Closing Costs

Closing costs are part of every home purchase and sale. Here are costs you may encounter when buying and some instances selling a home.
Closing costs should not come as a surprise to you when you are purchasing your home, have your REALTOR® explain which closing costs might apply to your real estate transaction. CMHC (Canada Mortgage and Housing Corporation) recommends having 1.5% - 4% of the purchase price of the home ready for closing costs.

Land Transfer Tax

If you are buying a home in Ontario land transfer tax is applicable. This tax is calculated on the price of the home. If you are a first time home buyer you should qualify for a rebate of this tax up to $2000. According to my calculations this means you can purchase up to $227,500.00 before you have to start paying this tax as a first time buyer.
Home Inspections

In some cases you may opt to have a home inspection performed on your home. This is normally at the cost to the Buyer and fees will vary. In my experience the average seems to be $300-$500 depending on the inspector and sometimes the size of the home.

Appraisal Fee
In some cases a lender (bank) may request an appraisal be performed on the home. This is not always the case but if it is a high ratio mortgage or if it is a power of sale it may be the case. Fees for the appraisal will vary as well, normally $100.00 - $300.00

Survey or Title Insurance
A survey is A document that illustrates the property boundaries and measurements, specifies the location of buildings on the property, and indicates any easements or encroachments. This may not be required if Title Insurance is obtained. A survey will cost $1000 - $2000 normally.

If title insurance is obtained instead of a survey it will cost from $325 - $500 depending on the cost of the home.

Home owner's insurance
Insurance is required on a home by lenders if you carry a mortgage with them. If you do not have a mortgage it is obviously still wise to insure your investment. Fees for home insurance will vary normally $500 - $1000 or more annually depending on the property cost, location, possessions and amount of coverage you wish to include.

LEGAL Fees/Disbursements
Lawyers will charge you for their services, registering the deed and any extra disbursements. This will vary amoung lawyer's but $1400-$1600 should be accounted for.

Adjustments will apply if for example a home owner has paid up the property tax, rental items or utilities and you are taking the home before the end of the paid use, you will pay back the remaining time left they have prepaid. Example: Property taxes are $3000 annually and have been paid in full, closing date is October 31st, there would be an adjustment of $500 for taxes.

New Home Warranty Registration
If you are purchasing a new home from registered home builder there will be a fee to enrole the home under TARION warranty. This fee is based on the value of the home and may need to be paid by you. In some cases the builder will pay this fee, Know beforehand. This will normally start at about $700 and go up from there.