Selecting the right real-estate team to represent your purchase or sale of commercial or residential property is crucial to ensure your interests are protected through the whole sale process.
Once you have your team in place, there are additional issues and expenses you ought to consider when buying or selling a home. Here is a list of some:
A real estate commission is normally payable to the Seller’s realtor. The Seller has signed a Listing Agreement with that realtor and has agreed to pay the commissions. The Seller’s Realtor enters into an agreement with the Buyer’s Realtor, agreeing to pay half of the commissions received to the Buyer’s Realtor.
In the Calgary area standard real estate commissions are 7% on the first $100,000.00 of the purchase price and 3% on the balance of the purchase price. Those commissions attract GST so be prepared for that as well.
An inspection by a qualified professional inspector may cost you $500.00 but the expense is small in relation to the investment. The decision to hire an inspector is a good one given that you’ll have some assurance that the property you are considering is sound or that you know up front the costs and expenses you will incur to make it so.
When you sell a home you must provide to the Buyer a Real Property Report with evidence that the municipality has stated that the improvements which are located on that property comply with all municipal bylaws. A Real Property Report is prepared by a licenced surveyor at a cost to the homeowner of approximately $500.00. The municipality will then review that Report and, if they find that the property complies with all municipal bylaws, issue a Compliance Certificate at a cost of approximately $100.00.
If the Seller has made no changes to the property, built no garages, fences or other improvements, the Real Property Report the Seller received when he or she purchased the property will likely suffice. If the Seller has made changes or if they cannot locate their Real Property Report or if it is not readable, the Seller has an obligation to obtain and provide a new Real Property Report to the Buyer.
Changes to the property which are not completed in accordance with municipal bylaws may result in extra charges. A building which is too large, too tall or too close to adjoining lands may require an application for a Development Agreement, an Encroachment Agreement or a Relaxation. Prior to listing the Seller’s property for sale the Seller should talk to the lawyers at Taylor Conway about the existing Real Property Report.
The Buyer’s mortgagee (lender) will require that the Buyer has property insurance in effect on the Closing Date. Condominium Buyers do not need insurance on their Condominium Units but they ought to have insurance on their possessions which will be in the Unit. Budget $500.00 to $1500.00 for insurance annually.
Taylor Conway can give you a quote for legal fees and disbursements. Fees are determined by the size and the complexity of the transaction. For an immediate telephone quote call Julie at (403) 259-4151.
Mortgage Application Fees
The Buyer’s preferred mortgagee may charge an application fee. Generally, those fees are under $500.00 but the Buyer must check with its lender to confirm the actual amount.
Mortgage Insurance Fees
Mortgage Insurance Fees (often referred to as “CMHC Fees”) are charged to the Buyer/mortgagor depending upon the size of the down payment. If the Buyer borrows more than 80% of the value of home being purchased the charge will be .5% to 3% of the amount of the mortgage. That amount will be deducted from the mortgage proceeds by the mortgagee.
On the Closing Date certain of the Seller’s prepaid accounts are assumed by the Buyer. For instance, if the Seller has paid the annual property taxes and is selling the home prior to the end of the calendar year, the Buyer will be responsible to repay the Seller for the unused portion of those property taxes. Adjustments are generally made to property taxes, condominium fees and community fees.
Often a Seller’s mortgage lender will charge a prepayment fee for an early payout of a closed mortgage. As these charges may be able to be avoided in whole or in part, the Seller should consult with the lawyers at Taylor Conway prior to listing their property.
We at Taylor Conway would be pleased to discuss these and all other aspects of your real estate transaction with you. Give us a call or email using the form below.