Some of the "Hidden Costs" of Buying A Home
As buying a home is often a once in a lifetime scenario for many of us, there may be a certain degree of uncertainty about what kind of money it entails. For first time buyers, questions about appraisal fees, transfer fees, and other similar issues are uncharted waters. Nonetheless, it is wise to understand these potential extras before you sign the offer. With the notion of such a huge investment being pressure enough, many of the extra details can seem overwhelming. Well, we're here to make things a little clearer. Relax, take a deep breath or two and hopefully the following few points on potential hidden costs will simplify matters,
- Besides the basic purchase price, look to pay legal fees and disbursement fees, which are the lawyer's, spending expenses.
- A home inspection is well worth the expense - budget for it.
- If you are considering a rural property, you may wish to seriously consider hiring professionals to complete a full assessment of the septic system and you will definitely want to have the well water checked for potability (water quality) by having a fecal, chemical and coliform analysis. If your rural property is in an area of neighbouring farmland, we strongly recommend a chemical analysis of the water as well to ensure that sprays and chemicals that farmers may be using on their crops, have not seeped into the water table for the area and infected your well.
- We strongly recommend that all wood burning fireplaces be inspected by a WETT certified inspector (Wood Energy technical transfer) prior to their usage for your own safety. Fireplaces are a "specialty item" and have their own area of certification. Your insurance company may provide you with a discount for obtaining a WETT certificate for your fireplace - ask them.
- Keep an eye on the closing adjustments with the seller - taxes paid in advance, rental income, condominium maintenance, and some utility charges such as for oil left in oil tanks.
- Cost of arranging a new mortgage including application and appraisal fees, high ratio insurance premiums if you have less than 25% as a down payment.
- Some provinces may want to involve you in warranty program for newly constructed homes - Ontario New Home Warranty Program.
- Some provinces also charge a transfer fee or Welcome Tax.
- These hidden costs add about 2% on resale homes and 3% on new homes in addition to the basic purchase price.
Once you're in your new home there may be other immediate costs;
- New appliances
- Furnishings
- Lawn & Garden Items – lawnmower, rakes, hoses, shovels and snow blower
- Homeowners insurance
- Could your move increase the demand for another vehicle? Is there public transit readily available? If you need a new car, don't forget to include its cost in your monthly expense budget
- Were there any immediate renovations or updates that your home inspection revealed that need to be addressed?
- Health and safety concerns – Carbon monoxide and smoke detectors? Does your new house have any?
Remember, you don't have to redecorate immediately - if you do get the bug, wait a few months to see if you enjoy the current layout or whether you want to rearrange furnishings and decor. It takes a while to get to know (and appreciate) your surroundings.
Purchasing it - made it your house,
the little things you do over time ... will make it your home!
This information is provided as a service to our web site visitors. While we attempt to ensure that all information is accurate and a fair depiction of real circumstances, it is to be used solely for information purposes. Home Inspectors® may not be held responsible for the accuracy of any of the above information. Re- production of any of this information is strictly prohibited without written permission of Home Inspectors®.
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