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The true costs of real estate transactions are often hidden

Purchasing a house is naturally an exciting event, and the enthusiasm may prevent Alberta buyers from reading what is typically referred to as the small print. Several expenses are often unanticipated and may put the overall cost of real estate transactions in higher price brackets. Think of home inspections, land transfer taxes, moving services, legal fees and miscellaneous closing costs. If this is not the forever home, those expenses may be excessive.

Amortisation arrangements can make a significant difference to the ultimate price of a property. Mortgage payments spread over the maximum number of years will add substantial amounts of interest. Although there are opportunities to decrease the mortgage term (which typically runs from six to 10 years), not many people realise that they could save thousands of dollars by doing so. To achieve this, the purchaser could opt for a shorter mortgage term and then reduce the term by one year upon every renewal.

Interest rates on mortgages can be negotiated, and understanding how much difference even 1 percent can make is important. If a family has a 25-year mortgage of $525,000 at 4.75 percent, the total interest over the amortisation period will be $367,709. At an interest rate of 5.75 percent, the interest on the same mortgage over the same period would be $90,310 more.

So, although it is only natural to go for the advertised purchase price of a home, it is important to include all the additional expenses when considering real estate transactions in Alberta. Before committing to purchase a particular property, it may be wise to consult with an experienced real estate lawyer. An attorney can provide valuable guidance, support and advice, while also protecting the interests of the purchaser.

Source:, "When buying a home, avoid a House of Cards", Robert R. Brown, Accessed on April 7, 2017

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Lintott Law
2913 Centre St N.W.
Calgary, AB T2E 2V9

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