When it comes to buying a property in Alberta, one of the first things that come to mind is saving for a down payment. However, even though saving for a down payment is one of the biggest financial hurdles that you need to face while buying a home in Alberta, it's far from the only expense.
Aside from the down payment, there are several closing costs Alberta homeowners need to cover before officially taking ownership of their new properties.
Being financially prepared for these closing costs is extremely important, as it ensures that the final aspects of the home buying process run as smoothly as possible.
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If you're not familiar with the closing costs Alberta home buyers need to cover, we've got you covered. Continue reading to learn more about the closing costs and other expenses associated with buying a home in Alberta.
What are closing costs in Alberta?
Simply put, closing costs are a collection of fees related to purchasing a home in Alberta. Homeowners need to pay the closing costs and the down payment before taking ownership of a property.
How much are closing costs in Alberta on average?
On average, closing costs in the province of Alberta range from 3% to 5% of the total property value.
Here's an example:
If you purchased a home in Alberta for $500,000, you could expect to pay between $16,600 (3% of the property value) to $25,000 (5% of the property value) in closing costs.
Considering that property values are on the rise in Alberta, one can expect to pay significantly more than the figures listed above. With this in mind, it's easy to see why homeowners in Alberta need to be financially prepared to cover their closing costs.
What are some examples of the closing costs when buying a house in Alberta?
As mentioned earlier, closing costs are made up of various fees that need to be paid towards the end of the home-buying process.
Some of the closing costs Alberta homeowners need to pay include the following:
Property inspection fees
Although home inspections aren't required, many real estate experts highly recommend investing in one.
Getting your new home inspected by a professional is highly beneficial, as the inspector will be able to spot hard-to-see issues (structural issues, water damage, etc.) with the home before you take ownership. If the inspector happens to spot any significant or minor issues, you can request that the current owner fix the issues or decide to back out of the purchase.
So even though home inspections aren't legally required, home buyers should consider adding them to their closing costs.
Notary/real estate lawyer fees for buying a house in Alberta
In Alberta, you need to have a notary or real estate lawyer act on your behalf while purchasing a property. This is due to the fact that notaries and real estate lawyers are able to register a legal charge on the property (which, in turn, confirms the new ownership).
The amount that you pay in notary/legal fees will depend on a variety of factors, including the overall difficulty and quantity of the work. That being said, the average real estate lawyer fees in Alberta are between $600 and $1,200 (not including additional taxes and fees).
On a similar note, homeowners also have to pay lawyer fees for selling a house in Alberta; this is something to keep in mind if you intend to sell your home in the near future.
Title insurance fees
One of the lesser-known closing costs Alberta homeowners need to cover is title insurance. For those that don't know, title insurance financially protects home buyers from losses related to fraudulent acts during the closing process.
Some examples of the fraudulent acts covered by title insurance include the following:
- Zoning non-compliance issues
- Forgery and fraud
- Property encroachment issues
- Easements that are revealed after a survey
- Third-party interest in the property
Like property inspections, title insurance isn't legally required, but most real estate experts will tell you it's worth every dollar. Being financially protected from the issues mentioned above can help give you peace of mind and ensures that there aren't any unexpected speed bumps in the remainder of the buying process.
Home insurance
Home insurance is one of the most crucial closing costs that home buyers in Alberta need to cover.
For starters, home insurance in Alberta is highly beneficial, as it can financially protect homeowners from an array of risks and perils (insurance terms for sudden, unforeseen events that can damage a property). This means that if a covered event damages your home, your home insurance company will cover all (or a portion) of the related expenses.
However, this isn't the only reason why home insurance is important. If you need a mortgage for your future home, then your lender will ask you to invest in coverage that meets their requirements. Mortgage lenders require homebuyers to invest in home insurance in order to protect their investment (remember, your lender owns a portion of your property until you've paid off your mortgage).
Because of all of this, it's clear that home insurance isn't just beneficial; it's essential.
If you're having a hard time finding quotes for affordable home insurance in Alberta, consider teaming up with a reputable insurance broker, like one of our experienced advisors at Surex.
Save up to 25% on home insurance in Alberta when you team up with Surex
At Surex, we know how difficult and time-consuming it can be to compare home insurance quotes. That's why we've worked hard to make shopping for insurance easier for you.
Our team of insurance advisors (Surex's title for insurance brokers) works with some of the best home insurance companies in Alberta. Leveraging our close working relationships with top-rated companies allows us to provide policyholders with some of the most competitive insurance quotes in Alberta and the rest of Canada.
Contact your Surex insurance advisor today to get started and to learn how you can save as much as 25% when you bundle your policies with one of our insurance partners.
