Vernon Real Estate Buyers Guide

Closing Costs to Consider

Purchase Deposits:

When you make an offer it is common that you pay something of a deposit at the time your offer is accepted. In our trade area $500 to $1000 is frequently seen. However, when you have removed your subject conditions (i.e. home inspection, title search, financing), money is normally paid into Trust.

In the lower and average priced ranges, the initial deposit of $500 or $1000 is usually increased to $5000. Higher amounts are typical if it is a more expensive house, say over $250,000. In some areas of the province 10% of the purchase price is the norm.

Higher deposits are often required on new housing especially if they are still under construction. Deposits are not an added expense, they form part of your down payment. Deposits are not normally paid out to the Seller. They are held In Trust as a stakehold under the Real Estate Act and disbursed only after the property is registered in the Buyer's name.

Home Inspection Costs:

Buyers pay for various items prior to making their contract firm. For instance they pay $250 to $350 plus tax for a Home Inspection (money well spent). They may also pay for an appraisal $250 to $350 plus taxes if their mortgage company has that requirement.

Septic And Swimming Pool Costs:

Septic and swimming pool inspections often apply and they usually range in cost from $150 to $300.

Survey Certificate Costs:

Occasionally surveys must also be done and they are about $350 on a normal city lot. We at the Jane Field Vernon Real Estate Group try, whenever possible, to obtain any existing survey certificates from the current owners and pass them along to the buyer at no cost to the buyer. This is only workable if there has not been any additions to the home.

Miscellaneous Costs:

With some purchases, engineering tests and extra legal advice may have to be paid but this is uncommon.

Fire Insurance Costs:

Fire insurance premiums must be paid prior to your mortgage funds being advanced. This is a requirement of your mortgage company. Fire insurance costs are around the vicinity of $500 to $1000.

Property Purchase Tax:

If this is your first home, you will not have to pay Property Purchase Tax unless the home costs over $265,500 (in the Vernon area). This is a great perc for starters! Otherwise you will have to pay 1% of the first $200,000 and 2% on the balance. That works out to $2000 on a $200,000 home.

Goods And Services Tax:

GST is payable only on new and substantially renovated homes and possibly homes that have previously been used for businesses. "New" is defined as having not been lived in. If you or an immediate relative are going to occupy this new home then you are probably entitled to the GST rebate of 36% of the 6% tax which reduces your tax payable from 6% to about 4.48%. The GST rebate is applicable only to houses selling at $350,000 or less. Homes between $350,000 and $450,000 only quality for a gradually reduced rebate which declines according to the purchase price.

Legal Fees And Disbursements:

Legal fees can have a wide range depending on the purchase price and the amount of the mortgage(s). Frequently, they are in the range of $650 to $900. Disbursements is a general name law offices use that cover office expenses such as faxes and photocopies, long distance costs, postage and courier costs and probably most importantly, costs of title searches and documents. Most of the time, the realtor has obtained and paid for the title search documents so you won't have to pay for these at all. Certainly if you are dealing with the Jane Field Group, you won't have to! Just tell your lawyer or notary you have already received and read these documents as the Jane Field Vernon Real Estate Group made sure you had them. If you have questions about these documents, be sure to ask your lawyer.

Adjustments:

These are the costs that are shared between the buyer and the seller. These costs include water, sewer, (usually) garbage and property taxes. The lawyer or notary collects from the seller to pay for the portion of the calendar year the seller has used. The buyer will pay the remainder either on the statement of adjustments, or on their own over the remainder of the year. The Home Owner Grant is normally claimed by the person in possession of the home on the tax deadline date. It is important to note you can only claim one Home Owner Grant per year. So you cannot claim it on both the house you are buying and the home you are selling.

Brokerage Fees:

On some occasions, home buyers may be required to pay their Mortgage Brokers a fee. This is unusual and is normally an expense only incurred by buyers who present an unusually high risk to the lender.