The purchase price for a home isn't the only cost you'll incur as a new homeowner. Many small expenses can add up and surprise you.
This guide will help you prepare and budget for your next purchase!
For the most part, working with a mortgage specialist won't cost you a thing. The lender typically pays the mortgage specialist for arranging the deal. However, there may be a lender or broker fee in some scenarios (i.e. construction, commercial, alternative, or private mortgages).
Confirm with your mortgage specialist if any fees will apply in your case.
Before qualifying you for a mortgage, lenders will require you to hire an authorized appraiser to determine the property's lending value. The cost of a residential appraisal can vary depending on the property type but is typically between $300-$400.
Your mortgage specialist will most likely order the appraisal and can give you an estimate.
Conducting a home inspection before going through with your purchase is imperative. You don't want to move in and discover any concerning faults in the property.
Inspection fees can be anywhere from $300-$500.
To complete the purchase, you must visit a lawyer. The lawyer will take care of adjustments and final paperwork. Legal fees vary from case to case, but you should expect to pay between $800-$1,200.
GST is charged on the sale of new homes in British Columbia. This includes newly constructed properties, such as pre-sale condos. The GST rate in BC is 5% of the purchase price.
Confirm with your realtor if the purchase price includes GST or not. If you are unsure if GST applies in your situation, you should speak to a lawyer.
Property Transfer Tax
When you purchase a property in BC, you must pay a property transfer tax unless you qualify for an exemption. Using this calculator, you can get an idea of how much property transfer tax you will owe.
Property taxes are charged annually and vary depending on the value and location of your property. These taxes can be paid as a lump sum or in installments. In cases where the seller has already paid the entire amount for the calendar year, you may have to credit them with your share of taxes for the year.
Your lawyer or notary will take care of this adjustment.
Suppose you're buying a condo, townhouse, or any property in strata. In that case, you will be charged a monthly fee to cover the costs of common area maintenance and operations (i.e. garbage removal, snow removal, landscaping, etc.).
Strata fees vary from building to building and location to location. A good way to compare strata fees between properties is to identify the cost per square foot.
Title, home/fire, and condo insurance all exist to protect you. Title insurance fees are typically included in your legal fees. You should consult an insurance professional to determine the cost of home/fire insurance and condo insurance if you are purchasing a condo.
Furniture & Appliances
The property you viewed may have been staged with furniture and appliances, but that doesn't mean it's all included in the purchase. Ask your realtor what items are included, and then budget for the rest.
This may seem a little overwhelming, but the good news is that your Real Estate Agent will be helping you every step of the way!