Buying or selling a home is a big decision and a major financial undertaking. In addition to the purchase price, home buyers and sellers must also consider potential hidden fees. These fees can add up quickly and significantly increase a property's cost. That said, knowing what these fees are and how to avoid them can help buyers and sellers budget accordingly and ensure a successful transaction.
Buyers' Costs and Fees
Legal Fees and Disbursements
A lawyer or notary will charge you these fees, and they can even reach more than a thousand if the sale is particularly complicated. Your attorney or notary will handle all monetary aspects of the real estate sale.
Taxes on the Sale of Real Estate
All home purchases are subject to this. Province and locality affect the rate used to determine these fees, which might vary widely. To give just one example, in Ontario, land transfer taxes are as follows: 0.5 percent on the first $55,000, 1 percent on the next $55,000 to $250,000, 1.5 percent on the next $250,000 to $400,000, and 2 percent on the remainder. The land transfer tax might not apply to first-time buyers, or they might just have to pay a reduced amount. Learn about the first-time buyer assistance programs in your state.
Taxes on Owned Property
Your notary will deduct this from the amount you have set aside for legal representation. There will be a prorated amount of property tax due to you or refunded to you for the balance of the year.
It's possible that your lender will want to see a recent survey of the property. It will cost you at least $800 if the seller doesn't provide one.
House Inspection Expenses
Having a professional inspector look at your new property before you start removing people is a smart choice. It's a great strategy to protect your investment's security and stability.
Cost of Appraisal
An appraisal may be necessary for your lender to give their final approval on your mortgage. The range for this is $250–$500.
Mortgage Loan Insurance Premium
For mortgages with down payments below 20%, mortgage loan insurance is typically required. The premiums for this insurance, which will be included in your monthly mortgage payments, can run anywhere from 1.75 percent to 3.25 percent. This insurance comes with a mortgage loan insurance application charge. There is a possibility that you could get a better interest rate on an insured mortgage.
Money Spent on Relocation
Costs will differ depending on whether you employ movers or rely on friends and relatives. The cost of moving might range from $200 up to $2,000.
Property insurance premiums can be paid monthly or yearly. The cost of your homeowner's insurance depends on factors such as where you live, the value of your home, the size of your lot, and so on. Prices can vary widely, but you should budget at least $1,000 annually.
These costs are the seller's responsibility, albeit they will be deducted from the final sale price rather than coming directly out of the seller's pocket. You can get the agreement done by negotiating different terms.
It is your responsibility to make sure there is no hidden oil tank on the property if you are buying in a historic district. In that case, it is your responsibility to get rid of it. This can easily exceed $2,000 in price.
Sellers' Costs and Fees
Lawyer and notary fees for finalizing the sale might be anywhere from $500 to $7,000, depending on the complexity of the deal. Again, your attorney or notary will handle the transfer of these funds.
As was previously said, these figures can change depending on whether you use a professional moving company or rely on friends and family. The price tag for this might range from $200 to $2,000.
Indeed, it is important to be aware of the most common hidden fees for home buyers and sellers. These fees can add up quickly and can put a strain on your budget. By being informed and knowing what to look for, you can either prepare or (if possible) avoid some of these fees and save yourself money in the long run.
If you are looking for the top real estate agents in Vaughan, trust only the team at Sold With Presta. We specialize in both residential and commercial real estate, and we offer a wide range of properties in the Greater Toronto Area for you to choose from. Contact us today for more of our listing alerts and homes for sale