Inspections push up home buyers' nickel-and-dime costs

This summer's news about radon was old news to people in some states, especially if they were buying homes. In New Jersey, for example, home buyers already have to pay an additional $100 to have their houses inspected for radon, the colorless, odorless gas that officials say contains harmful levels of radiation. That little expense is just one of several new costs home buyers have to pay nowadays. A few years ago, it was enough to save for the down payment, closing costs, a standard overall inspection, and moving. Today, of course, with ``starter'' homes running $100,000 or more in some parts of the country, saving for the down payment is itself often a daunting challenge.

Now, there are several new pre-purchase expenses for inspections, taxes, and other things. Although each of them is fairly small, they can add up to an additional $1,000 to $2,000 that has to be squirreled away in order to buy a home.

Like the New Jersey radon inspection, the existence and size of most of these ``nickel-and-dime'' expenses depend on the state you live in, though most states have some of them.

Take transfer taxes, for example. ``This is one of the newest and biggest expenses,'' says Liz Johnson, spokeswoman for the National Association of Realtors. Some states refer to it as a ``stamp tax,'' but the purpose is the same: to raise some extra revenue, ostensibly for projects related to housing, like sidewalks, sewers, and roads. About 40 states have a tax like this, Ms. Johnson says, and 18 give local cities and towns the authority to impose a transfer tax of their own. The average tax is $672 a transaction and going up, she says.

``Taxes in drag'' such as this, says Larry Hoytt, president of Hoytt Inspection Services in Novato, Calif., have become particularly attractive, following passage of referendums to cut property taxes, like Proposition 13 in his state or Proposition 2 in Massachusetts.

Massachusetts is the home of another new expense for home buyers, at least those with children under six years old. It's the only state, in fact, to require buyers with small children to have the homes tested for the presence of lead paint.

This test can cost about $150 for a typical single-family house, says James Walsh, president of American Environmental Associates in Quincy, Mass. If lead paint is present, it could cost from $500 to $2,500 a room to remove it, Mr. Walsh says. This could also affect sellers, he adds, since a buyer who has to spend several thousand dollars to de-lead a house may want to negotiate a lower price.

Although Massachusetts is the only state with this requirement, several others are considering it, Walsh added.

Radon is a concern mainly in the Eastern and Midwestern parts of the United States, but other regions have their own characteristics that require special - sometimes costly - tests and inspections.

In California, for example, there are many more swimming pools per capita than, say, in Minnesota. Thus, a separate pool inspection is usually called for, and costs another $75 to $150, Mr. Hoytt says.

Several states also require a special inspection for termites and other insects. There's another $75 to $200.

If the house is on or near a hill, you might consider a soil test to see how likely the earth is to move out from under you. That runs from $200 to $300, Hoytt figures. Of course, the person who does the soil sample may say - partly to protect himself from a liability lawsuit - that a more sophisticated core sample be taken. This one, which involves drilling a shaft into the ground and taking out and testing a long section, can cost $1,000 to $2,000, he says.

Most inspectors, he says, do check the roof's condition, but if you want it checked extra carefully, you can spend another $75 to $150 for a separate inspection.

The fee for the basic home inspection can vary from $150 to $350, depending on the size of the house, what part of the country it's in, and the completeness of the report.

All in all, Hoytt believes, the average home buyer spends from $750 to $1,000 on various inspections, more if several are required by the state.

That may not seem like much, but when other ``hidden'' items like transfer taxes are added in, it calls for more careful financial planning and saving. It also calls for checking with local officials to see what additional costs there may be, to avoid surprises at the closing.

``You assume you're buying a house for $100,000,'' Hoytt says, ``and the closing statement shows up and you say, `Where did all these extra costs come from?'''