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5 Hidden Costs of New Homes All Buyers Should Know

5 Hidden Costs of New Homes All Buyers Should Know

Buying a home is a daunting prospect for many, but it is a well-known truism that it is better to buy a home than rent one. When you rent a place, you are just throwing money away while buying a home is an investment that will hopefully pay off.

But that comforting logic starts to fall short when you consider the hidden costs of owning a home. Just as an individual moving out of his parents’ home must deal with responsibilities he never considered before – like cooking – a homeowner must consider additional costs and expenses that he did not have to worry about when renting. Here are five such expenses to consider and advice on how you can reduce their cost.

1. Home inspections

The first hidden costs show up before you even close a deal. You can take a look at the house all you want beforehand, but many lenders will require you to hire a professional home inspector before you sign. Even if the lender does not, you should hire one anyways. A professional home inspector can make sure that your home does not have any sudden surprises such as poor wiring or a termite infestation, and require that the seller fixes those problems.

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Hiring a professional home inspector can cost a couple hundred dollars, but it can save you a great deal and prevent you from buying a faulty home. Just be prepared to eat the initial expense.

2. Closing costs

You inspected the home, found that everything is good, and have your offer accepted. Then you find out that you have to pay an additional few thousand dollars up front in the form of closing costs. Closing costs are additional fees such as escrow fees, attorney fees, and other expenses that are usually on the buyer. Zillow states that the average buyer pays about $3,700 in closing fees.

While it is not possible for a buyer to completely avoid these costs, it can be lowered. Shop around with multiple lenders to try and get the best deal on your mortgage and ask if the seller may be willing to cover some of the costs.

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3. Moving

You may be able to get out of moving expenses if you have a wide cadre of friends willing to help you out and if your home is nearby. But the odds are that you are going to have to hire a moving company. If you rely on a professional moving company, then the average cost of moving out of state is over $4,000

If you are moving a long way and want to budget, then you can lower the costs by making sure you are only moving the essentials and possibly taking care of the move yourself with a U-Haul truck. But be prepared to pay a few extra thousand dollars for a clean move without chaos.

4. Maintaining your home and yard

One of the biggest changes towards owning a home is the fact that when something goes broke, it is on you and not the landlord to fix things. And there is always something that needs to be improved or fixed.

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You may be willing to mow the lawn and take care of the yard work yourself. However, that still entails the cost of purchasing the necessary equipment yourself as well as the time needed to mow the lawn and so on. Then there are other expenses such as fixing your heating, air conditioning, and plumbing. While it is possible to handle issues like this if you really know what you are doing, it is just as likely that you burst a main and lose far more money in the resulting repair costs.

You do not want to skimp on home repairs if you want to uphold its value, so budget a certain amount of money every year for repairs. There are a few guides for how much to save, but you should generally be looking to save something around one percent of the home’s value every year.

5. Property Taxes

Death, taxes, you know the saying. But what you may not know is that your mortgage’s monthly bill will also account for property taxes and homeowner’s insurance. This is especially true if you’re looking to earn an investment with a 1031 exchange property. If you use an escrow account, which is required if your down payment is less than 20 percent of the home’s value, then you don’t pay your property taxes directly. Instead, you send your money to a mortgage company who pays your taxes for you. And there is also the scenario where you can be hit with a payment for a couple months’ worth of property taxes right when you move in.

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Dealing with property taxes can be incredibly confusing and varies from area to area. The best advice is to be prepared and talk with your mortgage company about how much you will have to pay as well as any potential surprises.

Featured photo credit: Moyan Benn via flickr.com

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Last Updated on September 16, 2019

How to Stop Procrastinating: 11 Practical Ways for Procrastinators

How to Stop Procrastinating: 11 Practical Ways for Procrastinators

You have a deadline looming. However, instead of doing your work, you are fiddling with miscellaneous things like checking email, social media, watching videos, surfing blogs and forums. You know you should be working, but you just don’t feel like doing anything.

We are all familiar with the procrastination phenomenon. When we procrastinate, we squander away our free time and put off important tasks we should be doing them till it’s too late. And when it is indeed too late, we panic and wish we got started earlier.

The chronic procrastinators I know have spent years of their life looped in this cycle. Delaying, putting off things, slacking, hiding from work, facing work only when it’s unavoidable, then repeating this loop all over again. It’s a bad habit that eats us away and prevents us from achieving greater results in life.

Don’t let procrastination take over your life. Here, I will share my personal steps on how to stop procrastinating. These 11 steps will definitely apply to you too:

1. Break Your Work into Little Steps

Part of the reason why we procrastinate is because subconsciously, we find the work too overwhelming for us. Break it down into little parts, then focus on one part at the time. If you still procrastinate on the task after breaking it down, then break it down even further. Soon, your task will be so simple that you will be thinking “gee, this is so simple that I might as well just do it now!”.

For example, I’m currently writing a new book (on How to achieve anything in life). Book writing at its full scale is an enormous project and can be overwhelming. However, when I break it down into phases such as –

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  • (1) Research
  • (2) Deciding the topic
  • (3) Creating the outline
  • (4) Drafting the content
  • (5) Writing Chapters #1 to #10,
  • (6) Revision
  • (7) etc.

Suddenly it seems very manageable. What I do then is to focus on the immediate phase and get it done to my best ability, without thinking about the other phases. When it’s done, I move on to the next.

2. Change Your Environment

Different environments have different impact on our productivity. Look at your work desk and your room. Do they make you want to work or do they make you want to snuggle and sleep? If it’s the latter, you should look into changing your workspace.

One thing to note is that an environment that makes us feel inspired before may lose its effect after a period of time. If that’s the case, then it’s time to change things around. Refer to Steps #2 and #3 of 13 Strategies To Jumpstart Your Productivity, which talks about revamping your environment and workspace.

3. Create a Detailed Timeline with Specific Deadlines

Having just 1 deadline for your work is like an invitation to procrastinate. That’s because we get the impression that we have time and keep pushing everything back, until it’s too late.

Break down your project (see tip #1), then create an overall timeline with specific deadlines for each small task. This way, you know you have to finish each task by a certain date. Your timelines must be robust, too – i.e. if you don’t finish this by today, it’s going to jeopardize everything else you have planned after that. This way it creates the urgency to act.

My goals are broken down into monthly, weekly, right down to the daily task lists, and the list is a call to action that I must accomplish this by the specified date, else my goals will be put off.

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Here’re more tips on setting deadlines: 22 Tips for Effective Deadlines

4. Eliminate Your Procrastination Pit-Stops

If you are procrastinating a little too much, maybe that’s because you make it easy to procrastinate.

Identify your browser bookmarks that take up a lot of your time and shift them into a separate folder that is less accessible. Disable the automatic notification option in your email client. Get rid of the distractions around you.

I know some people will out of the way and delete or deactivate their facebook accounts. I think it’s a little drastic and extreme as addressing procrastination is more about being conscious of our actions than counteracting via self-binding methods, but if you feel that’s what’s needed, go for it.

5. Hang out with People Who Inspire You to Take Action

I’m pretty sure if you spend just 10 minutes talking to Steve Jobs or Bill Gates, you’ll be more inspired to act than if you spent the 10 minutes doing nothing. The people we are with influence our behaviors. Of course spending time with Steve Jobs or Bill Gates every day is probably not a feasible method, but the principle applies — The Hidden Power of Every Single Person Around You

Identify the people, friends or colleagues who trigger you – most likely the go-getters and hard workers – and hang out with them more often. Soon you will inculcate their drive and spirit too.

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As a personal development blogger, I “hang out” with inspiring personal development experts by reading their blogs and corresponding with them regularly via email and social media. It’s communication via new media and it works all the same.

6. Get a Buddy

Having a companion makes the whole process much more fun. Ideally, your buddy should be someone who has his/her own set of goals. Both of you will hold each other accountable to your goals and plans. While it’s not necessary for both of you to have the same goals, it’ll be even better if that’s the case, so you can learn from each other.

I have a good friend whom I talk to regularly, and we always ask each other about our goals and progress in achieving those goals. Needless to say, it spurs us to keep taking action.

7. Tell Others About Your Goals

This serves the same function as #6, on a larger scale. Tell all your friends, colleagues, acquaintances and family about your projects. Now whenever you see them, they are bound to ask you about your status on those projects.

For example, sometimes I announce my projects on The Personal Excellence Blog, Twitter and Facebook, and my readers will ask me about them on an ongoing basis. It’s a great way to keep myself accountable to my plans.

8. Seek out Someone Who Has Already Achieved the Outcome

What is it you want to accomplish here, and who are the people who have accomplished this already? Go seek them out and connect with them. Seeing living proof that your goals are very well achievable if you take action is one of the best triggers for action.

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9. Re-Clarify Your Goals

If you have been procrastinating for an extended period of time, it might reflect a misalignment between what you want and what you are currently doing. Often times, we outgrow our goals as we discover more about ourselves, but we don’t change our goals to reflect that.

Get away from your work (a short vacation will be good, else just a weekend break or staycation will do too) and take some time to regroup yourself. What exactly do you want to achieve? What should you do to get there? What are the steps to take? Does your current work align with that? If not, what can you do about it?

10. Stop Over-Complicating Things

Are you waiting for a perfect time to do this? That maybe now is not the best time because of X, Y, Z reasons? Ditch that thought because there’s never a perfect time. If you keep waiting for one, you are never going to accomplish anything.

Perfectionism is one of the biggest reasons for procrastination. Read more about why perfectionist tendencies can be a bane than a boon: Why Being A Perfectionist May Not Be So Perfect.

11. Get a Grip and Just Do It

At the end, it boils down to taking action. You can do all the strategizing, planning and hypothesizing, but if you don’t take action, nothing’s going to happen. Occasionally, I get readers and clients who keep complaining about their situations but they still refuse to take action at the end of the day.

Reality check:

I have never heard anyone procrastinate their way to success before and I doubt it’s going to change in the near future.  Whatever it is you are procrastinating on, if you want to get it done, you need to get a grip on yourself and do it.

More About Procrastination

Featured photo credit: Malvestida Magazine via unsplash.com

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