Budgeting for a new home can be tricky. Not only are there mortgage installments and the down payment to consider, there are a host of other—sometimes unexpected—expenses to add to the equation. The last thing you want is to be caught financially unprepared, blindsided by taxes and other hidden costs on closing day.

These expenses vary: some of them are one-time costs, while others will take the form of monthly or yearly installments. Some may not even apply to your particular case. But it’s best to educate yourself about all the possibilities, so you will be prepared for any situation, armed with the knowledge to budget accordingly for your move. Use the following list to determine which costs will apply to your situation prior to structuring your budget:

1. Purchase offer deposit.

2. Inspection by certified building inspector.

3. Appraisal fee:
Your lending institution may request an appraisal of the property. The cost of this appraisal is your responsibility.

4. Survey fee:
If the home you’re purchasing is a resale (as opposed to a newly built home), your lending institution may request an updated property survey. The cost for this survey will be your responsibility and will range from $700 to $1000.

5. Mortgage application at your lending institution.

6. 7% GST:
this fee applies to newly built homes only, or existing homes that have recently undergone extensive renovations.

7. Legal fees:
A lawyer should be involved in every real estate transaction to review all paperwork. Experience and rates offered by lawyers range quite a bit, so shop around before you hire.

8. Homeowner’s insurance:
Your home will serve as security against your loan for your financial institution. You will be required to buy insurance in an amount equal to or greater than the mortgage loan.

9. Land transfer (purchase) tax:
This tax applies in any situation in which a property changes owners and can vary greatly.

10. Moving expenses.

11. Service charges:
Any utilities you arrange for at your new home, such as cable or telephone, may come with an installation fee.

12. Interest adjustments.

13. Renovation of new home:
In order to “make it their own,” many new homeowners like to paint or invest in other renovations prior to or upon moving in to their new home. If this is your plan, budget accordingly.

14. Maintenance fees:
If you are moving to a new condominium, you will likely be charged a monthly condo fee which covers the costs of common area maintenance.

July housing sales approach record as summer market begins to boilVancouver, B.C. August 2, 2007 –

The Real Estate Board of Greater Vancouver (REBGV) reports that total residential sales reached 3,873 units in July 2007, a thermometer-breaking 41.8 per cent increase when compared to 2,732 sales in July 2006 and an increase of 5.0 per cent when compared to 3,687 sales in July 2005. This figure represents the second highest number of sales during the month of July in the Board’s history. The highest number of sales for that month was recorded in June 2003, when 4,023 sales were reported. “At the beginning of the year, most experts predicted a slower market than what we’ve experienced for the past five years in the Greater Vancouver area,” says REBGV president Brian Naphtali. “To date, REALTORS® are reporting the exact opposite as the housing market continues to exceed market forecasts.”

During this period, new listings for detached, attached and apartment properties increased by 12.7 per cent to 4,924 units compared to the 4,370 units listed in July 2006. The total number of active listings increased by 7.6 per cent to 11,215 units when compared to July 2006’s 10,424 units. “We saw a lot of movement this July in the sales of detached and apartment properties in almost every area of our Board. Some of this movement could be the result of the recent increase in interest rates as consumers who are locked into mortgages at a good rate move up in the market,” explains Naphtali. “With the average amount of days a property stays on the market holding steady at a brisk 38 days, consumers should contact their REALTOR® to find out how this will affect the sale or purchase of a home.”

According to Multiple Listings Service® (MLS®) data, sales of apartment properties increased by 40.9 per cent to 1,674 sales in June 2007 compared to 1,188 sales in June 2006. The benchmark price of an apartment property in Greater Vancouver, calculated by the MLSLink® Housing Price Index, is $364,510, up 10.8 per cent from one year ago. Sales of attached properties increased by 39.6 per cent in July 2007 to 716 sales, compared to 513 sales in July 2006. The benchmark price of an attached unit is $448,383, up 10.8 per cent from a year ago. Sales of detached properties increased by 43.8 per cent in July 2007 to 1,483 sales, compared to 1,031 sales in July 2006. The benchmark price of a detached unit is $714,810, up 10.9 per cent from last year.
Bright spots in Greater Vancouver in July 2007 compared to July 2006:
DETACHED:
Richmond up 80.4%..........................175 units sold, up from 97)
West Van/Howe Sound up 88.6%....... (83 units sold, up from 44)
Vancouver East up 72.0%...............(227 units sold, up from 132)
Sunshine Coast up 70.2%...................(80 units sold, up from 47)
Port Coquitlam up 55.0%...................(62 units sold, up from 40)
Burnaby up 47.2%............................(131 units sold, up from 89)
ATTACHED:
Port Moody/Belcarra up 158.8%........ (44 units sold, up from 17)
Port Coquitlam up 125.0%.................(45 units sold, up from 20)
Burnaby up 68.2%........................... (106 units sold, up from 63)
North Vancouver up 39.4%.................(46 units sold, up from 33)
Whistler/Pemberton up 340.0%........... (22 units sold, up from 5)
APARTMENTS:
Port Moody/Belcarra up 152.9%.........(43 units sold, up from 17)
New Wesminster up 69.0%................ (98 units sold, up from 58)
Port Coquitlam up 60.6%...................(53 units sold, up from 33)
Burnaby up 43.6%......................... (237 units sold, up from 165)
Richmond up 52.6%...................... (203 units sold, up from 133)
Vancouver West up 27.9%..............(578 units sold, up from 452)

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Urban planning not to blame for high house prices

Vancouver continues to creep up the list of the world's most unaffordable housing market. Despite the results of a recent international study that now ranks Vancouver 13th on the list of the world's least affordable cities -- up from 15th last year -- this region's brand of growth management can't be blamed as the culprit for high homes prices.

The third annual International Housing Affordability Survey is the work of Demographia, a U.S.-based market research company that regularly reviews housing markets in six major industrialized countries. There is probably some validity to the study that compares median house prices to median incomes, highlighting the fact that a median average home in Greater Vancouver priced at $448,800 requires an income 7.7 times greater than the median Vancouver income.

But there is little validity to Demographia's explanation why housing affordability is a crisis in some markets while others markets are still relatively affordable. Demographia points to smart growth policies and land use zoning as the "satisfactory explanation" that accounts for the differences in affordability between markets. This argument simply does not hold water because it ignores two realities.

It's not surprising that the study took aim at these policies. Demographia bills itself as "pro-choice with respect to urban development." Demographia's founder, American public policy professor Wendell Cox from St. Louis, declares that "people should have the freedom to live and work where and how they like" and he is well known for attacking smart growth initiatives, especially efforts to contain growth with urban growth boundaries.

The first problem with Demographia's conclusion that there is a strong link between more restrictive land use regulations and inflated housing markets is that their analysis of housing prices fails to account for the true costs associated with housing.

There is more to assessing the true cost of housing than simply looking at the selling prices of a home and the mortgage costs.

Research has shown that people who live in compact neighbourhoods where they can walk from their homes to stores, schools, recreation and public transportation have a much lower cost of living -- or more accurately cost of housing -- thanks to their lower transportation costs. In fact, some lenders in the U.S. are now recognizing housing that is "location efficient" and they are offering a type of mortgage that recognizes the savings available to people who live in location efficient communities.

They count these available savings as additional income for people buying homes in location efficient communities, approving a loan for those who might not otherwise qualify for a mortgage or allowing a borrower to secure a larger mortgage than would otherwise be available.

If there are discernable savings in the cost of shelter due to lower transportation costs associated with living in compact neighbourhoods the reverse is also true.

In many places where single-family homes are more affordable, in part because land costs in sprawling suburbs are cheaper than in first-ring compact suburban communities, the transportation costs are much higher.

Transportation costs rank second behind the direct costs of housing as the top household expenditures, topping 20 per cent in most homes today.

These costs must be added to the calculation when assessing housing costs to compare housing affordability. Demographia's study ignores these costs. Therefore, their conclusions attacking the smart growth principle that advocates compact communities within contained urban growth areas is simply faulty.

Restrictive land use policies do place artificial limits on land that can be developed. But in many jurisdictions, like Vancouver, these growth containment policies are accompanied by land use plans that concentrate and encourage growth, especially higher density growth, in strategic areas.

So the supply of developable land in the form "greenfields" might be limited, but zoning regulations that permit compact, dense in-fill growth relieves the impact of regulating the overall land supply in the region. Demographia's analysis ignores this relief valve when they talk about land rationing.

Despite the complaints of long-time residents used to living in large single-family homes on sprawling lots, the City of Vancouver and most of its suburban neighbours have begun to embrace density.

Most decision-makers understand that you can't reject sprawl and constrain density within existing urban centres without severely impacting housing affordability. There's still lots of room to grow in Vancouver's existing urban and suburban centres without sprawling up the Fraser Valley.

This kind of sensible approach to urban planning is preserving our quality of life in Greater Vancouver. It can't be pointed to as the culprit for high home prices.

Bob Ransford is a public affairs consultant with Counterpoint Communications Inc. He is a former real estate developer who specializes in urban land use issues

(prepared by Bob Ransford/ Vancouver Sun)

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