Know all the unexpected expenses when buying a property

January 10, 2024 Noeurbdok168

Buying a property is usually one of the main goals in life for many people. However, for this decision to be made wisely and assertively, the buyer needs to carry out good financial planning. After all, acquiring a property is not a simple or cheap process.

When investing in a house or apartment, it is important that you know all the expenses you will have to pay to complete the acquisition. This way, you will be able to avoid financial problems that could lead to future debts and even the loss of your property.

In this article, you will learn about the main costs when buying a property to optimize your financial planning. Good reading!

What are the main expenses when buying a property?

Contrary to popular belief, buying a property involves more expenses than just its price. Therefore, many expenses may end up being disregarded when planning the acquisition, which negatively impacts the buyer’s financial life.

To avoid these organizational problems, try to understand what all the costs you will have when buying a property are. This way, you can have more arguments when negotiating payment terms and avoid being caught off guard by unexpected expenses.

Check out the main expenses when buying a property!

Real Estate Transfer Tax (ITBI)

ITBI is a municipal tax that the buyer needs to pay for the property deed to be drawn up. It is charged on the acquisition of houses, apartments or properties that are still on the plan.

Furthermore, it is worth finding out about the conditions of this type of tax in your region. This check is necessary because the rate varies depending on the municipality. It can be calculated based on two types of values, which are:

market value : the purchase and sale value of an asset, stipulated by the Public Authorities;
transaction value : real value at which the property was sold.

Public deed

The public deed is the document responsible for legally validating the negotiation carried out between the buyer and seller of a property. To carry it out, both parties involved in the transaction must formalize the agreement at the property registry office in the city where it is located.

This document is only requested for those who purchase the property in cash. In cases where the acquisition is made through financing, the contract issued by the creditor financial institution is equivalent to the deed.

It is important to know that the cost and rules of the deed vary between states. However, unlike ITBI, values usually follow different ranges, depending on the price of the property. Here, it is worth researching the current table in your region.

Record

Proving who owns the property before the law occurs through property registration. In the same way as the other expenses seen so far, their value also varies between states and the purchase and sale price of the property. On average, registration usually costs 1% of the price of the house or apartment.

Broker commission

If you are buying a property through a real estate agency, be aware of the broker’s commission. It may already be included in the purchase price, but it may only appear at the time of signing the contract.

For this reason, try to find out about this cost before closing the deal. This commission is usually between 6% and 8% of the value of the property, making it a relevant expense for the buyer’s pocket.

However, these commissions can be negotiated in some cases. If the broker is independent, for example, there is a greater possibility of making this percentage more flexible.

Correction of financing installments

Anyone who chooses to buy a property through financing needs to be aware of the possibility of correction of installments, especially if they have purchased the property off the plan. While the buyer does not get the keys, the first installments are paid to the construction company and readjusted according to the National Construction Cost Index (INCC).

However, after construction is completed, if the buyer opts for an installment plan, the financing will be paid to the bank. Then, it will be readjusted by the General Price Index — Market (IGP-M).

This change in the index used as the payment basis may result in an increase in the price of the installments. Therefore, it is risky to start financing with limited money and paying installments that are at the limit of your budget. It is recommended to always consider possible corrections when making your purchase planning.

Property inspection

The inspection applies to both the purchase of a used and new property. It focuses on evaluating the conditions of the house or apartment, identifying possible infrastructure problems. Therefore, the inspection is carried out before signing the receipt with the construction company.

Furthermore, it is essential to have a positive inspection report to obtain financing. In this way, the property will be used as collateral for granting credit.

The cost of inspecting a property varies depending on the institution responsible for carrying it out. Therefore, it is worth doing some research to choose the best alternative for your budget.

Negative certificates

To ensure that you are not purchasing a property that will carry the former owner’s debts or lawsuits, it is crucial to issue their and your spouse’s negative certificate, if any. In general, this cost is the responsibility of the seller, but ends up being passed on to the buyer.

Moving expenses

One factor that cannot be forgotten when purchasing a property is moving expenses. After all, this is a laborious process that involves good logistics, available time and people willing to carry out the manual work.

The buyer rarely has the means available to make a change independently. For this reason, it is common to need to resort to outsourced services as a solution.

Among the main expenses that may arise in the change process are:

shipping: it may be necessary to hire a trailer service to transport large furniture and appliances from one location to another;
furniture assembler: if the person wants to transfer wardrobes and other large furniture to their new home, it may need to be dismantled for transport;
labor: in many cases, it is possible to hire specialized professionals to pack and unpack the resident’s belongings, helping the move to happen more quickly and organized;
electricians: some items, such as air conditioning, require electrical installation when moving.

Maintenance and possible renovations

Regardless of whether the property will be purchased off-plan or not, it is possible that renovations and maintenance will be necessary to meet the needs of the new residents. When buying your home, you should consider this possibility in your expenses.

Furthermore, there are usually several situations in which a more expensive renovation is required. For example, if you want an apartment that uses an open concept between the living room and kitchen, you will need to knock down one or more walls.