Whether you are purchasing your first home or your tenth, the home buying process is always an exciting time! However, with so many expenses being acquired it is important to be fully aware of what to expect and budget accordingly. Surprises are fun when they are in the form of a party, but when it comes to surprise costs in real estate .... well, not so much!
When you get an offer accepted on a home, you will be required to make a deposit to secure the property that you are purchasing. The deposit amount will be included in your written offer for purchase. The deposit is then applied against the purchase price of the property when the sale closes, as a part of the down payment. If you do not close on the sale, you can lose your deposit.
When buying a home, we recommend the contract is subject to a home inspection. This is at your cost; however, it's a very important step that is not to be missed. After all, home inspectors are taught to assess a home for current or potential issues. They know how to look beyond what a typical home owner or home buyer can see. From the plumbing to the foundation, electrical to ceilings and everything in between, they will report on items of the home that might need repair.
Home Inspection fees are dependent on a variety of factors including the size of the home. You can expect to pay between $500-$800.
In order to get an accurate amount of money from a lender, the home will need to be appraised to determine the market value of the property and home. The cost of the appraisal itself will determine the location of the home, size of the property and type of home. It is important to note that some lenders may waive this fee, but could still charge you a financing fee.
A down payment is an upfront sum of money paid when purchasing a home. This payment is deducted from the price of the home, and the remaining is covered through a mortgage loan. The minimum down payment required is calculated from a percentage of the cost of a home being purchased and therefore varies from home to home.
You will need to arrange home insurance. This can either be broken into monthly or quarterly payments, or paid yearly in advance.
Property Transfer Tax
In BC, Property Transfer Tax is paid by the buyer when purchasing a home. BC’s PTT rate is 1% on the 1st $200,000 and 2% of the balance of the purchase price of any property sold in BC. In some cases, you may be exempt from PTT.
Real Estate Legal Fees
In order to ensure you thoroughly understand the process of purchasing a home and that your legal interests are protected, it is important you have good legal representation. Legal fees are paid on the closing day of the sale. Real Estate lawyers or notaries look over all legal documents before they are signed, handle all of the paperwork, ensure that there are no previous claims on the land and review your offer and agreement to purchase the property.
Legal fees vary depending on the situation, but the average range to anticipate is $800-$1,500. Sometimes, this can be included in your mortgage
Moving incurs a cost that can end up creeping up and surprising some home buyers. Whether you are hiring a moving company to do the work, recruiting your family to help or renting a truck to do it yourself, moving comes at a cost. When budgeting for moving expenses some aspects to take into consideration are how heavy your items are, how far you are moving and the time of year. This will give you a clear indicator on whether or not hiring a moving company is necessary. Once a decision on using a moving company or not is made it is then important to consider the costs that go into each option. The cost of using a moving company varies depending on whether you are looking for a full-service mover, the distance of the move and the time needed. The cost of moving on your own will also vary; it really depends on what works best for you!
Before you buy a home it is important you are prepared for all costs you might incur, over and above the purchase price!
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