Real Estate Purchase: Costs to Consider Before Acquiring Your Property

If you are in the process of searching for your next home, it's important to consider the various costs that can be associated with this endeavor.

In this article, we will take a detailed look at the different types of expenses related to real estate purchases, from agency fees to decoration costs, so that you can be better prepared and more confident in your acquisition process.

Costs Associated with Real Estate Purchases

The costs associated with real estate purchases are inevitable expenses for the buyer. These include:

Real Estate Agency Fees in Morocco

Agency fees are an additional cost charged by a real estate agency for its service in finding a property. These fees generally represent 2.5% (excluding VAT) of the purchase price of the property (the seller must also pay 2.5% excluding VAT). Fees can vary from one agency to another. Although these fees may seem high, they often cover administrative expenses, advertising, negotiation, and the time spent by the real estate agent to find a property that meets the client's needs.

Notary Fees in Morocco

These fees are related to drafting and signing the deed of sale and all administrative procedures carried out by the notary. They represent about 7% of the purchase price of the property.

For more details on fees, see our article here.

These fees are due to the notary at the time of signing the final deed for various formalities, such as verifying documents, drafting the deed of sale, and registering it with the competent authorities. It is therefore essential to take these fees into account when estimating the total cost of real estate acquisition.

Guarantee Fees

Guarantee fees are due when you take out a mortgage. These fees are related to the loan guarantee, which may be required by the bank to cover risks associated with the loan repayment. Guarantee fees generally represent about 1% of the borrowed amount and are charged by the guarantee organization or the bank. They can vary depending on the nature of the chosen guarantee (mortgage, surety, etc.) and the amount of the loan. It is therefore important to take these fees into account when comparing mortgage offers.

File Fees

When taking out a mortgage, file fees are a cost to consider. These fees are related to the processing of the mortgage application and generally represent about 1% of the borrowed amount. They are charged by the bank or credit institution to cover the costs associated with reviewing the borrower's file, setting up the credit, and administrative management. File fees can vary between banks and credit institutions, so it is important to take them into account when comparing mortgage offers.

To facilitate your search, Agenz calculators are at your disposal to help you find the most suitable mortgage for your needs and financial situation.

Real Estate Purchase: Ancillary Costs

In addition to the costs related to the real estate purchase, it is important to take into account ancillary costs, which can also represent a budget to anticipate:

Moving Costs

Moving costs mainly depend on the distance and volume of goods to be moved. The greater the distance and volume, the higher the cost. Other factors that can influence moving costs include additional services such as packing and unpacking, handling heavy or fragile items, and insurance.

Renovation Costs

Renovation costs are an important factor to consider when buying a property that requires repairs or improvements. Renovation costs can vary considerably depending on the nature of the work, the size of the property, the materials used, and the professionals hired. It is essential to budget carefully for renovation costs before making a purchase decision, to avoid unpleasant surprises and ensure that the property remains a long-term value source.

Decoration Costs

In addition to renovation costs, it is important to consider the costs of decorating and fitting out the property. Decoration costs include furniture, appliances, floor and wall coverings, and other elements that contribute to personalizing the property. It is essential to plan the budget for these expenses to ensure that the property is ready for immediate and enjoyable use.

Insurance Costs

If you are considering taking out insurance, it is essential to take into account the associated costs, such as insurance premiums, deductibles, coverage limits, etc. These costs can vary depending on the insurance company and the type of coverage you choose. Therefore, it is important to understand the costs and check the available options to choose the coverage that best suits your needs and budget.

Real Estate Purchase: Tips for Reducing Costs

It is possible to reduce the costs associated with real estate purchases by following a few tips:

Negotiate Agency Fees

Real estate agency fees are not regulated and can vary considerably. However, it is possible to negotiate these fees with the real estate agency. It's important to research the fees practiced in your area and know the services offered by the agency. Be clear about the amount you can pay and the services expected in return. Negotiation can take time, and it is important to find an agreement that suits all parties involved.

Compare Mortgage Offers

Comparing mortgage offers helps find the best offer suited to your needs and budget. It's important to consider several factors such as the interest rate, file fees, insurance fees, loan duration, and potential penalties for early repayment. Online comparators, bank websites, and mortgage brokers can help perform a comprehensive comparison of available offers.

Choose a Notary with Reasonable Rates

To avoid paying excessive fees for a notary's services during a real estate transaction, it's important to take the time to choose a notary with reasonable rates. Therefore, it's recommended to compare the rates offered by different notaries before making a choice. Rates can vary significantly from one notary to another, so it's crucial to request detailed quotes to compare costs and services offered. Additionally, it's important to verify the notary's qualifications, experience, and reputation in the community.

In Short :

Buying a house is one of the most important decisions of your life, so it's essential to consider all the costs related to the purchase and ownership of a home. Evaluate all the options available to you carefully and determine what suits you best based on your needs and financial means.

Take the time to carefully examine all the options available to you and remember that the pleasure of being a homeowner is often worth it!

Salima Hamrini Editor and journalist specializing in real estate.

10 Oct 2023