Avoid unwelcome surprises when purchasing your next home by preparing for these additional home buying expenses.
Home Inspection
While home inspections are optional, any good REALTOR® will encourage you to have one done before putting in an offer. This is an essential step if you hope to avoid costly repairs, maintenance or other home-related issues later on.
Estimated Cost: $200 – $500
Adjustments
In short, adjustments are costs accumulated between your closing day and when you begin making your first payments. These might include interest charges and other prorated costs associated with utilities, fees or property taxes prepaid by the seller.
Estimated Cost: $400 – $700
Property Taxes
First-time buyers, especially, need to prepare for the added expense of property taxes on top of their regular mortgage payment. However, seasoned homeowners should also be ready to pay a little more, depending on the location of their new home.
Estimated Cost: $3,470 (average cost for typical Edmonton home, annually)
Moving Costs
Unless you’re planning on moving your entire home yourself and/or with the help of loved ones, you’ll likely need to hire a mover. Because average moving costs in Edmonton run between $85 and $200 (not including packing supplies or additional services), we recommend setting aside at least $1,600 to for a full day’s move.
Estimated Cost: $1,600 and up
Home Insurance
As home insurance is a necessary requirement for obtaining a mortgage, you will need to provide proof of coverage before your closing date. Keep in mind, policy costs can vary according to the type of coverage you choose (i.e. basic vs. broad), the insurance provider and your unique circumstances.
Estimated Cost: $1,000 – $2,000 (annually)
Closing Costs
Closing costs are (usually) one-time dues associated with buying a home and commonly include:
- Land Transfer Tax
- Title Insurance
- Legal Fees
- Property Insurance
- Property Appraisal
Your closing costs will vary according to your home’s overall purchase price and, in many cases, may be reduced with the help of an expert REALTOR®. For more information, see our previous post, What Exactly Are Closing Costs When Buying or Selling a Home.
Estimated Cost: 1 – 3% of your home’s purchase price
Utility Charges
As we mentioned, you may have to reimburse the seller for utility costs accrued between your closing and possession date. In addition, many utility and service providers (cable, internet, gas, hydro, etc.) charge initial hookup fees, which can add up quickly if you’re not prepared.
Estimated Cost: Varies by provider
Emergency Fund
While your REALTOR® will ensure your new home is in perfect condition on possession day, sometimes, unforeseen issues can arise. For this reason, it’s essential to keep money aside in the event of an emergency repair or maintenance issue. This will also ensure you have enough to cover any other surprise expenses that may crop up during the home buying process.
Estimated Cost: 3% – 5% of your home’s value (annually)
Furniture and Other Home Items
Almost as exciting as moving into your new home is the opportunity to furnish/decorate/supply it with new “stuff”. While you may not be obligated to buy everything at once, you’ll want to plan ahead for everyday items such as furniture, window coverings and appliances so you’re able to purchase them shortly after moving in.
Estimated Cost: $10,000
Estimated costs as per Genworth Canada unless otherwise stated
Be prepared for every step of the home buying journey with the help of our free resources!
- Home Buyer's Guide
- 20 Common Mistakes to Avoid When Buying a Home
- A Step by Step Guide For Buying Your First Home
Photo credits: shutterstock.com
Posted by Terry Paranych on
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