You’ve finally signed the down payment cheque to buy your dream house – mission accomplished, right?
Not so fast. What about lawyer’s fees, land transfer taxes, propertytaxes, home insurance, monthly utilitiesand the cost of a homeinspection? Better not put that cheque book away so fast.
Many homebuyers are so focused on down payment and mortgage costs thatthey don’t even consider all those additional fees that can addthousands of dollars to the cost of home ownership, says AlyssaRichard, founder and CEO of Toronto startup MyClosingCosts. Trying tofind estimates online for all of those fees can be as frustrating andtime consuming as hunting for the perfect house in the first place, shesays.
“I came across a Web site in the states that does this in the U.S. andI was like wow, really cool site. But nothing (like it) existed inCanada,” says Richard.
So she recently launched myclosingcosts.ca as an online calculator forall the fees that Canadian buyers could be hit with when purchasing ahome.
There are already several cost calculators or checklists on the Web tohelp buyers tally various closing fees, including some offered by RoyalLePage Canada and ING Direct Canada. Though Richardshas entered acompetitive online field, “there’s room for more than one place wherethis information exists,” she says.
She also says her site can offer much more detailed cost estimatesbecause users can enter more specific data than on competing sites. Onthe Royal LePage site, for example, users can only enter three types ofdata (including one as vague as “miscellaneous costs”) compared with 11types of information on myclosingcosts.ca. And unlike ING’s site,myclosingcosts.ca actually calculates the land transfer tax based onprovince and municipality.
Calculates monthly affordability
“There’s a lot of static (Web) content in Canada like you should budgetone to two per cent for closing costs,” Richard says. “But what doesthat mean and when is it going to come out (of your bank account)? Thatcould be $500 or $5,000. It’s important. We want to tell people yourproperty taxes will be this (amount) because you live here (in acertain neighbourhood).”
The site doesn’t just calculate one-time costs like legal fees. It alsohelps determine if a buyer can afford a home over the long term bycalculating monthly carrying costs like mortgage payments, homeinsurance and monthly debt payments.
Richards plans to add more features to the site, such as the ability toview a list of local home inspectors, real estate lawyers or otherservice providers in a given area. Home buyers would then fill outonline forms to get instant price quotes for those services, or evenbook them directly through the MyClosingCosts site.
Corporate world to kite surfing
Richard took a circuitous but interesting route to foundingMyClosingCosts. After graduating from Queen’s University with acommerce degree and snagging a job at a huge management consulting firmin Toronto, the Kingston, Ont. native realized a corporate office jobjust wasn’t for her.
“A bit of my soul was just dying,” she recalls.
Her wanderlust took her on a two-month jaunt to Maui (“I just becameobsessed with learning how to kite surf,” she explains) where she livedin a hostel “and found myself and just enjoyed life again.” She alsomet a group of entrepreneurs there who mentored and inspired her.
Moving back to Canada with a clear head and a new entrepreneurialdrive, she started working on her idea for RateHub.ca,a mortgagecomparison Web site she officially launched in August 2010. She knewthere was a need for a closing costs site after visitors to RateHub.cacontacted her asking how they could figure out other related fees oncethey’d finished shopping for a mortgage. She pitched her concept forMyClosingCosts at Startup Weekend Toronto inNovember.
Richard still hasn’t gone back to a day job. She’s working full-time onMyClosingCosts and RateHub, the latter of which now has five full-timestaff including her brother Chris, who’s chief technology officer. Shesays bootstrapping both startups is definitely a moremeager lifestylethan going back to work for big money in Toronto’s corporate epicentre.But the opportunity to create a more open-ended, adventurous life isexactly what drives her to stay entrepreneurial.
“I just wasn’t happy in the corporate world. I loved school but when Igraduated to get a job I just wasn’t happy. It’s also about flexibilityand freedom…I want to build a sustainable business that gives meflexibility and we’ll see what happens.”