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Home Buying Costs

Since I’m in home buying mode, I will share with you some expenses involved with purchasing a home. A lot of young readers here don’t own homes yet, so this may help with the planning.


In Newfoundland, purchasing a home with a mortgage requires that you pay a “mortgage tax” which works out to be about 1% of your mortgage balance. In other provinces, there is a “Land Transfer Tax” (if you have an existing home to sell). On top of that, you’ll have to pay the lawyer fee which around here works out to be $500 + title search. For me personally, my legal fees for purchasing only will work out to be around $2500.

Survey Costs:

If the home that you are purchasing does not have an updated survey, the lawyer will require that you get one. This should cost around $300 + tax but can sometimes be split between the buyer/seller.

Home Inspector:

A home inspector is essential when purchasing a home, especially if it’s an older home. These will cost you around $300 + tax, but worth it in my opinion.

Real Estate Agent:

A buyers real estate agent “should” be free of charge. They get their paid by splitting the vendor agents 5% – 6% commission.

Moving Costs:

This cost can vary as it depends on your circumstance. If you move a long distance, then a mover can cost a pretty penny (cost depends on distance). For a local move around here, they charge around $80-120 / hour. To save a few dollars, you may decide rent a U-Haul and move everything yourself.


If appliances do not come with the home that you are purchasing, you’ll have to go out on your own and find some. The best bet is to shop around and compare prices. When looking for the best deal, make sure to read over their warranty and their cost of shipping the items. Another thing, make sure that they insure their movers so that you are covered in case they damage your floors while moving the appliances.

Fridge: $550-$3,000
Range: $450-$2,000
Microwave: $50-$650 (over the range)
Dishwasher: $250-$1,700


If this is your first home, you may have to purchase all of your furniture. May I suggest though that instead of purchasing everything all at once, purchase things over a span of time. When we purchased our first home, we purchased our bed and bed frame,TV,dining room table, washer/dryer, sofa/love seat all at one time ($6500 – all new).

As time passed, we purchased window coverings, coffee table/end tables, lamps, receiver, and speakers. To this day, we still don’t have a bedroom set. :) If you are diligent, you can find some good used stuff in the newspaper and during moving sales.

Final Thoughts:

As you can see, it’s not cheap to purchase a home, but it’s well worth it if it’s a good move for you and your family. Remember, cash is king. If you are planning on moving in the near future, save some cash to avoid purchasing everything on credit.

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FT About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 24 comments… add one }
  • Avatar The Financial Blogger June 28, 2007, 8:03 am

    In Quebec, we have what we call a “Welcome Tax” which is about 2K or more depending on the price of the house. I don’t need to feel “welcome” like that in my new neighborhood!

    On another note, I don’t know if having an inspection done really worth it. I had bought 2 properties so far and I had the impression to pay $500 each time for being told that the basement has a 2% inclination of on the right side…Does it really matter?


  • Avatar AJ-IAmFacingMillions.com June 28, 2007, 8:17 am

    Very interesting article, thanks. I’m in the process of buying a house right now in the U.S. and have had to sort of learn most of these same things you are sharing here on my own.

  • Avatar Jerry Hung June 28, 2007, 10:13 am

    I agree on the “getting furnitures slowly” part completely, and look around online/newspaper too
    I have got tons of used furnitures at great price (some good, some bad), from Kijiji, newsgroup, Craig’s List, etc.. and of course IKEA

    I don’t know if “Home Insurance” should be considered a “Home Buying Cost” though, as it’s kinda yearly, but you gotta have it

    or “Status Certificate”, which I am uncertain whether it’s only applicable for “condos” or freeholds as well

  • Avatar FrugalTrader June 28, 2007, 10:20 am

    Good idea about the news groups to look for used furniture. Question, what are “status certificates”?

  • Avatar guinness416 June 28, 2007, 10:35 am

    The CMHC website has an excellent and thorough list of these expenses.

  • Avatar guinness416 June 28, 2007, 10:40 am

    Well that didn’t go very well, did it? Here’s the link:

  • Avatar Mr. Cheap June 28, 2007, 11:14 am

    I had the idea that I could save 2.5-3% of the purchase price by going directly to the selling agent and getting them to drop their commission.

    The thinking was, they obviously want to sell the house and get their commission, if they’re willing to give half to the buyer’s agent, they should be willing to give half to me to get the deal done.

    Unfortunately real estate agents are greedy in a dumb way, and supposedly their perspective (according to a more knowledgable friend) is that buyers who show up without agents are ignorant and “ripe for the plucking”.

    So get a buyers agent (just don’t be so foolish as to sign an exclusive agreement). If they aren’t there, you’re not going to get their cut, so you might as well use them.

  • Avatar FourPillars June 28, 2007, 11:31 am

    The agents I’ve worked with won’t do anything without an exclusive agreement. Unless they are desperate, why would they?

  • Avatar FrugalTrader June 28, 2007, 11:38 am

    My real estate agent is a buddy of mine, so I didn’t sign any agreements with him. However, the agent I used before him required an agreement.

    Mr. Cheap, I think it really depends on the agent. If you buy/sell through the same agent, and the 2.5% difference makes or breaks the deal.. then i’m sure that some agents could be convinced.

  • Avatar guinness416 June 28, 2007, 11:42 am

    That depends where you live too. I already own a house, but my friends who are trying to purchase in Toronto at the moment are all in multiple-bidder situations (and usually, losin in them!). The sellers agent would frankly, laugh his/her arse off at a suggestion to reduce commission.

  • Avatar FrugalTrader June 28, 2007, 11:46 am

    Yes, I guess it depends on the market that you are in. In that scenario, it would make sense to have your own Buyers Agent b/c it’s free. :)

  • Avatar ThickenMyWallet June 28, 2007, 11:53 am

    Good summary. In Ontario, there is a land transfer tax refund of up to $2,000 (depending on the value of the home) for first time home purchasers.

    Factor in title insurance which most mortgage companies require you to obtain as a condition of funding. The cost of title insurance is pegged at the value of the home. A $250K condo in Toronto has title insurance costs of approx. $250.00

  • Avatar ThickenMyWallet June 28, 2007, 11:59 am

    A status certificate is obtained if you are purchasing a condo. It is a status of the condo corporation and lists items like the finances of the condo corporation, whether the condo corporation is subject to a law suit etc. etc.

    You usually make a conditional offer on a condo subject to obtaining and reviewing the status certificate. This is how you find out how well the condo corp. is managed financially.

  • Avatar nobleea June 28, 2007, 12:51 pm

    There is currently no land transfer tax in AB. Though some have suggested it as a way to cut off some of the speculating and flipping that is occuring.
    I think for new or nearly-new houses and condos, a home inspection is a waste. As long as the house is covered under the new home warranty still, you should be safe.

    Another thing to add to home buying costs, which only really applies to new construction, is window coverings. Unless you want to live with sheets taped over your windows for 6 month, best to budget for some blinds right off the bat. These could be home depot specials for 150$ a window, or custom made hunter blinds and valances for 1000$ a window. Just keep in mind if you cheap out at the start, you’ll probably end up replacing it shortly due to stuff breaking or it just looking like crap.

  • Avatar Mr. Cheap June 28, 2007, 1:26 pm

    Mike: They talk tough, but if you basically say you’re going with someone else if they insist, they’ll work with you without a signed buyers agreement (this is different then a contract with a SELLING agent, obviously they’d want a signed contract there).

    G416: Again they’d be dumb then. If I had a bunch of offers to present, and they all had buyers agents except one, I’d definitely want the sellers to accept the offer without a buyer’s agent! Even if I had to drop my commission to get it through (I’d rather get 3.5% of a sale then 2.5%).

    FT: Yes, I agree, but its unfortunately not a given… its only at the 11th hour where its make-or-break that a commission reduction comes into play. It’d be nice if it was standard operating procedure (“oh, you don’t have a buyer’s agent? I’ll reduce my commission to 3.5% then”).

  • Avatar Kevin June 28, 2007, 4:30 pm

    The thing to remember about real estate is that you don’t actually need an agent, but you do need a lawyer.

    A buyer may purchase a home without a buyers agent. In that case the ignorant buyer may end up paying the sellers’ agent both commissions (via a more expensive house). However, a knowledgeable buyer can submit an offer where the seller still nets the same amount but the house price is lowered by buyer’s commission amount.

    listed price = $100k.
    Normally both agents might get $3.5k. Seller nets $93k.
    Buyer without an agent submits an offer-to-purchase for $96.5 and in the offer states he is representing himself and the seller agent will get 0 commission for the buy side. The seller still nets approximately same amount.

    The selling agent has a fiduciary obligation to act in the best interest of his client. If it is the best offer then the agent should not impede the sale (although I am a realist and know it happens).

    The offer-to-purchase is quite a generic fill-in-the-blanks document. You need a lawyer anyway, so why not get her to help you fill it out? You may end up paying the lawyer a bit extra but likely less than the commission a realtor would get.

  • Avatar FrugalTrader June 28, 2007, 4:38 pm

    Great comment Kevin, have you actually done this? Where do you state that your representing yourself in the offer to purchase? I guess the lawyer can help you with that?

  • Avatar The Financial Blogger June 28, 2007, 9:19 pm

    Kevin, by doing so, do you have to count your 3,5K as a commission revenue? do you have to declare it as an income for representing yourself ?
    Thx for the tips !

  • Avatar Kevin June 29, 2007, 3:20 pm

    FB: Unless you are actually getting money back in the form of commission, then it is not income. What I am suggesting is buying at a lower price (in a way that the seller still nets the same amount). However, when you sell it would add to your capital gain – that’s not an issue if the house is your primary residence.

    FT: Yes, I have represented myself. Legislation varies so it’s best to get advice from a lawyer in your area.

  • Avatar Kevin June 29, 2007, 3:34 pm

    Know your rights as a consumer, i.e., you don’t need an agent in order to buy nor sell a house.

    However, an agent can be useful:
    1) in order to market your home (listing on MLS, open houses, etc),
    2) deal with the paperwork, followup, etc (e.g., if it’s a conditional sale then the agent can deal with the home inspectors/ appraisers so you don’t have to leave work to open the house to the inspection)
    3) buying a house in a city you are unfamiliar with (the agent can drive you around showing you neighborhoods, houses, etc). Also, since they have realtime access to MLS they get notice of listed properties before the public (i.e., there is a lag before it appears on http://www.mls.ca)
    4) determining an accurate and current market value price of a property. Agents have easy access to MLS so they can see the history of a house, recent sale prices in an area, etc.

    disclaimer; I am neither a lawyer nor realtor. I have moved numerous times across various provinces.

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