Additional costs to purchase a home
Don't be taken by surprise! This page is intended to make you aware, and help you roughly calculate, the additional costs of buying your new home.
Property Inspection. An inspection is a thorough evaluation of the structure, systems and components of a home. The inspection report is usually multi-paged, and comments on the condition of, but not limited to foundations, electrical, plumbing, heating, water heaters, appliances, fireplaces, drainage, roof, walls, floors, attic, crawl spaces, and patios. Costs will vary greatly depending on whether you're buying an apartment, townhouse or house, and will size of the house.
Property Transfer Tax. This tax is payable on the purchase of all real property in BC. The calculation is based on 1% of the purchase price up to $200,000 and 2% of any amount above $200,000. There is an exemption for first time home buyers, please consult your lawyer or notary to see if you qualify.
Legal Fees. A lawyer or notary will cost you approximately $750 for a purchase and a mortgage, add another $450 if you are selling a property at the same time. The legal fees to only register a mortgage are approximately $350. There will also be fees for disbursements, which are any out of pocket expenses incurred by the lawyer or notary, including Land Title searches, filing fees, courier costs, and such. Remember that a notary cannot provide legal advice, such as determining if a Contract of Purchase is legal and binding, and cannot represent you if the seller backs out of the Contract.
Adjustments. These are pre-paid expenses which your lawyer or notary will pro-rate between the seller and the buyer. For instance, a typical adjustment deals with the property taxes paid to the City or Municipality. The amount paid will be adjusted as of the adjustment date and one party will be required to reimburse the other. If the purchase occurs before taxes are paid to the City the seller gives his share of the years taxes to the buyer. If the sale completes after the taxes are paid to the City the buyer pays his share of the year to the seller. You'll find this on the Statement of Adjustments that you receive from your lawyer or notary.
Survey Certificate. A bank will require a survey to confirm that the house and any outbuildings do not encroach or cross over the property lines. The seller will sometimes have a survey, especially if the seller also had a mortgage on the property, and Wayne will inquire to see if they do. Otherwise, a new survey will cost approximately $270. CMHC requires a survey on all properties insured by a high ratio mortgage. Keep in mind, however, that surveys can be replaced by title insurance and that new surveys are not required on strata properties.
Property Appraisal. Sometimes ordered by your lending institution, the property is evaluated by a professional appraiser to determine the market value of the property. This is done to ensure that the lending institution is not over lending on the property and to protect the borrower from over-paying. Generally, a standard residential appraisal will cost approximately $200.
Form F Certificate. This is required only when a strata property or condominium is purchased. The certificate is issued by the Strata Corporation in order to confirm that the previous owner does not owe the Strata Corporation any money. This certificate will range in price but is approximately $75.
Insurance Binder. This is a requirement by the bank to ensure that the borrower has arranged sufficient insurance to cover any losses that may be incurred on the purchase. Proof of coverage by way of an insurance binder supplied by the insurance agent is necessary and usually costs $35 (this is not applicable for a strata property).
This lists only the major items. This information is being provided to assist in the planning of a home purchase. It is not intended to be legal advice and the information set out may not be applicable in all cases. In some situations, a purchaser may be required to pay for other additional expenses such as a second mortgage, an assignment of rents, power of attorney, or independent legal advice.