On the Move: Know costs involved when relocating to Houston

August 19, 2018

There are many expenses associated with purchasing and owning a home in Houston, including both the initial out-of-pocket expenses that are incurred as part of the home-buying process, as well as the ongoing monthly and annual expenses of homeownership.

When relocating to Houston, it’s important for home buyers to have an accurate picture of all of the costs involved, so that they will have a better idea about what they can afford.

Ideally, home buyers should apply for and be preapproved for a mortgage prior to putting an offer in on a property.

While this might tell them how much home they can afford in terms of a monthly mortgage amount, there are also other factors that must be included and considered when calculating the true cost of a home.

Richard Ray, a Realtor with John Daugherty, Realtors, said there are seven key areas he believes people should think about as it relates to the costs of purchasing and owning a home in Houston:

1. Transportation costs

“If a home buyer wants to live close-in, they need to think about how close they will be to their job, and what the transportation cost will be if they want to live in Katy, for example, versus inside the Loop.”

2. Property taxes

“Property tax rates differ depending on the part of town. In Houston, the rate is pretty much the same, but we have a lot of other little towns that are around and within the city, so home buyers need to look at what their property taxes will be. If they are coming to Houston from a state that has a state income tax, they are relieved to know that we don’t have a state income tax in Texas, especially since our property taxes can be pretty high.”

3. Insurance

“Insurance cost is important because of where Houston is located. A home could be in a high-risk flood zone, which could mean a higher rate for insurance coverage, or it could be down by the coast and windstorm coverage might be required.”

4. Utilities

“A lot of times people ask about utility costs, but not always, and when they don’t they can be surprised by the cost. So, it helps to have some idea of the utility rates for the home, and the deposits they might need to make to the utility companies.”

5. Homeowner fees

“Depending on where the home is located, it could have a homeowners association, or it could be in a MUD (municipal utilities district), and have other fees that are due.”

6. Cost of living

“People need to understand the basic cost of living in Houston, versus what it costs in Chicago or Denver or wherever it is that they are moving from.”

7. Home purchase cost

“For the home purchase, home buyers will need to pay earnest money up front, an option fee, and inspection fees. Inspection fees vary widely depending on the type and age of the home, but the biggest thing that I emphasize is the need to fully inspect a property.”

In Texas, the buyer pays the seller an option fee for the unrestricted right to terminate the contract for any reason within a specified time period, known as the option period.

During this timeframe, the buyer has the opportunity to have various inspections performed to evaluate the property’s condition.

“Many people move here from out of state and outside of country, and so they need to be prepared,” said Rita Donnelly, a Realtor with Heritage Texas Properties. “So, I give them an outline of the home-buying process before they get here.”

When it comes to the option period and option fee, Donnelly said that she explains that both are negotiable.

“We typically offer anywhere from $25 to $50 a day, depending on the price of the home, and of course how much the buyer wants it,” said Donnelly. “Generally, option periods are around 10 days, but they can be five days, or they can be extended and could be as long as 15 days.”

Donnelly echoed Ray’s comment about inspection costs varying based on the type and age of the home, as well as the specific inspections that the home buyer wants to have done.

She said that she recommends separate AC and roof inspections, in addition to a general home inspection and wood-destroying insect inspection.

If the home is stucco, she recommends that the home buyer have a stucco inspection.

“I tell my relocation clients that inspections can run anywhere from about $700 to $1,500 or more, depending on what they need to will give themselves peace of mind about the property that they are purchasing,” Donnelly said.

Michelle Sandlin is an award-winning writer, journalist and global mobility industry expert. Follow her on Facebook: www.facebook.com/TheMichelleSandlin and on Twitter: @MichelleSandlin. Also visit “On the Move” at blog.chron.com/onthemove.

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