Home Ownership Phantom Costs

Home Ownership Phantom Costs

  • CREM Group
  • 01/8/24

Don’t Forget These Costs!

Whether you are buying a home in probate or a “regular” (non-probate) home, you are bound to have some costs you forgot about as you looked forward to owning your new home.

Normal Operating Costs

Below are a few normal ongoing costs. Budget for these—especially if it’s your first time owning a home.

  • Utilities can be quite high. Heating or air conditioning a big home can be expensive.
  • Property taxes could be a “new” cost for an apartment dweller or someone who has moved from another state or another county or country.
  • Appliances. Replacing appliances when the previous owner took the washer-drier, refrigerator, and barbecue can run into a few thousand dollars. Okay. Maybe taking the barbecue is over the top. But some people take their free-standing stove, and you must buy a new one when you move in.
  • Homeowners’ insurance. It’s a new expense if you’ve never owned a home.
  • Landscaping upkeep. Do it yourself? If you have the time, it’s great, but it may be too much to handle. Don’t forget to budget for it.
  • Yearly or biannual odds and ends. Rain gutter cleaning, chimney sweeping, pest control, tree-trimming, and other non-DIY-friendly tasks that require special equipment or dangerous ladder-climbing.
  • Homeowners Association or planned community dues in some neighborhoods can be pretty high. Check first!

Not the Everyday Stuff

You never know when sewer lines will break, if the HOA will issue a new assessment for “something-or-other,” or if natural disasters not covered by a government agency or your insurance might occur. Stuff happens.

Do Your Homework

We recommend going to the State of California Department of Real Estate, where you can find many tips on buying homes here. For instance, they suggest that once you find a house that meets your family’s needs, you should consider hiring a qualified inspector to check the home’s plumbing, electrical, and structural integrity.

The idea is that by having the house assessed for possible repairs before buying it, you’re allowing yourself the chance to negotiate any needed reparations with the seller.

How to Minimize “Surprises”

As realtors for many years in Southern California and specifically as probate realtors, we at The CREM Group have seen that maintaining a home requires unexpected expenses for repairs and upkeep. Whether your new residence is in Orange County, LA County, or San Bernardino Counties, basic homeowner costs must come before the ‘fun’ parts, like remodeling and landscaping.

People sometimes spend on the fun things and have no money left for the uh-oh (ROOF LEAKS) surprise. Remember to include a surprise stash in your budget when you decide to buy a home. But how do you minimize the surprises?

One of the things you can do is to be aware of the Disclosures required by the State. Before you buy the home, you are given some useful, basic information about the property.

Two of the most critical disclosures in a residential purchase transaction are the Real Property Disclosure Statement and the Agency Relationship Disclosure.

  1. Real Property Disclosure Statement

The seller completes the disclosure, which covers the property’s physical condition and uncovers potential hazards or known imperfections that may be connected with it. While it is the seller who is mainly accountable for the problems presented in this disclosure statement, the real estate agent is also responsible. As your real estate agents, we conduct a visual inspection of the property (even in probate cases, we do this), and we mention any readily observable defects we find during our review.

The Real Property Disclosure Statement also presents any assessments, special taxes, or other elements that may have a significant effect on the property value, and the future costs that might accrue to owning that property. This statement goes a long way toward minimizing surprises.

  1. Agency Relationship Disclosure

As your real estate agents (probate or otherwise), we at The CREM Group are required to provide you with a written document stating whether we are representing you as the buyer exclusively or as the seller only. Sometimes we find that we are acting as a “dual agent” representing both the buyer and seller. This does not have a specific effect on the homeowner’s costs. However, it is part of ensuring you carefully review and understand everything that surrounds your purchase, which includes what responsibilities go with the real estate agent of your choice.

What Repairs Destroy Most Budgets?

If you’ve looked at your budget, and think, “Okay, Honey, I’m pretty sure we can make this work,” you’d best consider the following. Here are some budget busters.

  1. Replacing a roof is a huge expense.
  2. Plumbing repairs can be nasty-costly.
  3. Experiencing foundation problems from California’s earthquakes.
  4. Flooding and weather-related situations (a tree falls on your home), especially if your insurance policy fine print says it’s not covered, or your deductible is high.

In a probate purchase (fixer-uppers in probate may or may not be a good idea), the home is often marketed and sold “as is.” The house price is usually reduced; however, due diligence requires the same inspections as for any home. It’s best to do the inspection to ensure the repairs do not eat up the discount off the probate house's price to make it livable or re-sellable for a profit.

As noted, these conservatorship and trust homes can provide a roof over your head if you can wade through the probate process (which can last up to a year). As a probate property seller, you have costs, too, and we covered these items in a post from earlier this year.


What We Recommend

All is not gloom and doom. Forewarned is fore-armed, as we always say. We suggest:

  1. Having a good idea of what repairs could be necessary.
  2. Putting aside money every month to “prepare for the worst.” How much? Some people recommend putting aside an average of 1 to 2% of the home’s value away every year for that rainy-day roof-repair. You may use it in some years, and not others.
  3. Trying to avoid the catastrophe by repairing weakened or old items around your home. Inspect the roof. Hire a plumber to check the lines every few years. Termites should be handled every few years, or they can eat away your garage or the kids’ playroom if they’re really hungry.
  4. Don’t let the phantom costs spook you!

Work With Experienced Individuals

We are a broken record. Surround yourself with people (like The CREM Group) who know markets, homes, neighborhoods, and lenders as you face any kind of real estate transaction—probate, conservatorship, trust, residential, commercial, or otherwise.

Don’t Be Afraid to Buy a Home!

It’s still the American Dream. And when you do, you can:

Smile. You’re a property owner! Congratulations.

As long time probate real estate agents and as attorneys working in and around all kinds of properties in Los Angeles and Orange Counties, the CREM Group has made sure we support our clients, so they know the alternatives to buying, selling, or renting probatetrust, and conservatorship homes and commercial properties in California.

As always, contact us by email here if you have any questions about real estate, probate real estate, conservatorship, or trust real estate properties, especially in Los Angeles and Orange Counties in California.


Mark Cianciulli, Esq. is the founder and CEO of The CREM Group.
[email protected]

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DISCLAIMER: This content is meant purely for educational purposes. It contains only general information about real estate and legal matters. It is NOT legal advice and should not be treated as such. We recommend consulting a legal or tax professional before acting on any material, opinion, or point of view described herein.

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