What are the costs involved in buying a home?
When purchasing a home, typically there is a one-time cost as well as monthly expenses to consider. The down payment usually represents between 5 to 25% of the purchase price of the property and will be your largest one time expense. Besides your monthly mortgage payment, there are monthly expenses such as property taxes, utilities, insurance and maintenance.
At time of closing however, there may be some additional expenses as noted below.
DEPOSIT – Once an offer has been accepted a certified deposit cheque or bank draft representing 2.5-5% of the selling price of the home will be required by the listing company to be held in trust until the closing date.
LEGAL FEES – Legal fees vary according to every lawyer but most will charge a flat fee. It is a good idea to clarify what the fee includes ie: title search etc. and to get a few quotes from a few lawyers. In general, the fee will be from $600.00+.
LEGAL DISBURSEMENTS – Also charged by your lawyer for fees that could include: tax certificates, deed registration, title search and miscellaneous fees for postage, photocopies etc. Please clarify these amounts with your lawyer prior to closing.
SURVEY or TITLE INSURANCE – For financing purposes an up-to-date survey may be required, if not available to ensure the property does not contravene municipal zoning by-laws and regulations. Title Insurance is also available in situations regarding minor title problems. Depending on your situation, you need to know a new survey can cost from $750+ and title insurance from $300+.
HOME INSPECTION – An imperative decision when purchasing a home is have a home inspection done on the property by a qualified home inspector. A home inspection will provide buyers with peace of mind, as it will show if the home is structurally sound and in good repair. The cost of a home inspection is approximately $350.00+ depending on the size of the home, age and location. As your real estate representative, I can provide you with the names of reputable home inspection companies.
Though not an exhaustive list, these are some of the most common expenses you will incur when purchasing a home. We will discuss land transfer tax in another post. However, to learn the whole story and read all of the costs associated with buying a property feel free to download a free copy of my Buyer’s Guide and let me help you make the dream of home ownership a reality!