There are several items that need to be attended to prior to closing a real estate transaction. There are items imposed by the government, items lending institution may require as well as items to ensure clear title to the home or condo that you buy. As a guideline budget about 2 to 2.5% of the purchase price to cover these items. While costs will vary depending on the situation, some typical costs are outlined here for you.

SURVEY

IS A SURVEY NECESSARY 

Title Insurance often replaces the need for a survey in closing a sale, but a survey is a valuable element in a real estate transaction.  The cost of a survey varies greatly with individual circumstances. The type of survey, size and complexity of the property, location, terrain, etc. are all factors. An Ontario Land Surveyor is the only person who can help you determine the appropriate survey for your needs and provide an estimate of its cost.  (Approximate cost: $1000 - $1500)

TITLE INSURANCE

PROTECTION WITHOUT A SURVEY

A title insurance policy can eliminate the requirement for a new survey. Title insurance is an insured statement of the condition of title or ownership of real property, at the time the policy is issued. Cost varies. (Approximate cost: $250 to $350.)

LAND TRANSFER TAX

PAYABLE ON ALL PURCHASES

The Land Transfer Tax is calculated on the purchase price of a home according to a specific formula. In Ontario the formula to calculate the Land Transfer Tax is as follows:

Up to$55,000 X .5 % of total property value
From $55,000 to $250,000 X 1 % of total property value
From $250,000 to $400,000 X 1.5 % of total property value
From $400,000 up X 2 % of total property value

Use the calculator below to estimate the amount of land transfer tax you will have to pay.  Land transfer tax is applied on the sale price only.

LEGAL FEES

NECESSARY AND VALUABLE 

Legal fees will vary according to the lawyer and the situation.  Plan for this necessary and valuable expense.  (Approximate cost: $600 to $1200.)  If you don't have a lawyer, I can supply you with the names of several who my clients have used and recommend.

DISBURSEMENTS

COVERING THE SERVICES & PAPERWORK

STATEMENT OF ADJUSTMENT

BUYER AND SELLER SETTLEMENT

The buyer and the seller are each responsible for their share of taxes, fuel, and utilities at closing. These costs will be reflected in the statement of adjustments which the lawyer puts together. This cost varies depending on type of property (condo vs. freehold) and timing.

HOME INSURANCE

YOU NEED INSURANCE ON CLOSING

As a Buyer you are responsible or insurance on the property on the day of closing.  Even if the deal doesn't close until late in the day you basically need insurance coverage at 12:00am the day of closing.  Home insurance premiums will vary from one insurance company to another and according to your insurance needs. Consult with your insurance company.

STATUS CERTIFICATE

CONDO REQUIREMENT

Prior to buying a condo, you should request a Status Certificate. This document provides details on the Condo Bylaws, Rules and Regulations, as well as Finances. Any restrictions are also detailed in the Status Certificate. Most importantly, it includes information on the condo's Reserve Fund, which is the amount the condo corporation has set aside to cover unexpected expenses. The Status Certificate is usually paid for by the seller. Approximate cost: $100.

CMHA

INSURANCE PREMIUM

The calculator below will help you to determine the Canada Mortgage and Housing Corporation premium for various levels of home down payment. Please note that you don't have to pay a premium if you put at least 25% of the purchase price as a down payment. The premium for anything less than 25% down increases as the amount of down payment decreases. The premium amount can be added to your mortgage and amortized over the term of the mortgage Note: PST is due the date of closing and is not rolled into a mortgage.

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