To avoid hidden fees when buying a home in Vancouver, there are several costs to be aware of. Purchasing a home is arguably one of the biggest financial decisions you will make in your lifetime. As you start your hunt, don’t forget there will be other costs associated with your purchase as well as the price of the home. Here are four essential fees to consider as you begin planning:
Property Taxes
The annual property tax bill is divided between buyers and sellers according to how each party owns the property. Calculated from the July 1st assessment date this aspect is managed by your lawyer. The Vancouver Speculation Tax and Federal Underused Housing Tax are newly created taxes that aim to target homes that’re vacant for, than six months a year in an effort to alleviate the housing shortage. To avoid being subject to these taxes homeowners must complete a registration process online for their property/properties each year. If they or a tenant have lived in the property for 6 months or more during a calendar year they will not be subject to the tax.
Title Insurance
Most lenders require title insurance to keep their financial interests (the mortgage) and your property safe from title disputes, even though they’re uncommon. This protects the lender and your investment in the home should someone ever try to fraudulently forge the title documents. This is extremely rare, but lenders always like extra assurance to cover their behinds and it’s good to cover yours as well. To learn more, checkout my article Title Insurance Explained.
Home Inspection
This step is crucial in the buying process as inspection results can impact price negotiations and repair requests. The Inspector will do a thorough inspection of the property, inside and out, and of the parkade and exterior of the complex/unit if in a strata property. During the inspection they will check all appliances to ensure they’re in working order, test of heat/moisture behind walls, check the foundation, and much more. As a result, plan to budget around $500 to $800 or more for this depending on the size and location of the home as well as the scope of investigation.
Appraisal Fee
Prior to securing a loan an appraisal will likely be necessary to assess the property’s. value. Your lender will hire an outside Appraisal firm to give a professional opinion on current market value. The cost typically ranges from $300 to, over $500 or more based on property size and appraisal scope. For more on home appraisals, you can check out my article explaining it in depth here.
While there may be several things that need to be done before the purchase, they are all manageable and not overly complex. The significant cost will likely be your home so it’s important to budget for additional smaller fees that can accumulate over the sales process, and over time. For more tips on home buying, check out my blog post on the 8 tips for buying a condo in Vancouver. Should you have any questions about this or other real estate info, please feel free to get in touch with me. I’m here to help! 😊 604-726-6087
