Real estate lawyers don’t need to tell you about the down payments and mortgages involved in your purchase.
What they can explain is there are some costs nobody thinks about. Or maybe they just don’t know about them due to inexperience.
Be honest: Have the following six costs ever crossed your mind?
1. Hiring a Home Inspector
You might have thought that the sellers would consider your interests when trying to sell. But we all know that will never happen.
All real estate lawyers will advise people to consider the cost of a home inspection. A home review is necessary because the property you purchase might have huge structural problems.
These problems could get you into an unnecessary lawsuit later on. Why not avoid them while you still aren’t bound by the contract?
2. Hiring a Property Appraiser
Unless you have the cash, you will most likely buy a house with the help of a mortgage. What you probably didn’t know is a property appraiser needs to check the value of the home.
And it makes sense; the lender needs to see what their money goes into. But guess who will be supporting the appraiser’s fees? Hint: It won’t be the lender or the seller.
3. Hiring a Land Surveyor
Another thing you will need to pay for when purchasing a home is a land surveyor. It all comes down to what we’ve mentioned in the previous point.
Whoever is lending you the money (banks, private lenders) needs to know where your property starts and ends.
There are multiple reasons you should get a property survey. The main ones would be:
- To know whether your home has proper access points for emergency vehicles
- To know if your property shares joint custody of items such as driveways and yards with the neighbors
- To know what utility lines your property has, giving yard access to maintenance companies for regular upkeep
4. Don’t Forget to Ask Your Real Estate Lawyers about Property Insurance
Don’t think you are done with home payments after the purchase is finalized. Any real estate lawyer would do well to warn you of property insurance costs.
Fortunately, you’ll have an easier time with your insurance company after completing the tasks above. Your lawyer can negotiate a good insurance policy based on the findings of the inspector, appraiser, and surveyor.
If you’re using a mortgage to pay for your house, you will need homeowner’s insurance. On the other hand, even if you’ve finished your payments you should still consider such insurance.
5. Adjustment Costs
Let’s say you’ve sold a house to somebody. But before they purchased, you paid every utility and tax involved for the following month. Doesn’t seem fair, does it? They get a month free of taxes, courtesy of you.
That is why you should be careful to discuss these costs with your seller. Make sure you are aware of what they have and haven’t paid. You might get a call in a few weeks time asking why you haven’t paid your share of the bills.
6. Who Could Forget Taxes?
Based on how much the property costs, you will be required to pay a property (or land) transfer tax. Alberta, rural Nova Scotia, and Saskatchewan are exempt from this tax. But there is a catch.
You need to pay a land transfer registration fee and a mortgage registration fee. According to the Land Titles Office of the Alberta Government, the fees are as follows:
- For properties: $50.00 plus $1.00 for each $5,000.00 (or portion thereof) of the value of the land
- For mortgages: $50.00 plus $1.00 for each $5,000.00 of your mortgage amount (rounded up to the nearest $5,000)
As you can see, there are always hidden catches you need to be aware of in property purchase. Contact us today and our real estate lawyers will make sure you don’t forget anything important in the process.