What are the costs of PURCHASING & HOME OWNERSHIP? Buying a home is one of the biggest purchases you’ll make in your lifetime. While the home itself can be enough to give you sticker shock, it is important to be prepared for all the other expected – and unexpected – expenditures, from maintenance and utilities, to insurance and emergency costs.
Here is a look at some of the costs associated with purchasing and home ownership that you might not be aware of.
Inspections
Prior to removing any 'subject to clauses' in your offer a home inspection is a crucial step in the home buying process, offering buyers valuable insight into the property's condition before finalizing the purchase. An experienced inspector will thoroughly assess the home’s major systems—such as the roof, plumbing, electrical, heating, perimeter drains and foundation—to identify any existing issues or potential future problems. This information helps buyers make informed decisions, negotiate repairs or price adjustments if needed, and feel confident about their investment. Even when a home appears perfect at first glance, a professional inspection can reveal hidden concerns that might otherwise go unnoticed, making it a smart and essential part of any home purchase. Additionally you may also want to do a water/well inspection, septic system inspection and oil tank scan depending on the property type.
Here is a look at some of the costs associated with purchasing and home ownership that you might not be aware of.
HOW MUCH DOES A HOME REALLY COST?
Inspections
Prior to removing any 'subject to clauses' in your offer a home inspection is a crucial step in the home buying process, offering buyers valuable insight into the property's condition before finalizing the purchase. An experienced inspector will thoroughly assess the home’s major systems—such as the roof, plumbing, electrical, heating, perimeter drains and foundation—to identify any existing issues or potential future problems. This information helps buyers make informed decisions, negotiate repairs or price adjustments if needed, and feel confident about their investment. Even when a home appears perfect at first glance, a professional inspection can reveal hidden concerns that might otherwise go unnoticed, making it a smart and essential part of any home purchase. Additionally you may also want to do a water/well inspection, septic system inspection and oil tank scan depending on the property type.
Closing Costs
When you close on your new home and take legal possession, you’ll need to pay for a few things before you get the keys. These include legal fees and disbursements (Lawyer or Notary fees for doing the legal transfer of title and adjustments/payouts). Land transfer tax - this one can be sneaky as some buyers do not realize there is Property Transfer tax here in BC the amount of which is: 1% on the first $200,000, 2% on the amount above $200,000 up to $2 million and 3% on any amount over $2 million. This adds up. There is also title insurance, property insurance and interest adjustment.
When you close on your new home and take legal possession, you’ll need to pay for a few things before you get the keys. These include legal fees and disbursements (Lawyer or Notary fees for doing the legal transfer of title and adjustments/payouts). Land transfer tax - this one can be sneaky as some buyers do not realize there is Property Transfer tax here in BC the amount of which is: 1% on the first $200,000, 2% on the amount above $200,000 up to $2 million and 3% on any amount over $2 million. This adds up. There is also title insurance, property insurance and interest adjustment.
Mortgage Payments
Your mortgage payment is likely to be your biggest monthly expense. The amount depends on your down payment, interest rate, and loan term. Be sure to factor in potential interest rate changes, especially if you opt for a variable-rate mortgage.
Property Taxes
Property taxes are based on the assessed value of your property. They are due at a certain time each year and can be added to your monthly mortgage payment, meaning that your lender can pay on your behalf.Maintenance Costs
A home requires constant upkeep and maintenance. Whether it be small projects or routine maintenance, it will all cost you time and money. Projects such as re-shingling or replacing windows and doors might not need to happen often, but it is important to keep track of the larger maintenance projects so you can avoid being surprised with a large cost when those things need to be repaired or replaced.Utility Costs
Utility costs do not just include hydro and gas – they can include other costs you have to pay locally, such as water and sewage, which might not be included in your property taxes.Homeowners Insurance
As a homeowner, you need to have insurance. Premiums will depend on a number of factors, such as age, condition and value of your property, location, claim history, contents, proximity to a firehall and fire hydrants, and specific features (ie. wood vs. gas heating). Find a local insurance broker in your area to get a quote on the home you are interested.Condo/Strata Fees (if applicable)
If you purchase a home or a condo within a strata, you will be required to pay monthly fees for the upkeep of the property/building. These costs often include garbage pickup, snow removal, landscaping, yearly maintenance and is contracted out by the strata corporation each year.
Emergency Costs
Emergencies are bound to happen, so having some money set aside to help cover these costs should an emergency occur is smart. Keeping this in mind when searching for a home is also a good idea, as an older home may result in more repairs than a newer build.Roof repairs, tree removal, fixing a bathroom sink or toilet, replacing appliances and HVAC repairs are just some of the emergency repairs you should be prepared for.