The Other Costs Associated with Buying a Home

 

Purchasing a home can be a very exciting and stressful time. Buyers, particularly first time buyers, need to be aware that there are a host of costs associated with buying a home above and beyond than the actual purchase price. It helps to know what those costs are in advance rather than get an unexpected surprise when closing that can add to an already stressful experience.

Agent’s Commission

Your real estate agent receives a commission when you sell -- usually a percentage of the sale price -- as does the buyer’s agent. A typical total commission expense may be between 5 and 10% of the selling price, but rates are negotiable. Generally, this covers the commission for both the buyers' and sellers’ realtor, and the cost for both is paid by the seller.

Closing Costs

These costs generally refer to legal fees, property tax and utility adjustment costs.

Legal Fees

The monies used to pay your lawyer for the legal transactions associated with the purchase of your home. Such transactions include: reviewing the terms of the offer, conducting a title search on the property, preparing and signing a mortgage, registering a new title, conveyance, obtaining relevant documentation and determining appropriate adjustment costs.
There are many types of lawyers and it is prudent and in your best interest to hire a real estate lawyer or notary who specializes in home conveyance to handle your home/property purchase transaction.

Other Costs other than closing costs can include but are not limited to the following:
 
Appraisal Fees 

Often purchasers want to ensure they are paying a reasonable market price for the home they are purchasing. You may want to condition your offer subject to a satisfactory appraisal by certified appraiser.
 
Service Charges Fees and installation charges to hook up and maintain utilities such as electricity, gas, telephone and internet services (which you would also be familiar if you previously rented).

Moving Costs

Though it may sound obvious, purchasers sometimes do not consider moving expenses a cost of buying a home. Moving costs will depend and vary based on the distance of the move, the amount of furniture and goods to be transported and the time of year/month in which you are moving. Get several movers in to give you an estimate before choosing one. Friends rarely help friends move!  Also take into consideration the time and effort it takes to pack up your present home. Do you plan on hiring people to pack on your behalf? If not, you need to factor your time into the equation.

Appliances

Be careful in your deal that you check to see whether the appliances are included in the purchase agreement. If not, you will need to go out and buy them.

Landscaping, Fencing, Decks, Etc.

If purchasing a newly constructed home, keep in mind that there will likely be a need to landscape and fence the yard in the first year or two. If purchasing an older property, maintenance is something to factor into your equation.

Annual Maintenance

Homes, like other possessions, require care and maintenance to maintain their value. You need to plan for future painting, and replacement items like appliances and furnaces, depending on the age of the home you are buying.
Nothing can be more stressful than buying a home and trying to move when you are strapped for cash. Selling your home is also an expensive endeavour. You also need to take into consideration that you are also spending a good deal of your time in the process. The phrase "Time is money” certainly applies!  Remember, anything you pass off to someone else will cost you money; anything you don’t will cost you time. Speak to a RE/MAX agent to go over the entire home buying process and associated costs.