Extra Costs When Buying a Home

By Diti Dumas and Morgan Dumas

Anyone knows that super-strict budgeting is the key to keeping track of your finances and living within your means. The same concept can be applied to the cost of a home, where the buying price is not the only cost a future homeowner will incur. To make sure you’ve covered all of the bases when contemplating home ownership and to avoid being put out by a string of extra costs, consider:

Home inspections: Home inspections aren’t relatively expensive (on the lower end of the scale, they’ll run approximately $300) and are a very wise investment if you consider the surprises that might be in store for you later on. Mould, faulty wiring, leaks and cracked foundation will cost you much, much more than $300 if the problems aren’t discovered until the home is yours.

Maintenance: Set aside a percentage of the total cost of your home for regular maintenance. This will keep your home in top shape and can act as a bit of an emergency fund should something need to be replaced, repainted or repaired. For older homes, saving five per cent is a decent amount. For newer homes, you can feel confident with around three per cent.

Extra inspections and hookups:
Depending on the area of the property you’re moving to, the water may need to be inspected. The best way to gauge the water quality is with at least three separate inspections, and they may cost a few hundred dollars. Utilities will also need to be connected or hooked up, and that might include the telephone, gas, hydro, cable and internet. Depending on the companies you do business with, installation can be included, bundled or might cost extra.

Title insurance and the property survey: Title insurance has not really taken off in Canada yet, but because of rising title and mortgage fraud, it should be. A property survey can run a couple of thousands of dollars, but when you’re spending more than ten times that on a home, knowing all of the details makes sense.

Land transfer tax: Some provinces (including Ontario) require land transfer tax payments that can vary depending on the amount of money in question. The handy Royal LePage Land Transfer Tax Calculator can help you determine the total cost, and it is found here: www.royallepage.ca/CMSTemplates/AskRLP/Buying/BuyingTemplate.aspx?id=95

The extras: The extras might not be little by any means and could be the largest additional cost. The extras can include light bulbs, a lawn mower, window coverings, light fixtures, pool equipment, new locks and appliances that aren’t sold with the home.

Diti Dumas is a Sales Representative with Royal LePage R.E.S. Ltd./JOHNSTON & DANIEL DIVISION, Brokerage.  Diti is a regular contributor to the Muddy York Blog.  Diti’s website is located at www.ditidumas.com.

Morgan Dumas is an aspiring writer and journalism student from Ryerson University in Toronto.

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