As Canadians, we have been told from a young age that owning a home is the best financial move you can make.
And while it may be the best move for some, others may be better off renting.
If you are considering buying a house or moving into a larger place, you’ll want to consider all of the costs involved – and there are a lot of them.
But what many forget to consider are the changes in lifestyle moving from one house to another ‒ and how pricey those changes can be.
For example, is your new home farther from work? And if so, what will it cost for the extra commute?
Hidden costs when buying a house
It’s not enough to simply find the house of your dreams, you need to know everything about that house ‒ the good, the bad and the ugly.
Things like property taxes, home inspections and repair work are costs every home buyer will consider. But the most savvy of the bunch know there’s more to buying a house than meets the eye.
This lifestyle change is one of the biggest costs when moving into a new house. Even though these changes aren’t always directly related to the move itself, they can still potentially increase your monthly expenses in the future.
If you are moving into a neighbourhood that has a higher crime rate, you’ll probably want a home alarm system. If you don’t already have one, you could be paying approximately $30 per month for the service.
In general, home alarms are offered in two ways:
- low costs upfront with a long-term contract, or
- substantial costs upfront with little or no contract.
Make sure you find a system that works for you and avoid paying additional charges for add-ons you don’t necessarily need.
If your new home is farther away from your workplace, you could be paying more for fuel. Or, if you need to buy an additional vehicle, you’ll need to budget for the initial cost plus the ongoing monthly expenses related to a new car.
Ideally, you should consider buying a home that is a reasonable distance from your work, shopping centres and major transportation routes.
If you live in a larger city, you’ll want to consider if rapid transit is an option in order to reduce your transportation costs.
When I moved into my current home, it was farther away from my work. But because the house is located near rapid transit, I didn’t incur any additional fuel costs.
If you are moving into a larger home, you’ll likely be paying more in utilities going forward as bigger homes cost more to heat. When buying a home, you’ll want to factor this into your monthly budget and make sure you buy only enough square footage for what you actually need.
If the house you’re buying has a higher assessed value than your current home, you will likely be paying more in property taxes each month.
Make sure to check the assessed value of the home to get a better idea of what the annual taxes are compared to what you pay now.
Along with monthly expenses, there are other additional costs that you may have to pay upfront when buying a home:
- New furniture. If the house is bigger than your current home, you’ll likely need to buy new furniture to fill out each room.
- Basic repair work. Older homes usually require some basic repair work, so you’ll need to consider the cost of buying basic tools like hammers, drills, saws and ladders. If you’re moving from an apartment to a single detached home, these are things you’ll want to buy for basic home maintenance.
- New appliances. If the house does not include appliances, you’ll want to budget for buying them immediately. Costs can vary, but you could potentially be paying $2,000 to $5,000 for new appliances.
- Professional cleaning and painting. You may want to consider having your new home professionally cleaned and/or painted prior to moving in. Cleaning a home can initially cost hundreds of dollars depending on the time required to clean it, while painting can cost upwards of $3,000 depending on the size of the house.
- Lock change. You may want to have the locks changed once you’ve moved in in order to give yourself peace of mind.
- Home inspection. This will help to make sure the house is in good condition and there are no significant deficiencies. If you’re buying a condo, you might also want a professional review of the condo documents to make sure the building is being managed effectively. A home inspection can cost approximately $500 and is done at the responsibility of the buyer.
Plus a travel bonus worth another $150.
Offer ends December 21, 2018.
Hidden costs when selling your house
The best case scenario when listing your house for sale? You end up making more than what you put into it.
But how much selling your house can cost you might just be more than you bargained for.
If you have a mortgage on your current home, you could be faced with a steep penalty to break it.
Typically, fixed rate mortgages have the biggest penalty and variable rate mortgages are only 3 months’ interest.
Related: Burn Your Mortgage Review
Before you list your home, you’ll want to have it professionally measured to make sure the square footage presented on the listing is accurate.
There are companies that measure homes and properties, and most of them guarantee the dimensions they provide in the event of a dispute.
If you’re listing your home, you’ll want to have the measurements verified to reduce your liability in the event that there is a misrepresentation in the square footage of the home.
The cost of a professional measurement varies between regions, but generally starts at a few hundred dollars.
Sellers will also want to consider having their home professionally appraised.
Depending on whether you use a real estate agent or not, some can easily provide a market assessment of your home while there are third-party companies that provide a professional appraisal in case you want a second opinion.
Staging your home
Staging your home can sometimes help a place sell faster.
There are many companies that offer professional staging that can tailor the furniture requirements for your home. This is a service that is sometimes offered through a realtor, but if you’re listing your home privately, you might want to consider the use of a staging company.
Related: Budget Home Decorating Ideas
Realtor and legal fees
Along with the realtor fees of selling your home, you will also have to pay legal fees to handle the paperwork related to the sale. Legal costs vary between regions, but in Alberta, typical home sale legal costs are about $1,000.
Did we miss anything?
With plenty of hidden fees to consider, there may still be a few that have flown under our radar. So tell us…
What hidden fees did you come across when buying or selling your house?