Hidden Costs Home Buyers in Philadelphia Should Know About

August 6, 2025

CATEGORIES: Buying a Home, Home Buyer Guide

TAGS: closing costs, home inspections, appraisals, property taxes, 10-year tax abatement, home repairs

Don’t Let These Expenses Catch You Off Guard: Buying a home in Philadelphia is an exciting milestone—but before you pop the champagne, it’s important to know that the listing price is just the beginning.

From closing costs to surprise repairs, there are several hidden costs that can sneak up on homebuyers, especially first-timers. Here’s a breakdown of what to expect so you can budget wisely and avoid unpleasant surprises during the buying process.

Closing Costs

2-5% of the purchase price

While sellers often cover a portion of these costs in competitive markets, buyers should still plan to pay anywhere from $6,000 to $15,000+, depending on the price of the home. These costs typically include:

Title insurance
Transfer taxes (Philly’s is notably high at 4%)
Loan origination fees
Escrow fees
Attorney fees (if applicable)

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Budget 2–5% of the purchase price for closing costs—and always ask if the seller is open to covering a portion.

Home Inspections and Appraisals

Before you close on a property, you’ll want to conduct:

A home inspection (typically $400–$700) to uncover issues like structural damage, roof problems, or outdated electrical systems.
A pest inspection or sewer line scope, especially in older homes.
A home appraisal (required by lenders, usually $400–$600) to confirm the home’s value.

While these aren’t massive line items, they’re essential—and skipping them can cost you much more down the road.

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Don’t skip inspections—they cost a few hundred now but could save you thousands later.

Property Taxes

Philadelphia’s property tax rate is relatively modest compared to some other cities (currently 1.3998%), but the actual amount can vary significantly depending on the assessed value and neighborhood. For example, homes in Rittenhouse or Society Hill often carry much higher tax bills than those in up-and-coming areas like Brewerytown or East Kensington.

Don’t forget to check for any abatements—some properties qualify for the 10-year tax abatement, which can save you thousands annually.

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Check the property’s assessed value and see if it qualifies for a 10-year tax abatement.

Immediate Repairs and Renovations

Even if your dream home passes inspection, many buyers face unexpected expenses after moving in. These might include:

Replacing outdated appliances
Painting or refinishing floors
Upgrading HVAC systems
Roof or window repairs

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Set aside 1–2% of the home’s price for surprise fixes within the first year.

Utilities and Monthly Costs

If you’re moving from a rental or smaller home, be prepared for higher:

Heating and cooling bills
Water and sewer fees
Trash and recycling charges
Homeowners association (HOA) fees (if applicable)

In older rowhomes or large single-family houses, utilities can add up quickly—so make sure to factor them into your monthly budget.

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Ask the seller for past utility bills to estimate your future monthly expenses.

Final Thought: Knowledge Is Buying Power

The Philadelphia housing market offers incredible diversity—from historic homes in Society Hill to new builds in Fishtown—but every purchase comes with more than meets the eye. Being aware of these hidden costs will help you plan ahead, make informed decisions, and avoid unnecessary stress during one of life’s biggest investments.