Courtesy of Kelly Burch
Kelly Burch's home on more than two acres in rural New Hampshire cost $170,000.
- We recently relocated to a small town in rural New Hampshire, where we bought a house: a three-bedroom, two-bathroom, 2,700-square-foot foreclosure on 2.3 acres for just $170,000.
- We put just 5% down to keep cash on hand for repairs, so we paid $14,862 at the closing. About half of that was closing costs like the title insurance and underwriting fees.
- Then, moving costs and repairs to the home were almost more than our down payment.
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My husband and I live in small town New Hampshire with our two daughters and our dog. We recently relocated from a medium-sized town (population 13,000) to a town that is exactly one-tenth the size (population 1,300). There, we purchased a three-bedroom, two-bathroom, 2,700-square-foot house on 2.3 acres for just $170,000.
Getting that much house (and land) for so little money was astounding, even to me. Five years ago, when I lived in Massachusetts, I would squeal with delight whenever I saw a real estate listing under $200,000. My husband and I weren't ready to buy yet, but we were keeping an eye on the market, and learned to look for these rare gems. These bargain homes were in need of major repairs, in terrible neighborhoods, or both.
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Four years ago we moved to rural New Hampshire for my husband's job, and realized the real estate market here was vastly different. We bought our first home, a 900-square-footfixer-upper, for $55,000. We outgrew that house after three years, and set a budget of $220,000 to find a larger house. We wanted acreage, at least three bedrooms and an office space, and a better school district. Getting these things for $220,000, even in New Hampshire, would be challenging, so we shopped mostly for foreclosures in order to stretch our budget.
We ended up getting lucky, finding a great house that fit all our boxes, for less than we had budgeted. Here's exactly what it cost to buy our home.
Down payment and closing costs were $14,862
We chose to put just 5% down on our home purchase. We knew that we wanted to keep cash on hand, because the house would need some repairs. So, our down payment cost was $8,500. We had already paid $1,000 in "earnest money" upon making our offer, so we needed to bring $7,500 for our down payment on the day of closing.
However, that's only the tip of the iceberg for the costs that you need to bring to closing as a seller. We ended up having to bring almost the same amount for mortgage fees and other charges. These included:
- Property Tax: $2,773
- State title transfer tax: $1,427
- Mortgage origination fees: $395
- Appraisal fees: $500
- Credit report fees: $76
- Underwriting fees: $795.00
- Legal fees to title attorney: $695
- Lender's title insurance: $490
- Owner's title insurance: $220
Overall, we brought $7,382 for various mortgage and legal fees, as well as for the taxes that we needed to escrow for the property.
We immediately got a check back, but quickly spent it
During our negotiations on the property, we asked the bank that owned the home to contribute $5,000 toward the cost of repairs for the plumbing system in the house. It had frozen due to the bank not properly winterizing the property. They agreed, so I walked out of the closing with a $5,000 check made out to me.
However, that check didn't last long. Before we could move into the house we needed to have running water. We spent $3,487 on getting the plumbing up and running, plus another $480 on an emergency call when a pipe burst the first night we stayed in the home.
In addition to repairing the plumbing, we needed to invest in a radon mitigation system. Radon is a naturally occurring gas that can seep into your basement and cause harm. The system was $1,195.
Because our home has well water (not public water) we also needed to have the well shocked and cleaned to know the water was drinkable. This cost $475. We also hired a professional carpet cleaner at a cost of $495, since we couldn't afford to replace the carpets, but wanted to know they were clean for our kids to play on.
Overall, essential repairs and services to the house cost $6,133. When you factor in the contribution from the seller, we spent $1,133 out of pocket on repairs and services.
But let's not forget what we spent before purchasing the home
Because we were purchasing a foreclosure, we had limited information on our property before we bought it. For example, the bank that owned the home would not allow us to turn on the plumbing so we could test the water, and they wouldn't let us inspect the septic. Because of this, we spent money doing as much testing as possible.
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Here's what we spent on inspections and testing before our purchase:
- Home inspection: $750
- Radon testing: $200
- Well water testing:$150
- Electrical service activation: $105
- Plumbing repair estimate: $50
In total, we spent $1,255 on testing before we purchased the property. We also put $1,000 down on the property with our offer, so our total out-of-pocket before the purchase was $2,255.
And then, there's the cost of moving
Luckily, my husband and I were able to move over a weekend, so we didn't miss work. We did the heavy lifting ourselves, to save on moving expenses. Before the move we gathered used cardboard boxes from local stores, because moving boxes are shockingly expensive. Overall, this kept our moving costs minimal. We spent $180 on renting a truck, about $70 on gas, and about $25 on packing tape and bubble wrap. All in all, our moving expenses were about $275.
Overall, getting into our new home cost us $18,525 out of pocket, in addition to the $161,500 we mortgaged. We had budgeted about $20,000 to cover the cost of down payment, closing costs, moving and necessary repairs, so we were thrilled to come in just under this amount. Even with the cost of repairs and moving, we stayed well under our initial budget of $220,000, and found a house that we love.