Welcome to Homebuyer's School brought to you by Brookfield Residential
get ready to learn strategies tactics and tips on the home buying process join Karl Yeh
as he talks with experts with the savvy and experience to help you find your perfect home
Hello and welcome to another edition of Homebuyer's School I'm Karl Yeh
and this is Cory McDonald community manager with Brookfield Residential in
this episode we're going to answer the question: What's exactly included in the
purchase price of a home? So Corey can you tell me when I'm looking to buy a new
home what's included in the price? No that's that's a fantastic question a
lot of the customers that I'm talking to that's the the biggest thing they want
to know is there's a starting price there's an advertised price but what
does it really come down to when everything that you want included in the
home is added up and every builder every presentation center might be a little
bit different too depending on what they include as standard specifications is
hardwood included, is is your countertop upgrades is that included as well,
are legal fees included? So a lot of the times these are the questions that you
want to be asking of what are the standard specifications and potentially
what are the costs of some of the upgrades that you may want to add into
the home so again it just depends on builder to builder, presentation center
to presentation center everyone might be a little bit different okay so
What would be kind of like your advice when someone is looking on the purchase
price of a home what kind of things that should they be looking at? Absolutely
especially if you're if you're going through a show home parade a lot of the
show homes look beautiful they're really spruced up to sell a dream right
a lot of the times those show homes are selling a dream that are significantly
upgraded above and beyond what the standard purchase price is so finding
that out sometimes doing a walkthrough with the sales associate or the
community manager to figure out okay what's what is included what standard
and what are some of the generic costs upgraded in each of those presentation
centers just to maybe give you a little bit more
idea can you give examples I want 100% the the show home parades that that
we're presenting are typically upgraded with a really nice countertops we've
done some possibly some structural upgrades like if we've upgraded to a
special shower or if we've added a third bedroom option in the upstairs or after
floor laundry some of those structural options may be an additional cost that
aren't noted in that base purchase price. Now are some of the show homes to
some of those homes actually have a like what you'll get in this home is what
you'll get a lot of them will a lot of them you can find breakdowns in
typically the kitchens a lot of them will have what is upgraded in the home
so at least it'll give you an idea of what kind of dream is being presented or
what upgrades are added enough yeah now I know we'll probably cover upgrades in
another episode but if you can give me like a really high overview so what are
some additional cost that we may encounter for upgrades at closing so
you mean an additional costs that you can encounter yes it's a closing so most
upgrades aren't added at closing usually that's done prior to even
things like if you're upgrading appliances last minute or landscaping
last minute those are typically done in advance of your closing appointment
things to keep note of that may be additional would be things like the
legal fees are those included with the purchase price are there any
disbursement fees so again lawyers may charge an additional cost to do the
transfer of money from you was a buyer to the the lawyer who's representing the
company a lot of the times property taxes are due at that time - so your
share of the annual property taxes could be due okay at that point as well
same thing with homeowners association fees if those have been paid for the
year those are little things that again talking with your in the community
manager that sales associate would give you a better idea of what to expect at
the closing appointment okay well there's actually I was doing a little
bit of research and I actually kind of was
looking at a couple other things that I think additional cost that could add up
when you're buying your first home so for example like like you said property
valuation fee there's a home inspection fee - right typically again if it's a
newer build then a lot of the the city inspections they would take care of a
lot of that okay or again if the the lender that you're using specifically
requires an inspection then that might be additional as well so that might be
something to defer to your lender specifically depending on your using
with resale for sure do you want to make sure that you're not buying a complete
lemon so a lot of the times to make sure that everything's fully functional they
will have that additional cost included in that closing fees there's
other things like title insurance insurance costs for high ratio mortgages
interest adjustments those kind of things as well for sure and again I'm
not gonna claim to be a specialist these are definitely conversations to have
with with your lender whether it's your your mortgage specialist at the bank or
or your mortgage broker just because each lender is gonna be a little bit
different a lot of that like mortgage insurance depends on how much of a down
payment you're gonna be putting down as well so some of those things can be
included but it really depends on on the lender so it may be deferred to your
your lending specialist for those there's always one thing I always think
about is are there any hidden costs when you're purchasing in your house so we
talked about upgrades we talked about the base price are there
anything that we might not see that you know that can come up? Yeah absolutely so
the the biggest ones would be at closing right okay because typically you can be
upfront of what the homeowners association fees are for the year if
it's a condo or a townhouse if there's a condo fees associated on a monthly basis
to take care of your landscaping or your maintenance on the exterior as well but
there are those things such as you will need to get homeowners insurance to make
sure that everything is secured financially in your home if anything
negative happens if you do have to pay your property taxes that would be due at
the time closing or even in the case of a
new-build after you move in there sometimes reassessments that the city
does typically when you're at your closing appointment and if you are
paying for your portion of the taxes for the year it's based on on bare land
basically you're paying for the land you're not paying for the house
then the city would come back and do a reassessment because now there's a
house on that land yeah and so later on in the year you see September you get a
letter in the mail saying now they've done a reassessment for the land plus
the building and that's depending on the size of the home that could be a
significant chunk of money that's due up front so being aware of these costs
going into your closing appointment will definitely make it a more enjoyable
closing experience instead of being surprised by maybe some of these
additional costs okay no that's to me that's really important because I I had
no clue that the assessment on the lawn itself yeah rather than just those now
are the reasons both on the lawn and the house? That they would be joined yeah
and again they're the this comes into difference between say bare land or
condo or bare land redistribution there's a couple of I guess kind of
technical somewhat boring differences between them but if you own the land
versus if it's a if the condo board would take care of the land as well but
yeah it's it's a reassessment on the land plus the house as well typically a
last question that might be pretty stupid is I've had a lot of my friends
even ask this and sometimes it came up so much that I have to ask this does the
price of house actually include the basement too it would include the
basement now it depends on does that mean basement development or just the
the square footage in the basement I was thinking square footage of the basement
so if the house did come with the basement but if you had to develop it
it's an additional cost correct yeah so you would pay additionally if you wanted
to develop a basement now there is a big difference between what's marketed in
the square footage of the home okay versus what you actually move into based
on CREB regulations they can't advertise undeveloped or below
grade area in the marketed square footage so basically the grading of the home
is what’s above dirt, basements are below dirt so even if it is a developed basement
that square footage can’t be included in
if you’re putting it on MLS or if if you go in and see a brochure
from a builder that square footage can't be calculated
yeah so again it is included in the purchase it's just not advertised in the marketing
square footage so that is maybe where some of that confusion is coming
so are you saying so if I was buying a house that's 1500 square feet
and the basement was an additional 200 square feet it would only say 15 hundred square feet
100% even though the total square footage of the house would be 1,700
so hey thanks very much that was actually really informative about the
basement because I had no clue about the upper and the lower there right so
anyway that's it for today thank you very much and we'll catch you next time
that's another edition of Homebuyer's School tune in next time for more expert
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