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Some hidden costs of buying real estate in Alberta

When buying real estate, there are a number of costs beyond the base sale price that will almost certainly need to be paid, and it is wise to factor these into your plans when you are considering acquiring real estate. These fees can add up, and no one wants to be caught unaware when it comes time to transfer the property.

As a buyer, you will have some forms of closing costs, although they can vary. Many provinces levee a land transfer tax, for instance, although Alberta does not have such a tax. Instead, Alberta collects a property registration fee and a mortgage registration fee. These fees are $50 and $1 per every $5,000 of the mortgage total, respectively.

You may also face adjustment costs, which are costs that were prepaid by the seller. These can include utility bills, lawn care and similar maintenance contracts or property taxes.

Buying a property can mean a number of different kinds of insurance, depending on whether or not you are getting a mortgage to finance the purchase. If you are buying a home through a mortgage and not buying the home outright, you are required by law to have homeowner's insurance. You will also want to consider purchasing title insurance. Purchasing title insurance is not required by law, but it can be well worth the extra several hundred dollars if there is some anomalous issue with the title.

Mortgages may require some kind of setup fee or an appraisal to determine the property's value in order to issue the mortgage. While many lenders no longer charge these fees, some still do. Furthermore, for those who are using a mortgage to purchase with a down payment of less than 20 percent of the total purchase price, you will be required to pay for mortgage default insurance.

It is easy to see that any kind of real estate transaction, whether residential or otherwise, can be loaded with unforeseen costs that may change the whole purchase experience for the unprepared buyer. The guidance of an experienced real estate lawyer can help you fully understand all of the obligations entailed in any real estate deal, helping you find the truly good deals and avoid buying a lemon before it's too late.

Source: Money Sense, "Costs to expect when buying, selling a house," Romana King, accessed Oct. 12, 2016

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