Buying a new home is a momentous moment for anyone, especially the first time home owners. This is perhaps also the biggest investment that one makes in his or her life, for it is not everyday that you would be buying a new residential real estate property. Buying a new home involves plenty of homework, such as exploring the best possible locality, running down the numbers time and again, holding meetings with your broker, the home owner, bank or mortgagee and also making the rounds of local municipality for the requisite documents. Finally, when everything is rounded up, it is time for you to purchase your dream home - an immaculate new residential property that you may call your own.
However, before you actually buy your new home, ensure that you take care of the hidden costs or expense usually not included in the purchase price, if there are any, involved with the transaction, because such additional expenses may even take the most veteran home buyer by surprise. Irrespective of whether these additional expenses include the obscure municipality taxes, the fees of your lawyer or unexpected utility connections, if you are not geared up to meet such hidden costs, the process of acquiring a new home may turn out to be a terrifying. Hence, it is advisable that before you make any attempt to buy a new house, familiarize yourself with the different types of hidden costs involved with a residential real estate transaction. If you don't, eventually the price of your new home may inflate several times over the sale price of the property.
Hence, below we present you with a few of the hidden costs involved with buying a new home and brief discussions on each topic that may prove to be helpful to you when you actually purchase your dream new home.
Lawyers, to be precise, real estate experts, may often prove to be one of the most annoying factors in the entire process of buying a new home. Considering the complex nature of most of the real estate transaction agreements these days, it is most likely that nearly all home buyers will require the services of a lawyer or real estate expert with a view to resolve the intricacies pertaining to their contracts. Hence, before you set out to buy a new home, make arrangements to have a sum worth $600 and $1,100 in reserve for the services of a lawyer who will ensure the buyer's considerations regarding issues, such as zoning regulations and related building purposes. There are a number of real estate agents who caution the buyer's regarding additional legal expenses pertaining to the registration of the title deed to the residential real estate. For instance, in the neighbourhood of Halifax, the legal expenses of registering the deed to the house may involve spending an additional amount to the tune of $300 to $400. Generally, the lawyers will offer you a flat rate or a price without any quantity discount. In such cases, ensure that the lawyer or real estate expert you hire provides you with a written approximation before you proceed to purchase the new home.
People who are looking to purchase newly built residential real estate property will also require additional money to equip their home with hydro meters, gas lines, electric connections and other utility services. If you are planning to buy a big home, expenses in these regard may go up and you may end up spending around $2,500. However, most people should try and limit their expenses in this regard to approximately $1,500 and prepare their estimates accordingly. Although this payment needs to be made only once, the worst part of the service is that it will not comprise any of the special and individual facilities that you may desire to have in your home - cable TV, phone or the Internet. In addition, the charges for such services that basically takes account of peripheral connections to your home will in most cases include a lot of the landscaping of your yard too, inclusive of tree planting and gardening.
Various taxes that a home buyer has to pay to finally acquire his own residential property are definitely frustrating. For instance, even the most inexperienced as well as the least organized home buyer ought to be acquainted with the spiteful Provincial Sales Tax (PST) and Goods and Services Tax (GST) they need to cough up while acquiring a new home. And if they are planning to purchase their new home before July 1 this year, the home buyers also need to pay the Harmonized Sales Tax (HST) at the time of purchasing their new residential real estate property. Whereas all these taxes may cumulatively cost may escalate to approximately more than $50,000 for each home, actually the lesser noticeable taxes are most likely to take people by surprise. In addition, the home buyers will also have to deal with the property tax that is to be paid every year as well as the devious land transfer tax - although these may appear to be insignificant, one should never be nonchalant regarding them. Akin to the property tax, the land transfer tax is likely to be different in different provinces and cities, but in a number of locations it may be charged depending on the realty or both. For instance, if you are planning to purchase a residential real estate property in Toronto, you will be charged on an advanced scale equal to two per cent of the price of your home by the Province of Ontario. Nevertheless, the authorities in Toronto would charge an additional tax besides the two per cent of the cost of your real estate property and this is certainly to create problems for owners of large residential properties. In such cases, it is essential that you find out if you are eligible for any indemnity. For example, people buying homes for the first time may avail some discount towards some of their land transfer tax penalty. Nevertheless, they need to be organized for the worst possible situation. For instance, if they pay a cumulative PST, GST and HST of around $50,000 for acquiring a home in Toronto, they may have to pay an additional $10,000 in duties only - and this does not include the sales taxes.
A prospective home buyer who has explored a model home will comprehend that appliances like the refrigerator and the washer/dryer do not come free along with a new home. However, these are just instances of two most essential appliances in every home and the fact is that a person buying a new home will need to buy a number of such appliances before he or she can move in their new home. In case, a person is buying a used home, he or she would be required to replace a number of appliances left behind by the earlier owner, as they have mostly outlived their utilities. In fact, when they move into their new residences, many home owners are stupefied over and over again when they find that the countertops of the kitchen includes simply contain two significant openings. These two big holes were actually an operational stove and a dishwasher in the model home, but they have been removed before the buyer moves in since the price of these appliances were not included in the cost of the house. What is worse is the fact that the home buyers usually leave out the cost of appliances while preparing a budget to purchase a new home. It may be mentioned here that the cost of fitting a new home with five major appliances, including refrigerator, dish washer, dryer, stove and a washer may be as high as $30,000 to $40,000! Therefore, while purchasing an old home, the buyers may negotiate the prices of the existing appliances and include their cost in the price of the home provided the appliances are in a working condition. This will definitely help to save them a substantial amount of money. However, people buying newly constructed homes ought to note that most of them are not fitted with an important appliance - the central A/C unit. Since this appliance usually does not come with a new home, availing this facility may cost the home owner an additional amount of $4,000.
When buying a new home you will find a number of real estate brokers who will suggest you against hiring the services of a third party home inspector to check out the property you desire to purchase. According to them, hiring a home inspector from outside is not needed at all. However, the fact is that if you are intending to buy an older home, it is absolutely essential for all prospective purchasers to conduct a home inspection prior to acquiring the real estate asset. In the instance of old homes, many things may not be in order or functional and these need to be checked before you buy the property. In fact, it is most important to have a home inspector check out the roof for repairing a damaged or leaking roof is not only difficult, but expensive too. Different surveyors or home inspectors will demand different charges for the job and you actually need to negotiate the rate and settle for the one that is most suitable for you. Meanwhile, it is advisable to have a reserve of anything between $300 and $600 for a complete inspection of the home that you intend to purchase.
It would be really absurd to think that people ignore the essential aspect of buying a new home, i.e. shifting to their new residence. Actually, this is one of the primary things that people have in their mind even before they buy a new home. However, their thoughts and actions are perhaps limited to physically packing up their belongings and preparing to spend their first night at their new home in a hapless condition. However, most home buyers actually ignore the expenses involved in moving to their new home while preparing the budget for purchasing a new residential property. And this attitude may actually result in a serious problem when you are paying each and everyone involved with the deal to buy the new home. While most people adopt a causal approach regarding moving home, saying "We will manage to do this with the help of a few friends', in fact, moving can really involve huge expenses running into thousands subject to the distance you are shifting. In case, you are moving within your existing locality, the movers and packers will generally charge you anything around $100 to $150 for each hour of service, but shifting to a far away location is altogether a different thing - sometimes an ordeal of sorts.
The purpose of undertaking a property survey is to ascertain the periphery as well as the dimensions of the land. Although this activity may not be of much significance for the home owners or they might not feel the necessity of undertaking a property survey, it is essential for the mortgage companies and forms a basic part of every mortgage process. In fact, you may not be able to get a loan from the mortgage companies unless you have done a property survey of your real estate and submit evidence in this regard to them. Most lenders insist on having a property survey done before they will grant you the mortgage. However, there are a few mortgage companies that do not usually insist on getting a property survey done before granting the home loan. Some mortgage companies also have the buyer undertake the property survey at their respective costs. In such cases, the home buyer may end up spending an additional amount of $300 to $500 conditional of the size of the land. The bad thing about undertaking a property survey is that nearly all mortgage companies and lenders make the home owners bear the substantial expenses involved in having a property appraisal done. In fact, a licensed surveyor may charge you anything between $500 and $600 for the job.
People intending to purchase old homes have the advantage of inspecting the property in its present condition - if the property already has a good fencing, deck and driveway or some work needs to be done on any of these features of the home. On the other hand, people planning to buy newly constructed homes usually have to depend on their imagination regarding many important aspects of the property since they may find many of these important assets of the home missing even when they are about to move into their new home. In fact, a lot of new homes are sold simply without these important features, such as fencing, decks and driveways. However, the driveway may come with the new home as a basic floor or concrete work the charges of which may be incorporated in your agreement. It may be mentioned here that since the purpose of erecting a fence is to primarily draw the limits of your land as well as distinguish it from your neighbour, the expenses toward the fencing job may also be shared with your immediate neighbours. However, it is a fact that most home owners do not include the costs of fencing while initially preparing the budget for purchasing a new home. It may be noted here that even fencing a small property may cost the home owner a substantial amount - anything up to $1,000 and if you have a larger plot, the costs will be a couple of times more.