Thursday, June 10, 2010

Home Smarts - From Ottawa's New Homes and Condos Part 3

Marnie Bennett is the exclusive real estate expert columnist for New Homes and Condos. Pick up your FREE copy at news stands and distributors throughout the city of Ottawa. See below for her new column "Home Smarts" and learn everything there is to know about real estate.

Seeing Beyond the Sticker Price: Additional Fees on New Homes
Published in the June 5th, 2010 issue of New Homes and Condos

Most of the homebuyers who walk into my office are savvy enough to know that a new-home sticker price is not the end of the financial story. They expect some additional fees; however, the details of those fees tend to blur together. I like to prepare my clients by outlining these costs in simple terms.

Although most builders absorb the majority of these fees, it is important to have a sense of what they are (as they can make a big difference to your bottom line). Don’t be shy: ask your builder’s representative which costs are included.

Sales Tax
- Many of my clients confess to being confused by Ontario’s new Harmonized Sales Tax (HST), set to begin July 1, 2010. Until this date, 5% GST (but no PST) will continue to be applied to new homes. Afterwards, the HST, which totals 13% of the purchase price, will be applied to new homes. However, new home buyers will receive a rebate of 6% on the first $400,000 of the purchase price. It is important to note that many home builders currently include GST in the price of the home. If HST is included in the price of the home, the government rebate will be payable to the builder, not to you.

Land Transfer Tax
- This provincial tax is applied to both new and resale homes. It’s somewhat of a complex structure and it depends on the value of the land. As an example, a $300,000 home will require a land transfer tax of $2975. First time homebuyers are eligible for a rebate up to $2000.

Utility & Meter Connection
- These usually cost approximately $600.

Municipal Lot & School Levies
- These fees, which cover a wide range of municipal services, are typically absorbed by the builder. However, any new levies that arise before closing may be passed on to you.

Tarion Corporation Warranty Fee
- This mandatory warranty protects homebuyers against construction defects and failure to fulfill terms of the purchasing agreement. This is normally covered by the builder.

Legal fees
- Most lawyers charge between $1000 - 1500 for their services.

Mortgage Processing Fee
- Ask your mortgage institution if they will waive this fee.

Moving costs
- These vary greatly, depending on the number of movers hired, possessions to be moved and distance to be traveled.

Reviewing additional costs isn’t the most exhilarating part of new home hunting. But I can assure you: the better informed you are, the happier you’ll be with your final decision.

Email your questions to mbennett@bennettpros.com
Or for more information on Ottawa Real Estate visit www.bennettpros.com

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Marnie Bennett formed her boutique real estate marketing firm after meeting, with remarkable success, as an award-winning realtor and as Executive Vice-President of a market-leading custom home builder. Bennett & Company provides a full range of services to real estate developers, builders, property managers and investors. Marnie is a broker with Keller Williams Ottawa Realty, and team leader of Bennett Real Estate Pros a top-producing five-star team, providing five-star treatment.

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