Homefinders: Costs can sneak up on home buyers

Down payment not the only expense homeowners need to keep in mind

Oak Bay realtor Cassie Kangas has a budget sheet she goes over with all prospective buyers giving them an idea of the additional costs that go along with the purchase of a home.

You’ve found the home of your dreams and put aside the money you’ll need for a down payment, so now all you need to do is make an offer and then sit back and wait for the moving van to arrive.

Well, not so fast. There’s a lot of other costs involved in the purchase of a home, and not being prepared for those costs can lead to your dream home slipping right through your fingers.

Oak Bay realtor Cassie Kangas said she often encounters buyers who are caught off guard when informed of the additional costs they’ll likely face when buying a home.

“Obviously, first-time buyers have no clue because they’ve never done it before. But even people who’ve bought before, or maybe haven’t bought for a long time, there is stuff that has changed or they’ve just forgotten about it,” said the realtor with DFH Real Estate.

Kangas has prepared a budget sheet that allows her to walk through some of the additional costs they’re likely to encounter.

When we go through those hard numbers, people for the most part are always caught off guard by something.”

Some of the costs that buyers should be prepared for are legal fees, land survey, property appraisal, municipal taxes, insurance and moving costs. Unless you’re a first-time buyer and the home is under $475,000, you will also be looking at a property transfer tax of one per cent on the first $200,000 and two per cent on the balance.

“People often don’t realize that none of those costs can be rolled into the mortgage. They need liquid money for that, and it has to be cash available and it has to be paid at closing through the lawyers, in most cases,” said Kangas. “And because you need that on top of your down payment in accessible money, that’s a big chunk of change.”

She said another thing buyers don’t often realize is that there are stringent rules governing the gift of a down payment from a parent or grandparent.

Dana Stevulak, senior mortgage specialist with TD Canada Trust, said there must be a statement showing the money has been withdrawn from the giver’s account and another showing it transferred to the recipient.

“Then we have a one-page gift letter that has to be signed showing that you are in fact gifting this money to a child or grandchild,” said Stevulak. “It’s just really to prevent money laundering so people aren’t just shuffling money around. It’s very simple and straightforward.”

Both Stevulak and Kangas also recommend to get pre-approved for your mortgage before you head out shopping for homes.

“A lot of people put the cart before the horse and they start looking at houses and then want to get pre-approved,” said Kangas. “Maybe they will lose the deal because in between somebody else is pre-approved and gets the house, or they can’t really afford what they think can afford.”

Kangas said buyers should also remember they will be required to make a deposit of no less than five per cent of the cost of the home at the time they make an offer.

“I think the biggest piece of advice I could give someone is to work with a realtor who sits you down before you start looking at homes to go through those hard costs so you know you can afford what you’re looking for.”

 

editor@oakbaynews.com

 

 

Just Posted

Council votes no to changing how residents pay sewer debt costs

After a reconsideration, council votes down motion to move portion of debt costs to tax bill

Dance Victoria Nutcracker contest returns to Oak Bay village

Find Mr. Nutcracker and Tommy Tempo now through Nov. 26 for chacne to win ballet tickets

Oak Bay light up steeped in tradition

Nov. 26 event kicks off Christmas in Oak Bay

Sailors set to deck the hulls for annual Sea of Lights

Lighted sail past set for Dec. 1 with community events at vantage points Willows Beach and Gyro Park

Pig’s Trotters maintain league-winning streak

Trotters win both League and Knockout Trophy in 2017, claiming trophies for last three years.

100,000 bulbs shine bright for Lights of Hope

St. Paul’s Hospital in Vancouver launched its annual campaign to raise funds for equipment, research

Hammy dodges conservation officers

The famous Prince Rupert hammock deer maintains his purple threads

‘No shirt, no service, no Canada’

Shirtless Tacoma man arrested after Canadian border officials say they found meth in rental vehicle

Weekend hit list: Things to do in Greater Victoria

FRIDAY Find Mr. Nutcracker and his cousin Tommy Tempo as they visit… Continue reading

Uptown’s Christmas Tree Light Up is Saturday night

Uptown assembling 54-foot-tall tree for fifth annual Light Up

Nasty note on B.C. windshield sparks online outrage

Vernon’s Bailey McDonald is using a painful experience to start conversation about invisible illness

Port Alberni resident robbed with weapon, thieves steal thousands

Most of the stolen currency is in Canadian $100 bills. The police investigation is ongoing.

Federal funding to combat guns, gangs and opioid crisis

Public Safety Minister Ralph Goodale said illicit drugs are often main cause of guns, gangs violence

Riverview youth mental health centre proceeds

Replacement for Maples Treatment Centre first announced in March

Most Read