My wife and I recently purchased a new home; and by new, I mean 35 years old. Not ancient by any means, but old enough to be in need of a little TLC. As first-time homebuyers in the way-overheated Canadian real-estate market, we were lucky to even be able to afford this place, but it came with a few expenses we weren’t prepared for.

If you’re planning on buying a resale home, you want to be as prepared as possible upfront for the expenses you’ll be facing. That’s why I put together this list of expenses I’ve had to deal with. You may not need to address everything on this list, and it’s not exhaustive, but hey, it’s better than having to take a week’s worth of cold showers when your faucet craps out, right?

The Other Costs of Buying Your First Home

What, you thought you’d just slap down a down payment, pay the price you agreed and be done with it? Haha, no. Beyond the price you agree to pay for your home, you should also factor in the following closing costs, which you’ll need to pay out of pocket:

• Appraisal Fee: This fee, which is around $250, covers the costing of your mortgage provider assessing what your house is worth. Sometimes your lender will cover this for you, so ask!
• Home Inspection: Anywhere from $250 – $500, depending on who you go with and whether they’re certified or not. WELL WORTH the price of admission. Here’s a tip for you on this one – in the current market, most sellers won’t even consider an offer that has a home inspection as a condition of purchase. That doesn’t mean you can’t have one done though… if you’re serious about the house you’re looking at, take the home inspector with you in civilian clothes and have them give the place a once-over while you view it. That way, you can make an unconditional offer feeling comfortable that you know what you’re getting yourself into.
• Property Survey: This outlines the boundaries of your home and major structural elements, like a driveway, the home size, etc. It also will explain whether any of your neighbours have built a fence on your turf (called an “encroachment”). This one will run you $750 – $1,000.
• Title Insurance: This covers you in the event that someone claims you don’t have the right to live on your property. It proves you are the rightful owner, and for $100, it’s worth it!
• Legal Fees: A qualified lawyer, who will help you complete the purchase process, will run you anywhere from $1,000 to $1,500. Try to keep it below $1,200.
• Land Transfer Tax: You have to pay tax when you agree to buy your home. It’s calculated as a percentage of the home price, and it’s different in each province. The good news is that you can get a rebate on this if you’ve never owned property before. As of the date of this post, the rebate is up to $4,000. Not too shabby!

All told, you’re looking at around $3,000, plus land transfer tax, above and beyond the price of your home. Also, don’t forget that it’s common practice in this market to come prepared with a sizeable deposit when making an offer. The deposit goes right to your down payment when you buy the home, but if you sign a purchase agreement and back out, you’ll lose it. My wife and I didn’t grasp just how important this was until we had to cough up $25,000 of our own money upfront just to seal the deal!!

The last thing I want to mention about additional costs when you’re buying your home is mortgage loan insurance. This is mandatory if you’re putting less than a 20% down payment on your house, and the costs range from 2.8 to 4%, depending on how much of a down payment you’re putting down. You can pay this upfront or, more commonly, add it to your mortgage. More on the subject here.

Once You’ve Settled In

So you got through the craziness of the market and landed your place, congrats! It’s an adrenaline rush for sure, and in my case, more than a little stressful (I’ve never been in a bidding war before). Now that you’ve got the house though, you’re probably thinking about some improvements you’d like to make. Here are the ones we considered, with a breakdown of how much they can set you back:

New Flooring

Depending on what kind of floor you get and how much area you’re looking to cover, costs on this can vary pretty dramatically. If you want hardwood, expect to pay around $4 to $5 per square foot for materials, and another $2 per square foot for installation. Our total cost to lay engineered hardwood in a 1,400-square foot house was around $10,000. Cheaper flooring options like laminate can cut these costs pretty dramatically! Laminate can be had for around $2 to $3 per square foot.

New Windows

This is another expensive reno, but it can have a dramatic impact on your monthly energy bill. Budget around $1,000 per window for good quality windows… oh yeah, and buy good quality windows from a reputable company. You don’t want to try and save a few bucks, only to find that your windows weren’t installed properly and are now leaking air!

Check around on the internet for rebates on window upgrades, because the government offers them from time-to-time, and they can help ease the cost of replacing them.

Appliances

Check to see what, if anything, comes with the house. If you need to buy all-new appliances (washer-dryer, oven, fridge, etc.), this could easily set you back upwards of $4,000!

Furniture

If you’ve never lived on your own before, chances are you’ll need to buy some furniture for your place. New furniture is pretty expensive (a couch, small dinette set and bedroom furniture will cost around $2,000 – $3,000, depending on where you go), but there are some great deals to be had if you buy used. Check out Kijiji for things like chairs, end tables and tv stands. Not mattresses though, that would be nasty.

Moving Expenses

Have you thought about how you’re planning to get all your stuff into your house? At a minimum, you’ll probably need to rent a moving van. If you’ve got friends and family helping you out, you’ll pay around $50 to $100, plus the cost of pizza and beer (a great bribe to get some help)! If you want to hire professional movers, you’ll pay $200 – $500, depending on what you need moved and to where.

Furnace/Air Conditioner/Water Heater

A new furnace and AC will set you back around $4,000 each, while a new water heater will run you $2,000 to $3,000 installed. Consumer Reports has a great buying guide on water heaters, so check it out if you’re in the market.

New Roof

Not all roofs are created equally, and pricing can vary pretty dramatically, but a good estimate for how much it will cost to replace your roof with asphalt shingles is around $5 per square foot. On a 1,500 square-foot house, that’s about $7,500. Roofing isn’t cheap, but you should only need to make this purchase once!

Painting

If you’re planning on applying a fresh coat of paint to your house, know that you need to budget for more than just the paint. Courtesy of a friend and his generous family, I was able to dodge this bullet (and you should try for the same), but if it’s just not in the cards, you’ll need to shell out for the following:

• Paint. And buy enough for two coats. I don’t care how good you are, you will not get a finished product with one coat of paint. You’ll miss spots, work it too thin, and need to revisit anyway, so just plan to apply two coats. And please trust me on this: do NOT skimp on the quality of paint you buy. Buy the very best you can afford. It covers better, is better for your health (go for a paint with no VOCs), and won’t fade over time. Good paint costs around $70 a can, but you can usually find deals up to 50% off. I like Benjamin Moore, but Dulux is great too.
• Paint brushes. Another area where you don’t want to skimp. A quality paint brush holds a great edge, and won’t lose bristles that will stick to the wall and make you redo your job. I personally found this set by Purdy to be exactly what I needed for edging and tight spots.
• Paint trays, roller brushes and handles. Small expenses individually, but together they add up!
• Painter’s tape. Some sites that say you can skip it, but if you’re painting baseboards you’re going to need painter’s tape. I made a hell of a mess trying to skip this step.
• Drop cloths. Unless you have the luxury of painting before you replace your floors, you’re going to need to lay drop cloths to keep from getting paint all over. I prefer canvas, but plastic can work well too.
• Sandpaper, spackling and putty knives. Because you can’t just start painting; you need to make sure your walls are prepped beforehand. Don’t underestimate how much time this takes!

Miscellaneous Household Items

Remember the first time you moved out of your parents’ house, and you only realized you needed a nail-clipper when your nails started getting really long? Yeah… me neither… anyway, point is that this is going to happen more when you buy your first home, even if you were already living on your own. The people at my local Home Depot know me by name, and I’m pretty sure I could single-handedly keep that place in business at the moment. Costs for this category are tough to estimate, but they include things like step-stools, new garbage bins, basic tools, etc. You get the picture.

Utilities & Insurance

Let’s not forget the monthly bills! Beyond your mortgage, you’ll need to shell out for heating, electricity, and water, as well as home insurance. You should also probably consider taking out some life insurance if you’re buying with a significant other. Prices on all of these will depend on your house and usage, but in total, utilities for my house are around $250 per month.

Beautification

Sometimes a house is just in need of some cosmetic sprucing up. Ours, for example, needed new exterior light fixtures (around $75 each). On the inside we wanted to change the vent covers ($20 each), light bulbs ($20 each), switches ($35 each) and door handles ($50 each). This is expensive, and in my opinion should probably wait until you’ve been in your house for six months or so, and have acclimatized to your new budget.

Wrapping it Up

This list may seem long, and it is. It’s not even exhaustive; I left out the cost of other renovations (like the kitchen and bathroom) because I don’t know enough about them. But the goal here isn’t to scare the crap out of you and make you feel like you can’t do this; it’s to prepare you with the information you need to feel confident that you can. The important thing to remember is that buying a home takes planning. If you take care of that upfront, the whole process will be way more enjoyable. And trust me, there’s something special about working hard to transform a place that is truly yours. It’s worth all the effort you put into the process!

Do you have your own home-buying story to share? Want to add to the list? Drop me a line in the comments!