The Hidden Costs of Buying a Property
Posted by Garman Group on
It's time to buy your first home, of course, you're excited! Getting approved for a mortgage and figuring out a payment schedule can be a difficult thing to understand. Hopefully, your REALTOR® and bank advisor have explained as much as they can to help you. And of course, you need that down payment. So now you’ve figured out all the finances, right? Oh, so wrong!
At the Garman Group, we're happy to be able to help you find your first home but we also want to make sure you're ready for the other financial aspects buying a home includes.
Unless you're buying a brand new, warrantied home (even then, there are exceptions your MLS REALTOR® will let you know about), a home inspection is NOT something you want to skip.
Hire a professional inspector who knows what to look for and who will give you a fair and honest evaluation. Inspections can cost a few hundred dollars, depending on the size of the home, but can save you a LOT of future trouble if a problem is found.
Hiring a lawyer is standard practice for most home buyers to help them work through the (many) contracts there are to sign. Lawyers will also check to ensure there are no liens on the home, and that the home transfer and all property forms are transferred to you.
Some lawyers specialize in real estate and these are the ones you want to look for. They often charge a flat fee for a basic homebuyer arrangement but you can get an estimate for the legal costs you'll incur for buying a home in your area.
Mortgage insurance premiums will vary depending on your lender and how much your mortgage is. Typically, if your down payment is less than 20% of the purchase price, you'll be required to get insurance on your mortgage loan.
Home insurance is a whole different ballpark. This is a yearly or monthly fee to insure your home and contents. Rates vary significantly depending on the insurer, area you reside in, and what is being covered. Be sure to get a few estimates and read the fine print to make sure all your valuables are covered. If you're buying real estate in Victoria or any area susceptible to earthquakes or other disasters, ask about coverage for that.
Monthly maintenance fees could occur if you live in any sort of condo, townhouse, or other housing community. These fees vary depending on the age of the building, the size of the development, and any added amenities that need to be taken care of such as pools, tennis courts, or large garden areas. Some properties even charge a monthly fee for parking spots or other perks.
Even if you have access to a large truck and move everything yourself, you'll still incur moving costs. Fuel, as well as moving supplies, cost money. And don’t forget you’ll need to buy beer and pizza for those friends who help.
When hiring a moving company, always be upfront about how much stuff you have to move and get at least two quotes from two companies. Also get recommendations before choosing who to go with.
It’s extremely unlikely that you won’t need to put ANY money into the home you buy. Small home improvements, re-painting walls, and re-doing flooring are all quite likely fixes you'll do. Even when buying a brand-new home, you'll need to buy window coverings and other finishing touches.
We Can Help!
We know this all sounds VERY overwhelming but don’t let it deter you from getting into the housing market if that’s your dream. If you know what additional costs you'll have in advance, you can budget or borrow accordingly. If you have any further questions or would like to begin your journey to homeownership, please contact us at the Garman Group.