Typical Real Estate Closing Costs

Typical Real Estate Closing Costs

 Today, it is possible to buy a home with no money down however, everyone who buys any form of real estate will have some other costs to consider. Closing costs vary by jurisdiction and transaction but the following chart will give you an idea of expenses to be considered:

Deposit:  Usually submitted upon acceptance of an Offer to Purchase. The deposit is usually held in trust by the Listing Brokerage and it forms part of the down payment on the closing date. Typically ranges from $1,000 to 5% of the purchase price

Septic Inspection Report:  Approximately $250.00

Legal Fees & Expenses:  Varies but normally $900 to $1300 for legal fees and disbursements.

Land Transfer Tax:  This is a provincial tax levied when title to land is transferred. It is payable by the Purchaser upon the registration of every transfer of land. (i.e. on closing day) The calculation of this tax on a single family home in Ontario is as follows:

Purchase Price Calculation of LTT
0 – 55,000 .005 x Amount
55,001 – 250,000 (.01 x Amount) minus 275
250,001 – 400,000 (.015 x Amount) minus 1,525
400,000 + (.02 x Amount) minus 3,525

Home Inspection:  $350-$500 plus HST. Not mandatory, but recommended!

Bank Appraisal Fee:  Usually about $200.00 + HST but the bank may absorb that cost depending on your negotiations

Mortgage Application Fee:  Find out whether or not your lending institution charges to process your mortgage application. In many cases, if you are dealing with a bank that you have other accounts with, they will waive the application fee.

HST:  Typically, resale homes are exempt from HST unless it has been “extensively renovated.” HST is payable on the fees paid to real estate agents, mortgage brokers, appraisers, lawyers fees, etc. A new home is not exempt from HST even if the home is in an individual’s name but may be rebated in part if it will be your principal residence.  HST may be paid by either the builder or the buyer, depending on what is negotiated at the time of purchase.

Survey: $700 and up if necessary

Title Insurance:  Title insurance is an insured statement of the condition of title or ownership of real property, at the time the policy is issued. Approximate cost $200.00 to $350.00 depending on the value of the house and the insurer you choose.

Status Certificate:  $100 and only applies to condominiums

 Tax Adjustment:  Depending on what the Seller has already paid for the year, there will be an adjustment based on the number of days you will own the house in that year.

Mortgage Insurance Premium:  This premium is usually only applicable if you are putting less than 20% of the purchase price as a down payment on a residential home. You have the option of adding the premium to your mortgage and amortizing it over the term of your mortgage. 

Loan-to-Value Ratio Premium
Up to and including 65% 0.60%
Up to and including 75% 0.75%
Up to and including 80% 1.25%
Up to and including 85% 1.80%
Up to and including 90% 2.40%
Up to and including 95% 3.15%
90.01% to 95% – Non-Traditional Down Payment 3.35%

You can find more information at:  http://www.cmhc.ca/en/co/moloin/moloin_005.cfm
Note that PST on the premium is due and payable on the closing date.

Fuel Adjustment:  In the case of oil heat, the Seller may top up the tank on closing and you would be charged that amount.

Homeowners Insurance:  Varies

Moving Costs:  Varies

Service and Utility Connections:  Depends on the service provider but for example. COLLUS in Collingwood requires a $200.00 deposit from new customers.

This summary of closing costs for real estate is a guideline only to assist you but should not be relied upon. For a closer examination of costs it is best to contact each party directly.

Rebates, Credits and Programs to Note:

Using RRSP savings towards a home purchase can be done through the Federal Home Buyers Plan.  For details, visit:  http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html

First time buyers may also be eligible for a Federal Home Buyers Tax Credit.  Learn more details at http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html

In addition, Note that First Time Buyers are eligible for a land transfer tax refund of up to $2,000.  Your lawyer can assist you in applying for the rebate.  Find out more at http://www.fin.gov.on.ca/en/refund/newhome/index.html



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