When it comes to buying a home, it can be easy to focus on the down payment and overlook the other costs. While it is impossible to foresee all the costs, the following are some of the common ones to keep in mind, and your budget, when buying a home in British Columbia.
1. Home Inspection. While this is technically an optional expense, it is very unwise to forego the home inspection. With the home inspection, not only do you get peace of mind that the house is sound, but also another layer of liability insurance protection in case there is something that is undetected.
2. Moving costs. Who is going to move your things to your new home? What costs are associated with the move?
3. Solicitors Fees. When purchasing property in British Columbia with borrowed funds you are required to use a lawyer or notary public to process the transaction. Even if you are not using borrowed funds to purchase the property it is advisable to use a solicitor. There are many steps to a successful transfer of ownership and many things that can crop up even years later if it is not done correctly. Solicitor’s fees vary greatly and I always recommend my clients get 3 or more quotes on this service.
4. Property Transfer Tax. There is a tax charged by the BC Government of 1% of the first $200,000 and 2% of the balance of the purchase price. There are some exceptions to this tax.
5. Title Insurance. More and more often in British Columbia lenders are requiring title insurance. A quote for this insurance should be discussed with the solicitor’s office when you are getting their quote.
6. HST. If you are buying a newly constructed home from a builder, make sure the contract is clear on whether or not the HST is included. Any ambiguity in the contract could cost you a lot of money. Also some builders will not credit a government rebate to the purchaser at closing. This means that you may have to pay the full HST and apply for a rebate after the fact. This rebate amount could be thousands of dollars, so clarity is key.
7. Appliances. If it is a new home, appliances may not be included.
8. Home insurance. If you are purchasing a detached home, the lender will require that you have adequate home insurance. The mortgage funds will not be advanced without it.
These are some of the items that can cause you great stress if not addressed before purchasing your home.
To discuss any of these in more detail, please contact me at 604-837-2983.
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