You have explored the showhomes while considering the community and the lifestyle you want to live. Now you’ve decided on the right home and it’s time to buy. Buying your new home is likely the biggest purchase you will ever make. Being such a large purchase, it’s important that you’re aware of every last detail; including everything that you’re paying for when you buy your home. Of course you get a beautiful home and often, you also get the lot; but there is much more than meets the eye to purchasing a home.
There are so many small additional costs that it can be overwhelming. Here, we break them down into a few different categories to help simplify the concept and make it easier to understand. When you choose to buy a new home, the builder sometimes covers costs associated with inspections or surveys, but there are other costs that the buyer is always responsible for. To make sure you know all of the associated costs, here’s what’s included in the purchase price of a home.
Legal Fees & Disbursements
One of the most important costs associated with buying your new home is legal fees and disbursements. Real Estate lawyers serve a very important role in the process from the moment you decide its time to buy your home. Your lawyer’s role in the process is to:
Review the Agreement of Purchase and Sale
Be your advisor throughout the buying process
Register the property in your name
Verify, prepare and execute transfer documents and mortgage
Obtaining legal possession of the home on your behalf
When purchasing your new home, legal fees and disbursements in Alberta typically range from $1,000 - $1,500 on top of the list price of your home. It’s just one of many costs that buyers often don’t consider when purchasing their new home.
Like the purchase of any product, when you buy a home, it is subject to sales tax. Some builders include the sales tax in their list price, however the majority of builders do not do not. This can be a significant cost when buying a home that many buyers often forget about. Though GST can be a big financial hit when buying a new home, you may qualify for a rebate. To learn more about the new housing GST rebate, find out more from the Government of Canada website here.
The phrase “closing costs” is an overarching term used to explain the miscellaneous expenses over and above the price of the property that buyers incur while completing the purchase of their new home. Closing costs include property taxes, insurance and deposits with utility companies. Often, closing costs can amount to anywhere from 2% - 5% of the price of your home. Like sales tax, this can be quite a surprising figure if you’re unaware of it going into the purchase, so make sure you’re prepared with a few extra thousand dollars available to cover your closing costs.
Other costs to consider
Remember, when you buy your new home, not all of the costs will be written in that contract. Small costs such as moving expenses, maintenance and any shopping you may need to do to decorate and furnish your home will take a toll as well! Be sure to factor that in when you’re preparing to make your move.
Beyond all of your closing costs, it is important that you are also aware of any other costs you may incur with your new home. This includes possible Resident’s Association fees, property taxes and property insurance.
If you’re ready to make the biggest purchase of your life with a new home, remember; the list price isn’t everything you need to know. With all of the associated fees, taxes and required insurance payments, there is a lot more than meets the eye when it comes to the price of a home. Make sure that you’re an educated homebuyer by being prepared for all of the factors that are actually included in that home’s purchase price.