crazy in this department. She had to buy a lot of stuff since she was previously living with roommates and they owned most of the living and dining room furniture. So besides the little items like curtains ($100), bedding ($170), rugs ($300) and a TV stand ($150), there was a sectional ($1,100), really nice dining table and chairs ($1,080), bedroom furniture ($800) and a television, which was her mom’s housewarming present to her.
Total Damage: $6,060
$6K to furnish and ready your first place is not bad at all. There will still be little things to buy, and I didn’t include the cost of small kitchen appliances, dishes or silverware (or the Dyson vacuum which is another big-ticket item), but those purchases will continue to happen for a few months after you move into your first place on your own. If you rent your current place without roommates, you would probably already have most of the kitchenware. But then you may find you need to decorate the half-bathroom and drop a clean $200 at TJ Maxx on some unsuspecting Saturday afternoon. I know I would not be ready for all of those expenses, so getting to see my friend go through the process was an excellent lesson for me to wait until I am better prepared financially. So even though you may have saved a 10-10% down payment, don’t discount the other homebuying expenses that will start to come up after closing and moving into your new home.
Other Lessons Learned:
- Estimates will range greatly, so ask for referrals, research online where you can, or find someone you know who can confirm that the estimate makes sense.
- Use your real estate agent as a resource to locate services like carpet cleaners, painters or handymen.
- Look for local companies who can offer a discount to residents over using the “big name” company.
- Take your time in making purchases. You don’t have to buy your couch from the same place you bought your bedroom furniture. The first few months are a transition so your place doesn’t need to be instantly complete.