If you've ever considered moving on up to a bigger, more expensive home or apartment, you’re not alone. In fact, a recent survey from the U.S. Census Bureau revealed that a sheer desire to upgrade is the number one reason (14.8%) people packed up their belongings and performed the dreaded deed in 2013.
Other reasons survey participants moved that year included: other family reason (14.8%), other housing reason (14%), to establish own household (10.4%), new job or transfer (9%), wanted cheaper housing (8.3%), or wanted to own instead of rent (5.8%). What these survey results show is that there are plenty of different reasons people move each year, many of them totally out of their control.
But, what about the reasons that are within our control – like moving simply for the sake of moving or because you “found a good deal?”
I see these kinds of moves happen all the time, and I often wonder if it truly ends up being worth it in a financial sense. Why? Because moving always seems to cost more than you think. And sometimes, the expenses you don’t anticipate can completely devour any “savings” or equity you were hoping to gain with the transaction.
10 Reasons Moving Will Cost More Than You Expect
It’s true that a house or apartment can look good on paper, but it can be difficult, if not impossible, to estimate all of the various moving expenses you’ll encounter until you’re knee-deep in boxes. Here are 10 reasons moving is always more expensive than you think it will be.
Reason #1: You might have to hire movers.
When you’re single or first married, your belongings are usually fairly easy to move. You order a few pizzas, buy a few cases of beer, and invite your family and friends over to fill their minivans, cars, or maybe a U-Haul rental with your belongings. No big deal, right?
Unfortunately, a few kids and a decade later, the same people who helped you move then won’t be quite as eager. And more importantly, you’ll have a lot more stuff! Even if you’re not a pack rat, possessions tend to accumulate over time. More members of your family generally means additional bedroom sets at the very least, plus a bigger kitchen table to sit at, more clothes and belongings to pack, and more tools and supplies.
According to the American Moving & Storage Association, the average 7,100-pound move cost $1,170 in-state and $5,630 out-of-state in 2014. That’s a lot more than the cost of pizza and beer. And as your furniture gets heavier (and you get older), you may find that a do-it-yourself move comes with more risk than the savings can justify.
Reason #2: Paying for temporary storage or lodging is a very real possibility.
When you’re moving, it’s rare that everything goes as planned. Case in point: When my sister and her husband moved a few years ago, the sale of their home went perfectly. Unfortunately, the closing on their new home - which was supposed to take place just a few hours later - was delayed, which meant that they were left with the clothes on their backs and a giant moving truck filled with their possessions for almost a week.
The extra costs from these shenanigans added up into the thousands. Not only did they end up getting a hotel room, but they had to pay to keep the moving truck for several extra days too. My sister was not happy.
Her story just goes to show that moving is almost never as neat and tidy as we hope it will be. It seems like something is always shaking up the sequence of events, whether it’s a delayed closing, some sort of paperwork bungle, or even inclement weather.
Reason #3: Buying and renting have start-up costs.
When you’re renting an apartment or home, start-up costs usually include things like a security deposit, your first and last month's rent, an application fee, and a pet deposit.
When you’re buying, meanwhile, initial costs can run up the tab even faster. Aside from your down payment, the closing costs for your new mortgage will likely be in the thousands of dollars.
Average closing costs typically range from 2% to 5% of the cost of your home, according to Zillow. These costs include everything from a fee for running your credit report to a loan origination fee, attorney’s fees, the cost of a home inspection, a title search, an appraisal fee, and a survey fee, among other charges. You may get the seller to pay for some or all of these costs, but that typically comes at the expense of a higher sales price on your new home.
There's usually no way around it: Moving to a new house or apartment will always come with a certain amount of unavoidable, upfront costs.
Reason #4: New utilities cost money to set up.
Whether you’re moving across town or across the country, you’ll probably need to set up new electric, gas, Internet, and television services. Other utilities to set up can include things like water and sewage or a new home security system. It all depends on where you're moving and what kind of utilities you require - and desire - in your new home.
A lot of factors play in to how much these new utilities will cost to set up, so you should call ahead to find out and budget accordingly. In many cases, utility deposits can run into the hundreds of dollars – of course, some utilities will waive these fees if you have excellent or decent credit.
On the flipside, you might also have to pay to terminate utilities at your current residence. Cable and satellite television companies, for example, may require you to pay to get out of your contract.
Reason #5: Your furniture and décor might look crazy.
There are dozens of reasons moving may require new furniture or décor. If you’re moving to a much bigger place, you may need more furniture in general – or just bigger furniture. Maybe you have more bedrooms to fill, a bigger spot for your dining room table, or a finished basement that's crying out for a pool table.
Or maybe your stuff just looks awful in its new home - it happens sometimes. Your country blue couch and loveseat may have looked stellar in your cozy, rural apartment, but that doesn’t mean they won’t look super weird in your new, urban loft. And if you're moving into your first "adult" residence, you might suddenly realize it's time to upgrade your bean bag and tray tables to a respectable sofa and dining room table.
Either way, new furniture and decorative items cost money. And you may not realize you need them until it’s too late.
Reason #6: Lost wages add up.
Whether you hire people to pack for your move or do it yourself, you’ll pay out the nose. Why? Because packers cost money, even if you’re hiring out the job as an add-on with your moving company. And even when you do it yourself, you’ll have lost wages to contend with, plus lost productivity.
I’ve known people who take a week off work just to pack up their home and move a few neighborhoods away. If you’re lucky, you’ll be able to use paid time off for that -- but you're still down a week's vacation. And if not, you’re on your own.
Reason #7: You’ll need to restock your pantry.
Even when you’re careful, moving can be a very wasteful endeavor. You usually wind up throwing out stuff you don’t feel like moving, as well as wasting half of the perishable goods in your refrigerator and freezer. After all, very few people have the will or means to transport boxes of frozen waffles and Hot Pockets across the state or country, right?
When you move into your new place, however, all of that stuff will need to be replaced – the spices you threw away, all of your frozen goods, and those cans of corn that never quite made it to your new kitchen. After a move, you'll want to head directly to the store and get two shopping carts; you're going to need them.
Reason #8: A new home or apartment always needs something.
Moving into a new place almost always requires a new purchase of some kind. Maybe it’s a washer and dryer because you no longer have one, a refrigerator that actually matches the existing appliances, or a new lawnmower to take care of your very first yard. Or maybe you need to replace the smelly, outdated carpet that the previous owners left behind.
Remember, there will be something you need to purchase or replace.
You can minimize these costs by buying used or shopping around for the best deal you can find, but these squirrely, unexpected expenses still tend to add up.
Reason #9: Something always breaks.
Moving your stuff in boxes and trucks isn’t without risk, and there are times when appliances, sofas, desks, and glassware don’t quite make the journey. We’ve all been there, and when you're moving on your own, there is little you can do.
If you bought movers insurance or your mover offers coverage on its own, on the other hand, you can usually file some sort of claim. According to the American Moving & Storage Association, about 80% of moves hired out to professionals go claim-free each year. Among claims filed, 99% were settled before arbitration.
That's good news, I suppose, but that doesn't mean replacing your broken items will be without any sort of cost.
Reason #10: Realtors are freaking expensive.
Let’s face it: Realtors are really expensive. I’m not saying that their services aren’t worth it, or that they can’t help you get more money for your home or a better deal on the one you're buying, but paying them a commission of 5%-7% of your home’s purchase price can certainly sting - especially if you don’t have a ton of equity already.
In my area, the average seller's cost is 6% of your home’s final selling price. So, for a $200,000 home, you should expect to pay around $12,000. For a $400,000 home, you can double that. If your home takes a while to sell, you might really get your money’s worth. Likewise, if your home sells immediately, you may spend a whole lot while getting very little in return.
Even if you avoid a real estate agent and sell your home on your own, you’ll likely have to pay to get your home listed in your local MLS, or multiple listing service, plus pay for things like title work and lawyer’s fees. Either way, all of the expenses that come with actually selling your home can add up in a big way.
Save Money by Staying Put
If you need to move for work or seriously need more space, a move is almost always justifiable. But if you're moving just for a change of scenery, it is rarely in your best interest.
Not only will you incur all of the hidden costs of moving we already talked about, but you usually have to start a brand new mortgage term as well. In some cases, that can mean spending many more years in debt than you ever planned for, or other undesirable consequences like putting off retirement or depleting your cash reserves.
If you're on the fence about moving, don't rush it. Take some time to figure out what you really want instead and determine whether your current abode could work with a few tweaks. Perhaps remodeling a few rooms, adding an addition, or reconfiguring some space could help you accomplish the same thing - but without the added costs of starting over.
And remember, buying a home is a lot like buying a new car. Once the "new car smell" and excitement wears off, the only thing left to look forward to is the payment.
Have you ever been surprised by the cost of a move? Do you think moving costs more than people realize?