The vast majority of homeowners say they’ve been faced with significant and unexpected costs within the first year of them buying a home.
That’s according to a survey from the insurance firm Hippo, which found that 77% of home buyers have suddenly found themselves encumbered with a huge bill having already stretched their budget to buy a home.
The unexpected costs are almost always the result of home repairs or maintenance, the survey found. According to Hippo, 34% of respondents say they had to deal with first year home maintenance costs of less than $1,000, while 30% had to carry out repairs of between $1,000 and $2,499, while 23% had to pay $2,500 to $5,000 on repairs. An unlucky 10% faced repair costs exceeding $5,000 in their first year.
Steve Wilson, a senior underwriting manager at Hippo, told CNBC that something such as serious plumbing problem could cost upwards of $10,000 to fix
These costs may not have been such a worry before, but with many buyers waiving the home inspection contingency with the housing market so competitive, they could be in for a big surprise, Wilson said. He advises that an inspection should still be performed even if it wasn’t a part of the home buying process. Buyers should carry out an inspection once they’ve taken possession, he said, as it will highlight issues that will soon need attention.
Homeowners should be aware of the age and upkeep of major housing systems. For example, furnaces usually last 15 to 20 years if properly maintained with the help of a furnace repair technician. When it's time for a new oil or gas furnace installation, make sure to look for a unit with higher energy-efficiency rating. Further, owners should ensure their homeowners insurance is up to date and that they could afford their deductible in the event of a claim.