The purchase of your first Edmonton home is an exhilarating and monumental event. However, many homebuyers are unaware of the “hidden”, one-time expenses that come with buying a home. When you budget for a real estate purchase, you should have a good understanding of what investments will have to be made alongside your down payment. Doing so will allow you to prepare properly, save accordingly, and make the acquisition of your new Edmonton home much less stressful.
Edmonton Home Inspection
While not mandatory, it is often recommended to have a home inspection done prior to closing the deal on your new home. An Edmonton home inspection allows the buyer to better understand the condition of the house, including its structural integrity and mechanics. Doing an inspection before closing a sale means that potential issues can be brought to the seller’s attention before it becomes the buyer’s responsibility. Additionally, knowing that there are no major defects to surprise you in the future may provide more security for your lender.
Legal Representation
You will require legal assistance to facilitate the transaction between yourself, the bank, and the seller. Only a portion of this cost will pay the lawyer’s fee, while the remainder will be used to execute the title transfer and all other details regarding the purchase (disbursements). Legal feels will vary depending on the complexity of the transaction.
Adjustment Costs
Adjustment costs refer to the costs that the previous owner prepaid (property taxes, utility bills, maintenance services, etc.). You as the buyer may be required to reimburse the seller for expenses they may have already been paid in a prorated fashion. This cost is dependent upon the possession date.
Property Appraisal Fee
In order to determine the value of the property you’re purchasing, and whether or not it meets its lending criteria, your bank may hire an independent appraiser to assess the property. This, of course, depends on the type of property being purchased.
Estoppel Certificate Fee
If the property you’re purchasing is a condominium or strata unit, an estoppel certificate allows you as the buyer to know if the previous owner has any unpaid condominium contributions. Outstanding payments and associated interest owing on unpaid condominium fees are carried with the unity and not the owner.
Land Registration
Before the sale closes, you have to register the property’s title under your name. This is also referred to as a land transfer tax, deed registration fee, or property transfer tax.
If You’re Buying a Brand-New Home
Often only associated with the purchase of a brand-new home (not just new to you), you will likely have to pay goods and services tax (GST) on your home purchase.
Home Insurance
As a condition of getting a mortgage, oftentimes the lender will require proof of home insurance before approving a loan. The cost of your home insurance policy will vary depending on your personal assets, the features of your new home, and the type of policy chosen.
A general guide is to have an additional 3%-4% of the purchase price as cash-on-hand. Keep in mind, the estimates of these costs will differ based on the type of property you are buying and what kind of services are available to support your purchase. If you’re unsure of what fees will be associated with your first home purchase, consult your real estate agent. They are on your side and are eager to ensure you are making a quality investment.
Our TruHome real estate agents take great pride in facilitating your purchase by making sure you’re well-informed before any documents are signed. We are always happy to aide our clients – especially if you’ve chosen us to help you find your first TruHome!
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