A house is one of life’s biggest purchases. It’s much more than just signing papers and paying the mortgage in a timely manner…
There are some costs that can easily get over-looked in the whirlwind of home buying. Even with all the best guidance from your trusted real estate agent, sometimes buying a house can become even more expensive than you had planned for, that’s why we wrote this article; to make sure that there are no surprises when you’re buying a home in Port Alberni.
Often Unforeseen Costs When Buying a Home
1. Home Inspection
While this step is not mandatory, it is considered wise to arrange for a home inspection when you put in an offer on a home. The inspection will notify you of any damage or issues in need of repair. A home inspection will cost you a few hundred dollars, depending on the size of the home, and will empower you to better negotiate the price of the house should any issues be found. It’s better to find issues in a home before buying, this is certain!
2. Pest Inspection
Be sure that your new home doesn’t have unseen critters, or hasn’t had infestations in the past. This is another precaution that is not mandatory, but the money spent early on can save you thousands of dollars in the long run and save you from buying into an already existing problem.
If you are financing your home purchase, the money lender will require an appraisal of the home to verify the fair market value. The lenders are not going to invest in a home if the asking price is higher than the market value, because that is a calculation for loss, which they will not risk. An appraisal costs $300+.
This is only required if the current home owners do not know the boundaries of the land. If they do not have this information, you may want to acquire it yourself through a land survey. This is especially important if you have any plans for exterior home improvements like installing a fence or a garage.
5. Closing Costs
These fees are for much of the administrations work that gets done to complete a home purchase: underwriting fees, processing fees, recording fees, title insurance fees etc. These expenses should be outlined in the Good Faith estimate provided by your lender. The fees may change slightly, but are not allowed to increase by more than 10%. Buyers typically pay 2-5% of the purchase price in closing costs, and if you need help figuring out how much buying a home will cost you, don’t hesitate to ask us.
6. Home Insurance
While we won’t advise you on Home Insurance, we will advise that you find someone you can trust to advise you on obtaining homeowners insurance before your mortgage is finalized. Without this very key step in place, the process of buying your house can be deterred, so know the numbers well before you move to far through the home-buying process.
7. Moving Expenses
Even if you’re just moving across town with the help of some friends, you’ll have to at least take into consideration the cost of a truck rental, gas, and packing materials. You should take the time to calculate the amount of personal belongings and furniture you’re planning to move, because you’ll need to pay for that upfront in the size of truck required to do the job.
8. Gap Expenses
We highly recommend that you start a fund for the expenses that still could not have been foreseen even after reading this list. These little expenses come in many shapes and sizes like window coverings, garbage cans, a screwdriver, the hose you forgot at the other house, or the lamp that broke on the moving truck on the way over. If you can put some money on the side for the unexpected, you’ll have better peace of mind leading up to the big move-in day!
As always, if you have any questions about the upfront and possible hidden costs of buying your Port Alberni home, please feel free to contact us.