Hidden costs to consider when buying a house
So you’re ready to buy a house! Hoorayyyyy!!!! You’ve saved your downpayment and you're approved for a mortgage covering the rest. Good to go, right? Think again! There are some extra costs involved with buying a home. If you're new to navigating the home ownership zone, don't you worry. Today's blog is for you.
Lawyer/Notary: You’re going to need these guys no matter what. Notaries tend to be a little less expensive. But if you run into any legal issues with your sale, they can’t help you and you’d need to get a lawyer anyhow. Lawyers/Notaries deal with all the important bits before the completion of your sale. This includes:
Dealing with your mortgage and paying out the seller.
Getting all the legal documents in order and ready for your signatures.
Sending documents to the land title office for transfer into your name.
Collecting your deposit.
Compiling your statement of adjustments (a big old list of everything you owe or will be credited)
2. Property Transfer Tax: Unless you’re a first time buyer (those guys are exempt!!) you will have to pay property transfer tax. This equals 1% of the first $200,000 and 2% on the rest up to two million. This gets worked out by your lawyer/notary.
3. Your Share of the Bills: Your lawyer/notary will also work out what portion of the yearly taxes, water bills, pad rent, etc you pay. They then add the amount to your statement of adjustments.
4. Deposit: A deposit is “good faith" money put down for the sale of the house. It shows you’re serious and gives the sellers some insurance in case you decide to pull out of the deal down the road. It's usually paid after all the conditions of your contract are met and things get official. It goes towards your downpayment, so there’s not actually any extra money coming out of your pocket. There’s no set amount that you need to put down, but 5% of the sale price is a good guide.
5. Inspections: We always recommend a home inspection. You don’t want any nasty surprises when you move in. These can run at about $500 plus tax around here. Almost every property outside of town limits here has a septic system. Get it inspected!! Is there a well on the property? Water quality and quantity tests are a good idea. Also, is there a fireplace or a wood stove? To get insurance this will need to be WETT inspected, which is an extra cost if it’s not already done.
6. Lastly, find out if the property is GST applicable : That’s an extra 5% on the sale price if it is. Usually this applies to newly-subdivided bare land or brand new homes.
BONUS: Did you know that buyers don’t pay for my services as a Realtor? What’s not to love! That’s a good saving in my books.
But above all, chat to your realtor, and if you don’t have one, chat to me! I’ll fill you in on all this personally or answer any questions you have. I’m here to help!
Let’s buy a house!!!
About Sallee
I was born in the Yukon, brought up in BC and Alberta and lived in Australia, New Zealand and England. Even though the places and scenery have changed over the years, one thing has always stayed the same. Home is where your heart is. Putting a price tag on something as personal as a home can feel overwhelming. That's why for me as a REALTOR®, selling houses is much more than numbers. It's about people. Wherever you are in the world, in life or on your journey with real estate, these relationships matter.