How to Navigate St. Louis’s Hidden Home Buying Costs — Beyond the List Price

Everyone knows that buying a house is expensive, but few buyers are well-aquainted with the laundry list of expenses involved. Even if you’ve saved up for a nice down payment on your home, you’ll still have to consider all of the hidden costs to budget in before going through with the purchase.

Here’s a look at some of the costs buyers encounter when buying a house, and some tips for staying within budget.

1. Bidding Higher Than Asking Price

According to a 2023 survey from the National Association of Realtors, 25% of home buyers paid more than the asking price. If you’re looking in a popular neighborhood, with lots of potential buyers, and the homes you choose are in good condition and haven’t been on the market long, expect to pay a little more than the asking price. 

Home inspections are not regulated by the states of Missouri or Illinois, but some lenders will require an inspection to ensure the house does not have serious damage before they lend you the money to pay for it. These cover crucial areas of the home that may need to be repaired, like the roof, electrical systems, plumbing, and HVAC. Home inspections in St. Louis cost an average of $300-$500, but can cost more if other optional inspections, like for radon or mold, are included.

While inspections might seem unnecessary in nicer, newer houses, they can reveal hidden problems that might be fixed by the seller if discovered before closing. Typically, fixing major issues can be negotiated between the real estate agents and buyers agent, and result in a price reduction or repair by the seller.

In addition, the city of St. Louis requires a Housing Conservation Inspection for an occupancy permit. These currently cost $120 and consist of a basic code inspection, checking for any interior building code violations, and that the building meets minimum exterior standards under the International Property Maintenance Code.

Home appraisals are required by lenders so they can ensure the house is worth the loan amount. These can cost anywhere from $250-$500 in the St. Louis area. 

If the appraisal ends up being lower than the sale amount, another unexpected cost can occur. Unless the seller refuses to lower the price to the appraisal amount, the buyer must increase their down payment amount to continue. If this isn’t an option, the buyer can back out.

If you’re switching from renting to owning a home, expect to start paying for homeowners insurance. This is usually a monthly cost incorporated into your mortgage payment. 

According to Nerdwallet analysis, the average home insurance costs in Missouri are $3290 per year or $276 per month. In Illinois, the yearly average is $2420 or $202 per month. Cost depends on a number of factors, like the age of the house, the location, and features of the house.

Earnest money is a deposit on the home purchase. Usually, this is around 1-2% of the price of the house and lets the seller know you’re serious about the purchase. A realtor will include this in the initial offer. 

Technically, earnest money will go toward the closing costs or down payment once the buying process is over, so it’s not really an extra expense, but it must be paid at the beginning of the process.

Property taxes are a big expense, although they typically are incorporated into the mortgage payment, like insurance. Tax rates vary a lot throughout the area, but the median effective tax rate in St. Louis is 1.34% of a home’s value. These tend to be higher on the Illinois side, although houses also tend to be less expensive.

If the down payment is less than 20% of the purchase price, this is usually required. Private mortgage insurance protects the lender if a buyer defaults on the loan. The cost is around 0.5-1.5% of the loan and is typically included in the monthly mortgage payment. The good news is that you can stop paying for mortgage insurance once you have paid off that 20% of the purchase price.

Home warranties are optional warranties that provide discounted repair and/or replacement services for large household appliances such as refrigerators and washing machines, as well as repairs to the plumbing system, electrical system, and HVAC system. 

These are generally a good idea when the systems and appliances are older to avoid spending a lot on repairing or replacing them later. In some cases, the buyer may offer to pay for a year of a home warranty as an incentive.

Before moving into a new home, you’ll have to transfer the utilities like water, gas, and electricity, into your name. These can vary, but can be between $20 and a few hundred, depending on your location and whether the company charges a deposit (usually for those with lower credit).

At closing, the property title and keys for the new home are transferred to the buyer. Unfortunately, there are a lot of fees that come along with this. The total cost of closing in Missouri is on the lower end, usually around 0.6% of the purchase price, while Illinois has an average closing cost of around 1.3%, according to Lodestars’s 2025 Purchase Mortgage Closing Cost Data Report (where closing costs are defined as the average fees, recordation charges, and transfer taxes required). 

Often, many of the above costs are considered part of the closing costs, but additional fees for a buyer include:

• Loan origination fee 
• Title fees 
• Credit check
• Underwriting fee
• Application fee
• Missouri does not have a transfer tax, but Illinois does. Sometimes this is paid by the seller, but it is sometimes paid by the buyer.

It’s always best to budget in a few other expenses that aren’t directly related to the home purchase. Be prepared to pay for things like:

• Moving truck rental or movers
• Small changes like paint, doorknobs, lightbulbs, or carpet cleaning.
• Window coverings–not all homes come with blinds or curtains.
• Cleaning supplies
• If you’re coming from a yardless home or apartment, be prepared to buy some lawncare items, like a lawnmow and clippers.

There are several ways to buy smarter and stay within your budget. Here are some tips for lowering overall costs:

• Do your research. Most homeowners have a list of “must-haves” when home buying, and careful consideration of all factors involved can lead you to your dream home without breaking the bank. Find out which neighborhoods have what you need, but are still cheaper than other areas. 

• Look for houses that have been on the market longer. You may be able to bid lower than the asking price if a buyer knows they aren’t going to get what they listed the home for. Of course, you’ll want to make sure nothing is seriously wrong with the home. 

• Shop around. Get multiple quotes for things like homeowners insurance or mortgage rates to find the lowest rates.

• Consider a  fixer-upper. As long as the house doesn’t have any major structural problems, you can save money and create a more personalized dream home if you’re handy and have a lot of free time.

• Get a good real estate agent. Buying (and selling) a house is complicated, and your best bet is to have an expert to help you understand all the nuances of the buying process. Many costs are actually negotiable with the seller, and a good real estate agent knows when to push for more and when it will be pointless. Real estate agents can help you determine the difference between a great deal and a money pit early on in the process, ultimately, saving you a lot of time and money.

When you’re ready to take the plunge to start looking for a new home, talking to a real estate agent is the best starting point. At Berkshire Hathaway Home Services, we know what the buying journey is like and how to make it as smooth as possible. Find a BHHS office today and contact us to get started.