The Hidden Costs of Buying a Home
Buying a home is one of the most amazing accomplishments you can achieve in life. If you’re in the market for a home, it’s important to understand that the purchase price is not the only cost in the home-buying process. In this blog, we want to shed light on all the hidden costs that come along with your home purchase so that you are well-prepared and have your finances in order when the day finally comes.
Costs Before Closing Day
Home Inspection: Before you make your official offer it’s a good idea to get the property inspected in order to obtain a detailed and comprehensive report on the condition of the home. Although this is optional, the report will help you discover any defects observed, necessary repair-work, and will provide you with a list of all the existing issues that you might face with the property in the future.Appraisal Fees: Some lenders may charge you an appraisal fee to cover their cost of having a professional estimate the market value of your home.Property/Land Survey: Many lenders may require a survey of the land or property which will determine the property boundaries, structures, easements, set backs and potential encroachments of the home.Property Insurance: Your lender may arrange for you to apply for property insurance in order to protect your home against risks such as fire, weather damage, floods, and more. In this case, the insurance must be in place before your lender advances the mortgage funds.
Costs on Closing Day
Land Transfer Tax: When you a buy a house, condo or land in Quebec you are subject to land transfer tax which is charged by the government. The tax amount is based on your home’s purchase price.GST/HST/QST: Newly constructed and substantially renovated homes may be subject to GST, HST, and QST.Property Taxes, Utility Bills, Condo Fees: The seller may have already paid a certain amount of property taxes, utility bills or condo fees for the year. Once you take ownership of the property, you might be required to reimburse the seller for the portion of these costs from the closing date forward.
Costs After Closing Day
Legal Fees: Your lawyer or notary may need to manage all of the legal paperwork involved when acquiring your mortgage. Lawyer fees can be quite hefty and can also be taxed.Moving Costs: Depending on the size and amount of your belongings, your move might require you to hire a packer and mover.Furniture and Appliances: You may need to factor in the costs of purchasing new furniture if you don’t already have some from your previous home. Similarly, if your new house does not come included with certain appliances like the washer/dryer, fridge, and dishwasher, you will also have to put aside a large sum for these utilities.As you can see, purchasing a home costs way more than just the seller’s asking price. If you're considering buying a home, you need to be mindful of these various expenses when establishing your budget.