Ben Schmidt

I often get emails and questions asking "what are all the costs associated with doing a transaction?" or "what are the hidden fees you're not telling me about." It seems people are very nervous about the costs of doing real estate. It isn't that complicated and for the most part your Realtor has probably mentioned all of them to you. Often times I see I'll explain the costs, and by the time we're done looking at houses, the information has gone in one ear, and out the other.

Adjusting for property taxes, could be, one of the larger 'hidden fees' you may not be aware of. In New Brunswick, we pay our property taxes in the Spring. End of April is when your property taxes are due, for that calendar year. So you are actually paying the taxes in advance. Lets just say you have a $2000 a year property tax bill and you pay it in April. The taxes would be about $166/month. $666, of that $2000 was money you are paying because you have already lived in your home, but the remainder of the money is paid because it is assumed you will live in the property for the remainder of the year.

So when you, as the buyer come along, and purchase this property and close on October 1 you will actually live in the property for 3 months of the year. On closing you will be expected to pay the previous owner $500 (3 months) of the property taxes that they already paid.

There are many other things that can get adjusted on closing such as, propane, oil, rental income, wood pile, etc.

If you have any questions about adjustments or questions for a Realtor in general give me an email at ben.schmidt@me.com