Buying a house is a major step in life, but it is essential to understand the different fees associated with this transaction to avoid any financial surprises. Here is a detailed guide to the main costs to expect when purchasing real estate.
Notary fees, often referred to as “acquisition fees,” are mandatory and generally represent between 7% and 8% of the purchase price for an old property, and about 2% to 3% for a new property. These fees include taxes (transfer duties), notary’s fees, and various contributions for administrative formalities.
2. Guarantee Fees
When you take out a mortgage, the bank requires collateral to protect itself in case of non-payment. This can be a mortgage, a bank guarantee, or a surety company. Guarantee fees usually range between 1% and 2% of the loan amount.
3. Application Fees
Banks charge application fees for processing your mortgage application. These fees can vary between 560 USD and 1 680 USD, depending on the financial institution and the complexity of your application.
4. Brokerage Fees
If you use a mortgage broker to find the best financing offer, brokerage fees may apply. These fees typically range between 1% and 2% of the loan amount, although some brokers may be compensated directly by partner banks.
5. Real Estate Agency Fees
If you purchase a property through a real estate agency, agency fees will be added to the total cost. These fees typically range between 3% and 8% of the sale price, depending on the agency’s policy and the type of real estate involved.
6. Moving Costs
Moving incurs significant costs, including truck rental, hiring professional movers, and potential expenses for boxes and packing materials. Budget several hundred to several thousand euros, depending on the distance and amount of items to be transported.
7. Renovation and Furnishing Costs
When purchasing a property, renovation or remodeling work may be necessary. Establish a budget for repairs, upgrades, and purchasing new furniture or equipment. These costs can vary significantly depending on the condition of the property and your personal preferences.
8. Property Tax and Condominium Fees
Property tax is an annual charge that every property owner must pay. Its amount varies depending on the location and the value of the property. Additionally, if you purchase a condominium apartment, there are monthly or quarterly condominium fees to cover the maintenance of common areas and collective services.
9. Borrower’s Insurance
Borrower’s insurance is often required by banks to cover risks such as death, disability, or job loss. The cost of this insurance depends on your age, health condition, and the amount borrowed. It can range between 0.1% and 0.6% of the borrowed capital per year.
Conclusion
Buying a house involves many additional costs beyond the initial purchase price. By being well-informed and planning for these expenses, you can approach your real estate project with peace of mind and avoid financial surprises. Make sure to budget adequately to cover all these costs to ensure a successful real estate purchase under the best conditions.
