Shaunna McIntosh Ottawa Real Estate Broker / REALTOR®

Hidden Costs To Watch Out For When Buying a Home in Ottawa

Hidden Costs When Buying a Home in Ottawa

Buying or selling a home is one of the largest financial transactions you will ever make. It may even seem daunting or overwhelming. But it doesn’t have to feel that way. When considering all the fees and any potential hidden costs to watch out for when buying a home in Ottawa, knowledge is power! A home purchase or sale goes beyond just the listing price of the property. There are a number of other costs to factor into your overall budget. To help you avoid any unnecessary surprises when buying or selling a home, I have outlined a few of the additional costs to consider before you pull the trigger and purchase your next home:

Home Inspection

What are the hidden costs associated with buying a home in Ottawa you may ask… let me tell you!

A home inspection is commonly included as a condition in an offer to purchase a home. However, there is a growing trend where offers are made without any conditions to enhance their appeal to the seller. It is crucial to emphasize the significance of home inspections conducted by qualified professionals. These inspections play a pivotal role in bringing potential issues to your attention before committing to the purchase of a property. The thorough evaluation performed by a home inspector covers every aspect of the property, and they furnish you with a comprehensive written report detailing their findings.

In Ontario, the typical cost of a home inspection ranges between $300 and $500. Even if you choose to submit an offer without a condition of a home inspection (it is advisable to consult with your Realtor beforehand), it is still recommended that you arrange for a home inspection. While your options for recourse against the seller may be limited after you take possession if you did not do the inspection during your conditional period, being aware of any deficiencies within your home is prudent for a homeowner. This knowledge enables you to take proactive measures to address any issues.

Upon completing the home inspection and receiving the detailed report, you gain insights into immediate fixes and areas that require ongoing monitoring. It is essential to remember that regular home maintenance is crucial. Knowing what to look out for and identifying inexpensive repairs that can be addressed promptly can help you avoid major repair expenses in the future.

Land Transfer Tax

The buyer pays land transfer tax to the province of Ontario when the transaction closes. The cost of which is calculated by the final purchase amount of the property by your lawyer.  If you are a first‑time home buyer, you may be eligible for a refund. The refund can be for all or part of the land transfer tax. I recommend looking into this rebate as a first time home buyer. The rebate is called The Land Transfer Tax Refund for First Time Home Buyers. This rebate could save you hundreds or even thousands of dollars on closing. To calculate approximately how much Land Transfer Tax you may pay on a specific property, you can use the Ratehub.ca calculator.

Mortgage Default Insurance

Mortgage default insurance is required for Buyers in Ontario who are purchasing a home with less than a 20% downpayment. In Ontario, there are several mortgage insurance providers. One of which called CMHC insurance and it is issued by the Canada Mortgage and Housing Corporation.  This insurance protects the mortgage lender in case you can’t make your payments and default on your mortgage. The mortgage default insurance premium is calculated as a percentage of your mortgage amount. This percentage varies depending on your down payment percentage and amortization period. But it usually ranges from 1.80% to 4.00% of your mortgage amount. This is definitely a big one to watch out for when thinking of the hidden costs when buying a home in Ottawa. 

Home Insurance

Home insurance is something every homeowner should have. This protects your home and its content should something happen. The coverage will depend on what insurance plan you sign up for. But most basic plans include fire, theft, flooding, and severe weather. We recommend doing your research. Get a few different quotes to find the best policy that works for you and your family.

Legal Fees/Disbursements

When buying or selling a home, you will require a real estate lawyer or notary. They will look over the paperwork and facilitate the closing of the transaction. Their job includes registering the mortgage and the owners in the land registry system. They’ll review all the legal documents for you. This includes the agreement of purchase and sale and the mortgage documents, and ensure everything is above board. Closing and disbursement fees very depending on the type of property that you are purchasing and the complexity of the sale. Contact your real estate lawyer to learn more.

Moving Fees, Renovations, Redecorating Costs

These types of costs will all depend on your personal situation. Anything from hiring a moving service, packers, painters, home cleaners etc. will cost money. These should be considered and factored into your final budget. These costs will very on a case by case basis. Some people will be more hands on with their move than others. Before you purchase your home, take into consideration what your families needs are and consider calling these companies ahead of time to not only find out the cost, but also their availability.

Are you looking to buy or sell a home in Ottawa and are concerned about the hidden costs? I would be happy to discuss everything with you in detail to put your mind at ease. Do not hesitate to reach out for my assistance!

Are you thinking of purchasing a home in the Ottawa area? If so, we would love to help! Check out our page on Buying a home here in Ottawa to learn more about the process and what we do to help Buyers just like you get into the Ottawa real estate market! 

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