How much does it cost to buy real estate in Nanaimo? The answer depends on many factors including the type of property you choose to buy. Other considerations include: are you looking for new construction or is an older home okay? Would you prefer a house, condo, patio home or a townhouse?
The attached graph will give you an idea of what the average selling price was for each property type as of January 1, 2019. By reviewing this chart, you will be better prepared to decide which type of housing suits your budget.
The cost of buying a home varies, but it is important to know all the potential, additional costs and fees involved.
Once you have determined your budget for what type of home you want to shop for there are other costs to consider. The amount of these closings’ costs can affect the size of your down payment and the size of a mortgage you qualify for. It is important to be aware of these costs and review them with your lender before you start shopping for a house.
Additional costs to consider once you have an accepted offer on a home
Now that you have found a home and the seller has accepted your offer it’s time to do your due diligence. I advise all my clients to invest in a home inspection. Inspections are optional but without doing one you may be buying into a home with some big and expensive problems.
As part of your subject to finance condition on your offer your lender may require an appraisal. The lender will order it, but the buyer will be required to pay for it.
The benefit of Title insurance policies is that they protect you and your lender from title fraud, municipal work orders and other property defects. Title insurance is available through your lawyer and the cost of it will be added to your legal bill.
Insurance is usually a given in that it protects you from losses due to fire, flood and other disasters. Property insurance must be in place before your lender will advance the funds for the purchase.
Now that you will be carrying a mortgage you may wish to buy life insurance, disability and critical illness insurance. Unexpected health or employment changes can affect your income and your ability to afford to make your mortgage payments.
Legal fees and potential taxes
Once all the conditions on your offer have been removed your deal is subject free. Once this happens the paperwork is sent to the lawyer or notary. At this time the lawyer will calculate the following additional expenses if applicable
Land Transfer Tax
Most purchasers, with some exceptions, are required to pay the BC Governments land transfer tax. The Ministry of BC website explains it as follows:
The property transfer tax rate is:
• 1% on the first $200,000,
• 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000,
• 3% on the portion of the fair market value greater than $2,000,000, and
• If the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000 (effective February 21, 2018).
GST or HST
Newly constructed and substantially renovated homes may be subject to GST.
Property taxes, utilities and strata fees
The seller may have prepaid property taxes, utility bills or strata fees before you take ownership of the property. You, as the buyer will reimburse the seller for the portion of the costs from the closing date forward.
Legal fees and disbursements
Your lawyer's fees are considered closing costs. Disbursements include any expenses your lawyer had to pay for work on your behalf. Fees vary and are plus GST. I would recommend calling around to different lawyers and notaries before hiring one.