Unveiling the Hidden Costs of Buying a Home in Northern Michigan

When it comes to purchasing a home, many people focus on the down payment and mortgage, but the reality is that there are numerous hidden costs associated with buying and owning a home. Geno D’Angelo, your trusted local Northern Michigan real estate agent, is here to shed light on these often-overlooked expenses. Whether you're a first-time homebuyer or a seasoned investor, being aware of these costs is crucial. Subscribe to Geno's channel for expert advice on navigating the Northern Michigan real estate market. Today, let's delve into the hidden costs you need to be prepared for when buying a home in Petoskey.

1. HOA Initiation Fees: While many are familiar with regular Homeowners Association (HOA) fees, some Northern Michigan HOAs have initiation fees. Notably, Birchwood in Harbor Springs imposes a $10,000 initiation fee. Buyers are often surprised by this additional expense, potentially influencing the overall affordability of a house. Some sellers in Birchwood may offer to cover this fee for buyers.

2. Private Road Agreements: Homes on private roads in Northern Michigan come with responsibilities for homeowners. Private road agreements are legal documents that outline the financial contributions of homeowners for road maintenance. Although not a significant expense, it's an unexpected factor that surprises buyers in the region.

3. Home Inspection: Home inspections are vital, and in the current market conditions, few buyers are waiving them. Costs vary based on square footage and optional add-ons such as well and septic inspections, chimney inspections, or water tests. Be prepared for a range of $300 to $1000.

4. Extra Inspections: Issues discovered during the initial inspection may lead to additional inspections, potentially ranging from free consultations to a few hundred dollars. Professionals may assess specific areas like foundations or roofs.

5. Appraisal Fees and Appraisal Gap: Lenders require an appraisal with fees ranging from $400 to $1,200. In rare cases, an appraisal may reveal a gap between the home's value and the purchase price, requiring negotiation between parties.

6. Underwriting Fees: Lenders charge underwriting fees for finalizing your loan, typically ranging from $300 to $900, depending on the lender and loan type.

7. Recording Fees and Title Insurance: Recording fees (around $50-$70) are incurred for recording the deed to the county. Title insurance, ranging from 0.5% to 1.0% of the home's purchase price, is essential to protect against unknown claims or defects on the property's title.

8. Trash Service: Often overlooked is the upfront payment for trash services in Northern Michigan. With multiple independent providers, buyers may need to pay for the entire year immediately after closing.

Buying a home in Northern Michigan involves more than meets the eye. From initiation fees to unexpected inspections, being prepared for these hidden costs is essential. Ensure a smooth and painless home buying process with the right representation. Subscribe and hit the notification bell to stay informed about Northern Michigan real estate. If you're considering a move to Northern Michigan or have questions about the area, call Geno D’Angelo at 231-487-6141.