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