Understanding Closing Costs Of Your First Victoria Home

April 18, 2022

Knowing the exact closing costs of purchasing a home can be challenging. It depends on factors such as the types of fees involved and the home’s purchase price. In Victoria BC, the closing costs of homes mostly fall between 3% to 4% of the purchase price. But it could be higher, especially on occasions where the buyer pays for fees they shouldn’t. Thankfully, Brad MacLaren, the best realtor in Victoria BC, can help home buyers calculate their closing costs with ease. If you are in the real estate market for the first time, it is important to know how the process works. Keep reading to gain a better understanding for the closing costs of your first Victoria home.

Closing Costs Of Your First Victoria Home

 

Fees That Makeup Closing Costs?

Several types of fees make up the closing costs a homebuyer pays. Most times, these fees must be paid upfront and can’t be rolled into the buyer’s mortgage. Here are the fees homeowners in Victoria, BC, may have to bear.

Adjustment Costs

An adjustment cost is a reimbursement the buyer makes to the seller for any utilities or property taxes paid after the buyer possesses the property. It varies but could be around $500.

Legal Fees

When purchasing a home, buyers have their lawyers handle the administrative details of the deal. This ensures that the deed is transferred appropriately. Legal fees are mandatory fees but vary based on the complexity of the agreement. In most cases, it ranges between $1,000 to $1,500.

Disbursements

A lawyer gets reimbursements for miscellaneous fees such as bank charges, mailing costs, land transfer fees, and photocopies. It is a mandatory fee starting at $100.

Home Inspection

The home inspection fee is not mandatory but is highly recommended. Having a property inspected before making any deal helps the buyer know the actual condition of the house. It costs between $350 to $750.

Home Insurance

Home insurance is any fee that makes up the total closing cost of a home. It covers any damages or losses to the home. The home insurance premium a homeowner gets is dependent on several factors. This includes the type of house, the house’s materials, the crime rate in the neighborhood, and the environmental hazards it’s exposed to. On average, home insurance costs between $800 to $1,200 annually.

Title Insurance

Title insurance is not a mandatory fee. However, if the buyer is buying the house on a mortgage, the lender will require it is in place. Title insurance protects the lender against defects in the home’s title, such as overlooked back taxes, HELOC, and conflicting wills. Title insurance costs an average of $300.

Property Appraisal

When buying a house on a mortgage, the lender will request an appraisal. This helps the lender determine the property’s value against the mortgage. Property appraisals in Victoria, BC, cost between $350 to $500.

Estoppel Or Information Certificate

When buying a strata property, like a condo, Estoppel is likely mandatory. It is an official statement issued by the condo corporation detailing the outstanding payments or contributions in the condo. It would usually cost $35.

Other fees homebuyers may pay include:

  • Mortgage prepayment penalty
  • Mortgage default insurance
  • Moving costs
  • Switching or setting up utilities
  • Goods and services tax
  • Property transfer tax
  • Building Location Certificate (BLC) or Land Survey Certificate

 

Homebuyers may not be obliged to pay for all the closing cost fees with proper legal representation. But matter how much a buyer tries to minimize costs, closing costs are inevitable. Homebuyers in need of expert advice on closing costs should contact Brad MacLaren, the top realtor in Victoria BC. Whether buying, selling, or inquiring, Brad’s expertise in Victoria BC real estate make him an invaluable resource.

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