Hidden costs to be aware of when buying a house

By LegalMatters Staff • There are many “hidden” charges when buying a home. They vary in size but can add up, which will cause real problems if you are already struggling to make your mortgage payment each month.

“If you are putting down less than 20 per cent toward the purchase of a home in your down payment you must purchase mortgage insurance in Alberta,” says Edmonton real estate lawyer Mark Demas. “This protects the lender as the insurance may pay the outstanding balance if you were to die before the mortgage is paid off.”

He says buyers should also pay for a certified home inspector to give the home a close look before a purchase is finalized.

“The upfront cost will be between $500 to $700, which is minor as compared to the price of paying for potential repairs the home may require,” says Demas.

He says a land survey is also required, prepared by a registered Alberta land surveyor.

“This document includes the location and description of all buildings and structures, plus evidence of municipal compliance with all municipal bylaws and regulations,” says Demas. “Plan to spend up to $2,000 for the survey, depending on the work and research involved.”

Having a real estate lawyer review all the legal documents, including the Agreement of Purchase, is always a good idea, he says.

“That will ensure property taxes are up-to-date and that there are no claims or liens registered or on file against the property,” says Demas. “They also can confirm if there is a valid property title and calculate what land transfer tax is due upon closing, as well as any other tax implications.”