So what our closing costs on our new home? Are there any hidden fees?
We answer all those questions in this video that's starting right now.
Welcome to Homebuyer's School,
brought to you by Brookfield Residential.
Hi everyone I'm Karl Yeh, welcome to another Homebuyer's School video,
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So today I'm joined by Kristy Seibert,
Area Manager with Brookfield Residential,
and the question we're gonna answer is:
What are the closing costs on a new home?
Good question Karl, so the closing costs
typically include like lawyer fees, title transfer, and often your builder will
cover these fees for you, so closing costs when purchasing a new home don't
always have to be a big burden. Okay what then - maybe describe a couple
of the fees that we're talking about?
So when you're saying lawyer fees, what do you mean?
So basically the lawyer has to be there for
any - to sign any documents right,
especially with the title transfer so
that's going to transfer the property
from the name of the Builder to you. And then as well to transfer the money
for from the mortgage, right? So the purchase amount to be transferred from
your mortgage from your bank to the Builder.
Do you need a lawyer - do you need to hire
your own lawyer or there's one already provided?
Every builder is
different and sometimes even who you're using for your mortgage can
affect which - which lawyer you can use
but quite often the Builder will provide
a lawyer for you. So that's something to
ask your builder and see if that's
something that they provide.
What other fees - even though maybe some builders will take care of it -
what other fees should you be aware of,
in terms of closing costs?
So there are a few things that could come up,
if your community has a homeowner's association, then from the time that you
move in, you would have to pay the homeowners association.
So if it's a set amount per year, the lawyers would calculate from the day you
move in to the end of the year, what that amount would be and that's
something that would have to be paid at closing. Another thing to consider
would be property taxes, so typically the Builder will pay the property taxes in
full for the year ahead of time and so if you're taking possession halfway
through the year then you have to pay back to the Builder for the time that
you're living in the home. Any other costs that maybe - any hidden fees
maybe not hidden fees or things that new homeowners don't really - aren't aware of?
So you've touched on HOA fees, anything else? Like landscaping..
Yeah I mean it's always good to keep in
mind what still needs to be finished around your home so that's something
that a new home offers right, is - is maybe putting your personal touch on things so
some builders include landscaping, others don't, so that's a great question to ask
your builder is, "What's included? Do I need to still account for building a
fence or a deck?" Maybe I want to finish my basement afterwards so kind of
finishing up your home, those can be extra costs. I wouldn't say
that they're hidden, but things to keep in mind for how you're using your
home and how quickly you want to finish those parts of your home.
and let's say you - you bought a home in a community let's say, that's not finished
so you have a lot of homes that are still being built. Are there any costs
associated with that like in terms of a
brand-new community and you're one of
the first few that actually moved in?
In the sense of your purchase price, quite
often in a newer community your purchase
price would be a little bit lower than
what you would see in a - you know -
finished, established community. So
there's going to be a price difference just because the land values are a
little bit different, mm-hmm. But are there any other fees that I
would I would need to think about or
things that - that would be passed on to
me from the Builder or no?
No, so in our purchase agreement we make
sure that it's stated that your home will be
passed on to you without anything owing,
so anyone that's worked on your home,
any of the trades that have done work on
your home will have been paid before - before you take possession so no,
there shouldn't be any additional costs associated.
And if you want to learn more about the real estate purchase contract,
watch our video above.
So Kristy, is there anything else in terms of closing costs or even fees that
first-time homebuyers or any home owners need to know when buying a new home?
The only other thing that I would think of is if you update - like if you made any
upgrades after your home purchase agreement was written. So if maybe you
went with the standard appliances when the offer was written and then a few
months later you decided to upgrade your appliances that cost could be considered
a closing cost if it's something that you didn't make your mortgage specialist
aware of. So if it's something that you want to put into your mortgage then
you need to let your mortgage specialist know about that when you add it in.
If not, it is something that you could pay at closing.
Now I actually had one - one final question is:
Could you move some of your closing costs
or additional costs into your mortgage?
So let's say for example, if there's an HOA fee,
can you roll that into your mortgage or no, that's completely separate?
As far as I know it is completely separate. Anything else to add?
No. Awesome, well thank you very much for
joining us and we'll catch you next time.
That's another edition of Homebuyer's School.
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