8 Overlooked Costs When Buying a Home
Top 8 Overlooked Costs When Buying a Home
You’ve been pre-approved for a mortgage, you have your down payment and your offer has been accepted. All set, right? Wrong. There are a lot of costs that are associated with buying a home that people tend to overlook. Make sure you take these into account when you start working with your Realtor to buy your home.
1. Legal fees and expenses
Your lawyer has some work to do once you’ve put in the offer to purchase a home. They have to do a title search, register a new title, get documents to figure out adjustment costs and even deal with some of your mortgage paperwork. Budget at least $1,500.00 for this expense, though depending on the area you live in and the paperwork on the house, it could be more.
2. Home inspection
Ask your Realtor for a referral to a good home inspector. There are a lot of them out there, but like every industry, there are some great ones and some not so great. Your home inspector will look at things like the condition of the foundation, the heating/cooling systems, the roof, the plumbing and other structural factors. Having an inspector come in doesn’t guarantee that you’ll catch everything that might be wrong with the house, but it’s the most prudent thing you can do. Depending on the size of the house, the inspector will cost you anywhere from $300-$500. Then, based on their evaluation, there may be repairs to do before moving in. If it’s a big repair, talk to your Realtor about adjusting your offer price accordingly.
3. Adjustment costs
The current owners of the home may have already pre-paid for home costs like property taxes and utilities. You will have to reimburse the vendor for anything pre-paid.
4. Appraisal fee
Your lender wants to know that you’re not overpaying for your home or trying to borrow more than you need. They will make you pay anywhere from $150-$250 to have the numbers checked.
5. Property survey
Sometimes you get lucky and the seller already has this done, but if you’re lender requests one and it is not available, this can cost between $1,000 and $2,000.
6. Land Transfer Tax
If you live anywhere but Alberta, Saskatchewan or rural Nova Scotia, you’ll have to pay this tax. (Also known as ‘property purchase tax’) These are complicated to explain, you’ll want to talk to your Realtor about this one. It will depend on the value of the house you buy. The Ottawa Real Estate Board has a calculator on their site.
7. Home insurance
The lender you work with will insist that you have this and your lawyer will need confirmation that you have this arranged. The lender wants to make sure that if something happens to your house they will be paid out by the insurance company.
8. Moving, repair and decoration costs
Surprisingly, people tend to forget about this last one. When you move into your home, there are a lot of expenses associated with the move. On top of that, homes are rarely ‘turn-key’ meaning you will have some decorating expenses. Also, make sure to check what appliances are included in your offer.
There are more costs associated with buying a home or condo, talk to your Realtor for a more complete list.