BUYING

When you are purchasing a home there are many additional costs to be aware of on top of the purchase price.  Here is a list of the most common ONE TIME EXPENSES you will be paying for, on or before closing day of your new home purchase.  Prices are approximate and may vary depending on provider.  Please discuss with each person on your team for exact amounts.

 

Mortgage Application and Appraisal Fee:  This is paid at time of application but your mortgage broker or bank may cover these fees if you ask.  If not, you may be looking at around $300+

 

Property Inspection:  This is paid at time of inspection.  Once you have found the property you want, your REALTOR® will help you make an offer.  In that offer you will mostly have 'Subject to a home inspection'.  You, as the buyer will hire a licensed Home Inspector to go through the entire home and give you a report of the condition it is in.  This is approximately $500

 

Deposit:  You will need a deposit readily available.  This money will form part of your down payment but will typically be paid once a contract is accepted to show good faith you will be proceeding.  The amount varies and can be whatever the buyer and seller agree on.

 

CLOSING COSTS:  

Will vary depending on whether you are buying, selling, paying cash or getting a mortgage.  

Below are common expenses within the closing costs you will encounter.

 

Down Payment:  You will need a minimum of 5% down payment readily available to purchase.  This will be paid at closing with your lawyer.

 

Legal Fees:  This is paid at closing to your lawyer.  Your lawyer also takes care of all legal disbursements, mortgage interest adjustment and take over fee (if applicable), adjustments for property taxes, adjustments with strata fees and utilities, etc.  This may be approximately $1500

 

Utilities and Strata Fees:  This is paid at closing, usually added in with all the other closing costs.  These may need to be adjusted based on when you complete your purchase, so both buyer and seller pay their portion.

 

Property Taxes:  This can be paid at closing or can be added to your mortgage payments (ongoing).  Generally property taxes are paid once a year in July. If the seller has prepaid the property taxes on the home you are buying, then you will need to reimburse the seller for your portion of the taxes.  If you are buying your home before the property taxes have been paid for the year, then the seller will reimburse you for its portion of the year. 

 

Title Insurance:  This is paid at closing with your lawyer and many lawyers are simply adding it into the closing cost b/c the fee outweighs the risks.  Better to have coverage in case anything happens.  If you are getting a mortgage, your lender will likely require that you have title insurance on your property.  This is approximately $200 depending on the type of property.

 

Mortgage Default Insurance:  This can be paid as a lump sum at time of closing with your lawyer or you pay for it with every mortgage payment you make for the life of the mortgage. This applies when you have less than 20% down payment of the purchase price.  The cost of the mortgage insurance depends on the amount of your down payment and the type of mortgage you are getting.  This would be discussed with your lender when you are arranging your mortgage.

 

Property Transfer Tax (PTT):  (sometimes called PPT) is a sales tax charged by the BC Government on all transfers of Real Estate in BC.

  • First time home buyers receive a break on this tax. They pay $0 of PTT on homes with a purchase price of $475,000 or less, but they pay full PTT on homes with a purchase price above $500,000.
  • If two people buy a home together and one is eligible for the First Time Home Buyers’ Exemption and one is not, then transfer tax will be charged proportionately to their ownership shares.
  • Homeowners who claim the First Time Home Buyers’ Exemption must live in the home for at least one year after purchasing it.
  • All types of real estate pay the same PTT rate, whether the property is used, new, or vacant land.
  • The PTT rate is based on 1% of the first $200,000 of price, and 2% thereafter
    (except first time buyers purchasing below $500,000).
  • Homes are not charged PTT on the GST component of the price, for sales where GST applies.

 

Property / Fire Insurance:  This is paid when the insurance company bills you and will be an ongoing monthly payment.  Must be effective for closing day. The type of property you are buying will determine the type and amount of property insurance you will need.  Coverage options can be discussed with your insurance provider.

 

Goods and Services Tax (GST):  Generally GST is not payable on used residential property although there are always some exceptions.  GST is however, payable when you're buying a newly built home.  You may qualify for GST rebates or be able to defer paying the GST altogether.  This should be discussed with your lawyer and accountant to determine whether GST will need to be paid as part of your purchase.

 

Moving Expenses:  This is paid when moving.  Unless you want to move everything yourself, plan ahead and budget for the cost of hiring movers.  Call ahead and get a few quotes.  

If you are able to lift heavy items and move them yourself with friends and family I can supply the moving truck at no cost to you.*  Ask me for details and book as far in advance as possible to ensure you get the moving day you want.

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