To calculate the total cost of a real estate purchase, it is important to take into account all the costs associated with the purchase of the house or apartment. Here is a summary of all the costs associated with buying a home:
Calculation of the total cost of a real estate purchase
Before acquiring a property, it is necessary to calculate the total price of the project. This will allow you to better prepare the financing plan for your real estate purchase and not to quickly go out of budget. This also makes it possible to be able to compare the cost of a purchase against the cost of renting a property of the same type. You will be able to answer more easily the question: “what costs me the cheapest to stay in such type of housing for X years?”
Contrary to popular belief, it is sometimes more financially interesting to rent rather than to buy. Given the current high real estate prices and the risks of falling prices, renting out far more often than you think over buying in 2020. The calculation of all the costs of a real estate purchase therefore makes it possible to choose the most financially interesting option. In addition, if you opt for the option of real estate acquisition, you will have all the essential information to know where you are going.
Price of the purchase of a house or an apartment
As we all know, the price of the goods purchased is the variable which conditions all the related costs. Indeed, the purchase price of your house or your apartment will combine the amount of the commission of the real estate agency, the notary fees, the mortgage fees, etc. It is therefore essential not to overpay for your accommodation and to obtain the lowest possible purchase price.
Suddenly, it is possible to make strong negotiations on the purchase price of a home or simply wait for the prices to be more reasonable. The purchase price of a home is the strongest variable for adjusting the total cost when you buy: a 10% price drop saves you more than 20% on the total cost!
Notary fees for the real estate purchase
Buying new or old will necessarily generate notary fees. They are made up of different elements:
– Taxes and levies, in particular transfer duties
– Stamp Duty
– Registration and management fees
– Consent Fee
Real estate Agency Fees
If you go through a real estate agency for this purchase, you will also have to pay an agency fee. They are set freely by the real estate agent and can therefore vary greatly from one agency to another. Real estate agencies are in strong competition, do not hesitate to take the opportunity to negotiate these fees or choose the one with a mandate with the lowest commission. At SDG Realties, you can always rely on us for effective real estate consultations with the lowest commission. Do contact us!
You can also try to find a property to buy from person to person, although this requires more care. One should not overpay the price of a house or an apartment in order to escape the agent’s commission.
Cost of a Loan for a house
Depending on your personal contribution, you will have a certain amount left to borrow from a bank. The total cost of your mortgage will depend on your contribution, the duration and the interest rate obtained for the same amount of loan.
Mortgage loans in Nigeria attract interest rates from 15% t0 25% per annum excluding fees and other charges. Indeed, the duration of a loan explodes the cost of the loan, especially beyond 15 years. In addition to the cost of the loan interest, you will have to pay the administrative fees (variable depending on the banks and negotiable) and also other guarantee costs. Finally, loan insurance must be taken out with your mortgage. The cost of this loan insurance is quite high.
Additional costs not to be overlooked
An owner must also carry out maintenance and upgrading work, whether in an apartment or for a detached house. It is therefore strongly recommended to plan an annual work budget. Finally, the costs of a renovation in an old property can be very expensive and it is important that you put this into consideration too.
When purchasing real estate, you should also look at these additional costs to pay when you own a house or an apartment compared to a tenant before making your acquisition. Of course, in terms of real estate, the costs are numerous! So remember to integrate all these costs to plan for the purchase of an apartment or a house.