For those wishing to purchase a home in Marin County, it’s important know that the costs of home ownership go beyond the purchase price and monthly mortgage payments, property taxes, and insurance.  To make sure you’re prepared, we’ve put together a helpful roadmap that walks you through the costs associated with owning a home in Marin. You will have relatively predictable monthly and yearly costs plus unexpected costs for maintenance and repairs. We hope this summary will help you enjoy your home by turning the unexpected costs into the expected.

Mortgage Payments

Unless you are paying cash for your home, you will have monthly mortgage payments. Your Realtor will suggest brokers who can get you the best deal. See our blog on how to choose a mortgage broker.

You may also be required to obtain mortgage insurance if your down payment is less than 20% of the home’s purchase price. Mortgage insurance lowers the risk to the lender of making a loan, allowing you to qualify for a loan you might not otherwise be able to get. Once you have built 20% equity in the home, you can request to have the mortgage insurance cancelled.

Property Taxes

In California, an annual 1% property tax is levied against the assessed value of a property. If you just purchased your home, the assessed value is typically the same as the purchase price. The assessed value increases each year but cannot increase by more than 2% annually, regardless of changes in market value. Cities and service districts add assessments to finance local services, public works  and other improvements. These vary based on specific community needs and voter-approved initiatives and, on average are about 0.25%. To estimate your property taxes, multiply the home’s purchase price by 1.25%.

Homeowners Insurance

Banks and mortgage companies require homeowners’ insurance before issuing a loan. Cash buyers will also want to protect their costly investment with the proper insurance.

Deciding which policy and insurance company will provide sufficient coverage can be complicated and increasingly difficult. See our blog on obtaining insurance in Marin. In addition to insurance on the building and its contents, you may want to have flood and earthquake insurance coverage.

To help estimate insurance costs, your Realtor will recommend a reputable insurance agent with whom they have good experiences and a trusted relationship. See our blog on choosing an insurance policy and getting the best deal. Remember that premiums may increase annually.

HOA and Condo Fees

If you buy a home within a homeowners’ or condominium association (HOA), you’ll be required to pay a monthly or quarterly fee. This charge covers costs for services that benefit the entire association, like fire insurance, building and roof maintenance, landscaping, and pool maintenance. See more in our blog on the benefits of condo ownership.

When budgeting for these fees, understand that they may increase over the years. In special cases you may have to pay a special assessment for large projects that exceed the existing HOA’s financial plan.

Utilities

Your expenses will include monthly or quarterly charges for gas, electricity, water, and trash/recycling collection. If you use a monitored security system, you may pay a fee for that, too. To get a handle on the amounts you can expect to pay, your Realtor can inquire about the home seller’s usage and average past bills.

Maintenance and Repairs

Homeowners should carefully consider the annual costs of home maintenance. Homes of every type and location deteriorate due to weathering and use. Even newly constructed homes can develop unexpected maintenance issues after a few years. With busy lifestyles, many of us forget to attend to home maintenance issues that seem minor but, when neglected, may become expensive repairs. Budget now to avoid surprises.

Routine Maintenance Tasks

Routine maintenance costs are easier to plan. Here are some of the obvious tasks:

• Cleaning rain gutters.
• Annual repair of irrigation systems.
• Maintenance of HVAC (heating, ventilation, and air conditioning) systems and water heater.
• Chimney sweeping.
• House cleaning services.
• Window cleaning.
• Yard and garden upkeep.

Occasional but Important and Expensive Maintenance Tasks

Here are the major maintenance items that you should expect:

• Exterior painting or staining. The outside of your home may need repainting every 5-10 years depending on weather exposure. If you have wood shingles, these will need repairs, cleaning, and staining.
• Roof repairs and replacement. A roof with asphalt shingles will need to be replaced every 15–25 years. It is important to inspect a roof regularly for missing shingles, defective flashings, moss growth, and pooling water. 
• Drainage. Make sure that water is not collecting near your house. This condition can escalate to expensive repairs. If you have water collecting under the house, consult a contractor or drainage expert to evaluate the risks and recommend solutions.
• Retaining walls. Deteriorating or leaning retaining walls can result in earth movement and in some cases instability of a building.
• Tree care. Consult an arborist to treat unhealthy or unstable trees, make sure tree roots are not damaging structures and tree limbs are not growing above the roof.
• Fire safety. Marin property owners are required to meet defensible space requirements in the 100-foot buffer zone around the residence, which means removing dead and dying grass, shrubs and trees, reducing the density of vegetation and fuels that extend from the ground to the tree canopies, and replacing hazardous vegetation with fire-resistive plants and irrigated landscape vegetation. Ask your local fire department for an inspection.
• Don’t forget the possibility of pests like termites or wood boring beetles (common in Marin) and fungus damage (dry rot). You should hire a licensed pest inspector every 10-15 years to inspect your home for infestation and damage. This is especially important if you live in a wooded area.
• Inspect, repair, or replace your heating and air conditioning system. If old, it may be inefficient or dangerous.
• Fix or replace a major appliance. For example, we can no longer expect a clothes washer to last 25 years. Typical useful lifetime is 10-14 years.
• Call a plumber to address leaks before they cause major damage. Examples are rotted subfloors in bathrooms and stains on a ceiling that may be due to a roof leak or defective sprinkler system.

How Much Should You Budget for Home Maintenance and Repairs?

When you first purchase a home, the inspection reports that were provided can be valuable when you are contemplating how much to put put into your budget.  Your Realtor will help you interpret the findings in these reports and gather reliable cost estimates for any major items that need repair or replacement. 

Set up a yearly maintenance and repair fund; some financial experts suggest budgeting for 1% or 2% of your home’s value, but the amount you should save depends on your home’s age, condition, and size. Remember that newly constructed homes do not remain new and also need a maintenance allocation. This 1-2% estimate may be high for Marin homes, as home prices here are high (current median price for a single-family home is $1.7-$2M). Consider also the high construction and repair costs in Marin. A new roof could cost $10,000 to $40,000.

Consult Madeline

Madeline is a long-time Marin resident and has been in the Marin real estate business for over 30 years. Contact her for trustworthy advice about how to best consider the costs associated with owning a Marin County residence.