Contract to Completion List of Costs for the Buyer
As a new home buyer after you sign the Sales Contract to completion date there are a number of costs you will encounter. Here is a list to prepare you.
1. Purchase Price/ Mortgage
You will need to ensure that you can secure your funding for your new home.
You will need to have your deposit accessible and ready to transfer. In many cases your Real Estate Agent can hold your deposit in a trust before completion.
3. Home Inspection fee
A Home Inspection is well worth the investment as this professional will be able to educate you on upcoming repairs or defects of the home. This is an examination of the physical structure of a house.
4. Legal Fees
There are conveyance fees, preparation of statement of adjustments and mortgage registration. 5. Property Transfer Tax
This is a one- time tax paid to the provincial government for the buying of real estate. In British Columbia a provincial property tax of 1% on the first $200,000 plus 2% on the value between $200,000- $2,000,000 plus 3% tax on the portion above $2,000,000. If you are a first- time home buyer you are exempt from this tax up to $500,000. Between $500,001- $525,000 the tax is calculated on a sliding scale. GST may be applicable on new homes or presales.
6. Property Tax
This is an annual tax paid to the local municipality for the upkeep of the city. The taxes will be split from January 1st to completion date being the responsibility of the seller and yours the remainder of the year. Depending if completion date is before or after July will determine who will collect and pay the taxes.
7. Utility setup/ payment
You will need to setup and pay for utilities starting after completion date.
8. Property Insurance
The property insurance should start at 12:01am of completion date. This is to protect your investment as a new buyer.
Here is a recommendation of where to purchase Home Insurance:
Home Insurance: Tsawwassen Insurance Brokers Ltd. / Janet Watts
16049431231, firstname.lastname@example.org, https://offices.insurebc.ca/delta/tsawwassen/
The following may/ may not apply:
9. Survey Fee
The lender may require that you pay to find out exactly where the dimensions of the land are. In many cases this can be obtained from the previous owner or City Hall. In lieu of this Title Insurance can be purchased which provides protection against several defects such as an up- to- date land survey.
10. Appraisal Fee
A lender may require an estimated value of a property to qualify their loan.
11. Mortgage Loan Insurance
If you are buying a home for less than 20% down, you will need to pay a premium of between 1% and 4.3% depending on the mortgage amount and amortization period. The premium is to protect the lender in case of default.
12. Moving Expenses
You may need a moving truck, new furniture etc. for your new home.
13. Renovations/ Repairs
You will need some funds set aside for repairs, renovations, or upgrades you see after moving in.
Contract to Completion List of Costs for the Seller
1. Real Estate commission
The buyer usually pays between 7% to 8% on the first $100,000 and 1-2% on the remaining total. This is then split with the buying agent.
2. Discharge of a Mortgage
In British Columbia the law requires a mortgage company to provide you with a discharge document when the mortgage is fully repaid. You may pay the mortgage company to prepare this document.
3. Property Taxes
This is an annual tax paid to the local municipality for the upkeep of the city. You will need to pay your portion up to completion date since January 1st.
4. Legal Fees
A lawyer will need to check the documents prepared by the buyer’s lawyer and explain them to you. They will ensure you have no further obligation on the mortgage. Ensuring all the title documents are properly drafted. As well, preparing a statement of adjustment.
5. Moving Expenses
You will need to hire cleaners to professionally clean the property. As well, any repairs that the buyer noted. Then the moving expenses of vacating the property.