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When buying a property, it's not just the price of the apartment or house that needs consideration, but also the fees related to various stakeholders and contracts involved in the sales process. While it's not mandatory to use these services and some sales are made directly between individuals, their use is quite common and it's important to account for them. From notaries to brokers, here are all the additional costs to anticipate when purchasing real estate!
Hiring a real estate hunter can save a lot of time and reduce stress, but it comes at a cost. Their rates vary depending on the organization, services provided, and the region in which you are buying. Real estate hunters typically charge in three different ways:
These fees are separate from agency commissions, which will need to be added to the purchase price.
Agency commissions are generally included in the sale price of a property and range from 4% to 10% of the sale price.
In every real estate purchase, it's mandatory to pay acquisition fees, commonly known as "notary fees." These fees comprise various costs and taxes paid to the notary, as well as to the department, municipality, and state.
These fees amount to about 2% to 3% of the purchase price for new properties and between 7% to 8% for properties over five years old.
Brokers are usually compensated in three ways:
If you want to know more about the functions of the broker, check out our article on the subject!
If your offer is accepted by the seller, you will sign a promise or a sales agreement. This is accompanied by a deposit from you, amounting to 5% or 10% of the property's value. If you back out of the sale without a valid reason after your 10-days withdrawal period, this deposit will not be refunded.
To learn more, read our article on the promise to sell.
Unless paying in cash, you will need to apply for a loan from a bank. You will then have to repay an interest rate, set by the bank and negotiable. It's challenging to estimate the rate as it varies by economic conditions and the chosen bank.
This loan includes a disability-death insurance, with payments starting once the application is accepted, sometimes even before loan repayment begins!
When buying a property, always keep in mind it may need some renovations. Whether it's major renovations or just minor refreshing, these have a cost that should be added to the purchase price! You can get an estimate of the renovation costs by bringing an interior designer or contractor during one of the visits.
Once you buy your house, you will have to deal with various costs: property tax, housing tax (if you buy a second home), co-ownership fees (if you live in a co-ownership), income tax or real estate wealth tax...
For more on the benefits and costs of buying real estate, check out our article on the subject!
