Additional Costs to Consider When Purchasing Real Estate
by Bryce Hansen
on Tuesday, March 17th, 2020 at 9:01am.
Gearing up to purchase real estate is an exciting time. You’ll spend time reviewing the active listings on Realtor.ca to establish which home features are most important to you and decide an appropriate budget that allows you to maintain your favourite hobbies and lifestyle after the big purchase. The real estate industry is always changing, as are the potential fees and rebates that you may be eligible for when purchasing a property. Though each transaction comes with its own unique circumstances, there are some common costs associated with making a real estate purchase. We’ve detailed the top 7 most common real estate costs here:
Real Estate Offer Deposit A deposit is a monetary “good faith” that is required by the buyer upon a successful (or firm) agreement of purchase and sale of a home. This deposit is decided and made clear in the signed offer to purchase document, which is presented to the seller for acceptance. This deposit forms a part of your down payment, and thus a part of the total purchase price.
Property Transfer Tax (PTT) In British Columbia properties are subject to a transfer tax of 1% on the first $200,000 plus 2% on the portion of the fair market value greater than $200,000 (up to and including $2,000,000). There are 2 common exemptions that may waive a portion or all of the property transfer tax fees; First Time Home Buyer Exemption and Newly Built Home Exemption. For a list of potential exemptions and a property transfer tax calculator, head over to the Government of BC’s informative portal
Home Inspection Fees Given that purchasing a property may be the largest financial investment you make in your lifetime, it’s recommended that you hire a professional and trusted home inspector who will assess a potential property. A home inspector will detail their property findings such as any maintenance and repair concerns in a full report to ensure you have the knowledge you need to make an educated purchase. Though a home inspector is not mandatory, foregoing an inspection may result in missed property defects and in turn financial consequences.
Property Appraisal Fees The financial institution with which you’ve applied for a mortgage may require an appraisal to establish the value of a property. The lender conducts a property appraisal to confirm the offer price is appropriate for the area and features of the home. Appraisal fees differ depending on the lender and property style, in some circumstances your lender may waive or rebate a portion or all of the fees during a promotion.
Legal Fees Whether you’re right in Courtenay, British Columbia or located in another Canadian city, you’ll need to invest in a real estate lawyer or notary to complete your real estate transaction. Your fees include the legal professional’s time to prepare all closing documents, complete a title search for deficiencies, transfer funds as well as transfer of the property title. These tasks if completed incorrectly can postpone possession dates or worse, create costly future problems.
Utility Connection Charges Here in the Comox Valley, utility companies such as natural gas, water, electricity and communications service companies may charge or hold a fee to connect or disconnect your services. To establish your unique fees, enquire with their customer service departments prior to finalizing your purchase contract.
Professional Moving Services When you’re ready to move you may choose to invest in a professional moving service to forego the heavy lifting yourself. Moving services vary in price, taking into account the weight of goods being moved, the distance to be travelled, the physical barriers a property may present, etc. Connect with a trusted local Comox Valley moving company to capture a complimentary quote.
Purchasing real estate is an exciting time, during which the Bryce Hansen Real Estate Team is here for you. Do not hesitate to reach out with questions about your unique buying experience at 250-334-9900.