Elements of buying a property are somewhat akin to taking a stroll through the less prosperous part of town. You suddenly find yourself surrounded by people whom you have never seen before, all with their hands out looking for money. You quickly develop writer’s cramp from having to write so many cheques.
Anybody who has bought property knows exactly what we are talking about. With the summer time and real etate activity picking up there may be many would-be purchasers who find themselves entering the market. It is important when undertaking such a major purchase that you remember to leave some “cushion” to absorb all these extra costs and fees.
That property that you buy for $400,000 is actually going to cost you more than $400,000. These additional costs may include among other things legal fees, property survey costs, inspection costs, property tax adjustments, transfer tax, home insurance, moving costs, repairs and renovations, utility hook ups and new furnishing, appliances and tools.
For an easy-to-remember “rule of thumb,” estimate between 1.5% and 4% of the selling price of the residence. So in other words, if you are buying a $400,000 property you will want to allow for an extra $6,000 to $16,000 in additional costs. You can have quite a nasty surprise if you have not allowed for these expenses!