At Mitten Real Estate Team we are pleased to bring you this week's Blog article which focuses on the typical expenses that you can expect when you are buying or selling your home. We are bringing this article in the hopes that it will be a useful resource to both our current and potential clients. The information we are providing is part of our “Buyer Assistance Program” and has been designed, after years of successfully assisting people to find and acquire the perfect property for them and to assist our clients in achieving thier real estate goals. We will also provide information on the expenses that sellers can expect which derived from our "Seller's Assistance Program", which seeks to educate sellers on all the cost of selling.
One of the things which is important to buyers is that they know what the typical expenses involved in a purchase will be. Accordingly we have put together the following outline of typical expenses which one would see in a typical purchase in the area which we service. It should be noted that each transaction is unique and may carry with it unique expenses and in order to ensure that you are fully apprised of all expense on your transaction you should work with a reputable real estate agent that you trust.
1.) Home inspection: $450.00 - $900.00
A Home inspection usually occurs after a buyer puts an accepted offer on a home, they will have the home inspected by a qualified home inspect to determine if there are any problems with the home before the buyer removes the subjects on thier offer. This is very important in protecting buyers from hidden problems with a home.
2.) Appraisal: $150.00 - $400.00
An appraisal of the homes value is often times required by a bank before they will provide financing to the buyer, some banks do provide the appraisal for free while others may require potential buyers to pay for the appraisal.
3.) Site Survey: $400.00 - $600.00
A Site Survey essentailly shows the position of the buildings on the property to ensure that any buildings are infact within the property boundaries and are not over any property lines. A Site Survey may be required as a condition of financing, alternativley title insurance can often times be obtained. In Some cases there may already be a fairly recent site surey for a home however it is not always avalible in which ase a buyer may have to pay to have one produced.
4.) Property Transfer Tax: 1% on the first $200,000 and 2% there-after.
The Property Transfer Tax is a government imposed tax which buyers must pay when they purchase real estate. There are certain exemptions that you may qualify for, so please contact us if you are thinking of buying or selling and we can disscus if you qualify for any exemptions.
5.) Legal Fees: $750.00 - $1500.00
6.) Property Tax Adjustment: Cost is dependant on the property taxes for the property.
The Property tax adjustment results from a monitary adjustment based on the amount of time the buyer and seller own the property during the purchase year.
For Example if the buyer took possesion of the property on October 31, they would have to repay the seller for the remaining two months worth of property taxes which the seller would have already paid to the municipality. Conversly. if the sale took place in march the seller would have to repay the buyer for property taxes due later in the year (that cover the whole year) that have not yet been paid by the seller.
7.) Septic Inspection: $600.00- $1,000.00
A Septic inspection is only required if the home uses a septic system to treat sewage. If the home does use a septic system it is important to have the septic system inspected by a qualified septic inspector to insure it is in good working order (a new septic system can cost in excess of $20,000 - $30,000) or if repairs are required.
8.) Water Test: $300.00 - $500.00
A Water Test is only usually required if the home is using a well. A water Test is usually taken by taking a sample of the water from a property to a lab where they determine if it meets the standards set for drinking water.
9.) Home Insurance: Cost is dependant on the replacement value of the home
10.) GST: Not usually payable on used residetial real estate
GST is payable on all real estate, EXCEPT USED RESIDENTIAL REAL ESTATE. However thier are a few exceptions to this exemption. This means that purchasers of bare land and new construction homes are usually required to pay GST while most purchasers of used residential real estate (for personal use) are not usually required to pay GST.
In Addition to thier being costs associated with buying real estate there are also cost associated with selling real estate. the following list should provide a good idea of what costs you can expect to incur when selling real estate.
1.) Real Estate Fees: Typicall 7% on first 100,000 and 2.5% there-after.
The real estate fees are split between the buyer's agent and the seller's agent. The Real Estate Fees cover the cost of determining the value of the home, Marketing and advertising, MLS fees, strata documents,advise on sale preprations, negotiations, real estate agents time, equipment and signs, etc... Real Estate fees are usually only payable if your home is suscessfully sold.
2.) Legal Fees: $500.00 - $600.00
3.) Prepayment Penalty for Mortgage: Depends on mortgage terms.
A Pre-Payment Penalty on a mortgage cost depends on the terms of the mortgage. Often times a bank may make a seller pay a penalty for paying off the mortgage early. In some case the bank may wave this penalty but in other cases they may require a seler to pay it.
4.) Property Tax Adjustment: Depends on time of prucahse and cost of property taxes
As was discussed in the buyers expenses section, this is a monitary adjustment based on the amount of time the buyer and seller own the property during the purchase year.
For Example if the buyer took possesion of the property on October 31, they would have to repay the seller for the remaining two months worth of property taxes which the seller would have already paid to the municipality. Conversly if the sale took place in march the seller would have to repay the buyer for property taxes due later in the year (that cover the whole year) that have not yet been paid by the seller.
As always if you have any questions about this article or any other real estate realted questions please feel free to contact us we would be happy to assist you we can be contacted through this website or you can call us directly at 604-882-8384.
Additionally to be sure you are fully and correctly informed of all of the cost realted to your purchase and sale and to recieve the best quality service please employ us to assist you, we would be honored to assist you with your next home purchase or sale.
Doug, Bonnie and David Mitten
(Mitten Real Estate Team)