Lifestyle
Most of us know that buying a home can be very expensive. But what might catch you off guard are the additional expenses that come with the home price.
If you're planning to take out a loan to buy your first home, odds are you've laid out a budget. You've probably also calculated the price you can afford and determined the down payment size that fits your financial picture. But it's important to consider all the other costs that go unmentioned in home-buying discussions so that you don't go beyond your financial limits.
In this article, we will share the hidden expenses that come with buying a home. Keep reading until the end to discover how we can assist you in managing these expenses!
- Real estate agent commission
The first step to buying a home is to look for one! Some folks like to search by driving around and looking for "House for Sale" signs. But sometimes it isn't easy to find what you want. That's when a real estate agent can lend a hand.
What is a real estate agent? A real estate agent acts as the bridge connecting the seller and the buyer. Their job is to facilitate the sale between these two parties in exchange for a predetermined percentage. This is the real estate agent's commission. Usually, this percentage falls between 1% and 2.5% of the house price and is outlined in your agreement with the agent. The bright side is that you can skip paying this commission if you choose not to work with a real estate agent.
- Real estate appraiser fees
Let's say you've finally found your dream home after a long search. Would you buy it right away? Of course not! What if the house is priced above its actual market value? This is where the real estate appraiser steps in. This professional is an expert in determining the market value of properties. They consider various factors, including the building's age, location, house condition, and more.
You're required to involve a real estate appraiser if you want to secure a housing loan from a bank. This protects you from overpaying for a property and the bank from lending more than the property's worth. And while the bank appoints a real estate appraiser, you're responsible for paying the appraisal fee. So, make sure to set aside around 60-100 JOD as payment for the real estate appraiser. And if your loan amount exceeds 100,000 JOD, an appraisal is requested from 2 experts instead of one.
- Home inspection fees
We know you've checked out the house yourself, but sometimes that's not enough. What if you encounter a major issue in the house after you've bought it? At that point, it would be too late to turn back. Even though hiring a professional to inspect the property will cost you some money and isn't mandatory, we recommend you do so. This step could save you a lot of money if issues are found in electrical or water systems, air conditioning, or other areas.
If the inspection uncovers issues with the home, you have a few options. You can negotiate for a lower price, ask the seller to handle the repairs, or search for another house if you prefer not to tackle these problems.
- Mortgage registration fees
As you know, when you take a housing loan from the bank to buy a home, you need to offer the house as collateral. This means that if you can't pay back the loan, the bank has the right to take possession of the house and sell it. And this is where the mortgage registration fee comes in. You need to pay this fee upfront to the Department of Lands and Survey to finalise the home mortgage process.
- Ownership transfer fees
The ownership transfer fee is a sum of money you pay to the Department of Lands and Survey. This fee is necessary to finish the process of transferring the ownership of the house from one person to another. It's when the legal owner of the property officially hands it over to the buyer, sealing the deal and completing the sale.
The amount of the ownership transfer fee is calculated based on the home's value. The homeowner may specify that the buyer covers this fee, or both parties could agree that the homeowner pays it, or they may even decide to split the cost between them.
In addition to the ownership transfer fee of the house, there are also fees for transferring the ownership of the electric and water metres to your name in place of the old owner's name.
- Home report fees
The Department of Lands and Survey will appoint an expert to visit your home and write a report detailing your home's specifications. This process, like others, involves a fee that needs to be paid to the Department of Lands and Survey. The fee is 25 JOD.
- Stamp duty
You'll also need to pay a fee for the stamps on the loan contract between you and the bank. The fee for these stamps is paid at the Ministry of Finance, and it amounts to 0.003 of the loan amount. This is required by the Jordanian stamp duty laws.
- Furniture shipping and installation costs
If you thought your wallet could catch a break, think again! When it's time to move into your new home, your furniture won't make its way there by itself. You'll need to hire movers and installers to help you, and of course, there's a cost associated with their services.
We know all these costs may bring financial stress and affect your budget, making you scared. If you're starting to worry, take a deep breath and keep reading — we're here to help!
At Bank al Etihad, we know that every new home comes with additional costs. That's why we've decided to cover your loan instalments for the first 6 months. This way, you and your finances can catch a break from all the expenses we discussed. You can redirect your finances towards purchasing furniture and electronics, setting up a new kitchen, making repairs and painting rooms, or even investing in cost-saving solar panels.
Ready to buy a house? Apply for a housing loan today and get up to 80% financing and a 20-year repayment period. To learn more, click here.
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