The Buying Series Part 9 – Costs beyond the sale price

There are some costs you can predict when you buy a home, and some you can’t. Costs vary depending on your lifestyle and any surprises within the property you buy.

Here are some common costs to plan for when buying a home:

  • Canada Mortgage and Housing Corporation advises planning to pay 1.5-4% of the purchase price in closing costs, which typically include legal fees, title transfer, mortgage disbursements, repayment of prepaid taxes, plus any other items requested by the seller.
  • A condo document review can cost between $500-$1,000.
  • A home inspection typically costs up to $1,000 (more for larger properties or acreages)
  • If you’re buying an acreage, there may be septic and well testing.
  • Your moving costs will vary based on how far you’re going, whether you’re packing yourself, and how you’re getting between properties. Renting a truck, packing it yourself, and moving locally can be done for a couple of hundred dollars. Hiring help or moving beyond city limits will quickly push your moving costs beyond $1,000.
  • You may want to change the locks for added security and get additional keys cut for family members.
  • If you’re a first-time homebuyer, you’ll be getting home insurance, and—if your down payment is less than 20%—mortgage insurance for the first time.
  • New homeowners need to budget for property taxes.
  • Calculate condo fees in your monthly budget.
  • Your utility bill may be significantly higher, particularly if you’re moving from an apartment or condo into a single-family dwelling.
  • Additional professional cleaning inside and out. The courteous thing to do is for sellers to leave the property clean and in fair condition, but this isn’t always the reality.
  • Painting part or all of the interior or exterior, on your own or professionally.
  • Your new home might have ugly blinds. Prepare to replace or provide window coverings, fixtures, or other items you may not have noticed previously but now want to change. Your furnishing costs will vary depending on your taste and what you already have.
  • Your current furniture may not fit the space, and you may need to replace items or add more if you’ve moved to a bigger home. Factor in the cost of delivery of new furniture, too.
  • New homes, especially, may need landscaping. Some people don’t realize their new building doesn’t even have a lawn. This cost also varies widely, so get an estimate; you could spend $200 or $2,000 on a single tree.

Typically, you don’t directly pay commission when you’re the buyer. Your agent is most often paid out of the proceeds of the sale. Not all buyers know this. We’ve been asked, after spending a day showing homes to buyers, what they owe and when they have to pay. We take that as a huge compliment. It means we’ve done a great job. That’s what every buyer should feel like after a day spent with a real estate agent. In most circumstances, though, no money changes hands until the sale is complete.

With that said, if the seller is not offering a commission, or the commission agreed to on our buyer representation agreement, then it’s a conversation we will have on that property. We can try to negotiate it into the selling price or there may be a fee at the end—but that’s very rare, and we will let you know if/when that might ever come up.

We don’t want to scare you with this list of costs! They won’t all apply, and you have likely prepared for most of them, but we just don’t want you to be caught off guard.