Before You Sign that Deal
Have you been looking for the perfect house to buy? Have you finally found it? Or have you been looking to sell your property and have just found a willing buyer? You might be thinking that the deal is done. However, there are additional costs that you must think about before signing that deal. Other charges involved in buying or selling a house in Canada are listed below.
Hidden Costs for Sellers
The seller usually has to pay the real estate professional a certain fee. The seller agent has to divide this fee with a buyer agent. Hence, It would be prudent for a seller to pay their real estate professional well as they are going to be doing all the legwork that comes with selling a house.
If the property is meant to give you some extra income, then under Canadian government policies you must pay some tax on the resultant income. If the house is your home, then you are exempted from the income tax.
Other taxes that you can expect to pay as a home seller are the property and utility tax. For the duration that the house is on the market and during negotiations, before a new owner takes possession, you must continue to pay the property taxes and also the utility tax.
Remember you need a lawyer to streamline all the agreements with a potential buyer. Therefore, be prepared to fork out a few hundred dollars. Also, additional costs such as disbursement fees and registration fees will increase to the overall cost of legal services.
If your property was on a mortgage payment plan, some fees would be charged for discharging from the mortgage. Depending on the bank, you may have to incur additional charges if your mortgage is closed. These charges will not apply to those who have completed payment for the houses they are selling.
Hidden Costs for Buyers
Land Transfer Tax
This normally costs between zero point five percent and about one point five percent. Ensure to confirm the percentage charged in your area and for the price range of your property before closing that deal.
You need to get a lawyer to explain the specific details of your contract. They also ensure that the terms favor you so that you do not get a raw deal. Doing this will save you lots of headache in the future. Getting a lawyer to do all this work will require you to dig deep into your pockets.
Home Inspection Charges
You should ensure that an inspector checks out the property before you decide on buying it. They are going to make sure that everything is working properly and that there are no safety threats that should be looked into. Inspection charges typically go for about five hundred dollars.
Usually, one has to pay any interest that has accumulated on their first mortgage before it is closed. Make sure you know the exact amount before getting that second mortgage.
Property Valuation Fees
This fee is charged to know the exact value of the property so as to get a proper mortgage plan.
Property Survey Fees
You will need a surveyor to determine the boundaries of your property so as to prevent your neighbors from claiming part of your land. You will need to pay this surveyor.
You may need to cover your title, mortgage, and home with various insurance packages. These, of course, are optional, but it would be good to consider them as they would protect you against unexpected events. So if you are looking to buy or sell that house, consider these charges before signing that deal.