The following costs are intended to be used as a guideline only and to help prepare you for the additional closing costs associated with buying a property. Every transaction is different so please also discuss specific costs with your lawyer and mortgage specialist. On average, you should budget approximately 2.0% of the purchase price to cover the closing costs outlined below.
1. Legal Fees & Disbursements
You will need a lawyer to close the deal. The flat fee for legal services is approximately $600 - $1000 - depending on the lawyer and the services they offer. In addition to this fee, you will also have disbursement costs for title searching/registering the deed/tax certificates etc. This paperwork will be requisitioned from the City by your lawyer and the cost billed back to you. The approximate costs for disbursements for a normal transaction are $500.
Approximate total for legal fees & disbursements: $1200-$1700. These fees are payable on the day of closing.
2. Land Transfer Tax
The Province of Ontario charges a fee to transfer ownership of a property. For example: Land Transfer Tax on the purchase of a $240,000 home is $2125. I will help you determine the exact LTT when you have purchased your home.
Land Transfer Tax is payable the day of closing through your lawyer.
3. Building Inspection
It is advised that you have a Building Inspection prior to waiving the conditions on the purchase of your home.
The fee for this service is approximately $350 - $500. This fee is payable at the time of the inspection.
4. Mortgage Fees/Financing Costs
Most banks charge an application fee as well as an appraisal fee. Some banks will waive one of these fees if you ask or negotiate with them.
These fees are usually added onto your mortgage.
If you are using CMHC to insure your mortgage, you will have to pay an application fee. If you do not qualify, this fee is refunded to you.
The Premium is added to your mortgage but remember: PST is payable on the Insurance Premium charged by CMHC. This is payable the day of closing through your lawyer.
5. Final Adjustments
Adjustments are any pre-paid or unpaid property taxes or condo fees. Oil fuel left in the oil tank is also adjusted for.
Your lawyer will advise you of the total adjustments prior to closing on a Statement of Adjustments. These costs are payable on the day of closing.
•• If you plan to convert to Natural Gas heating from oil, have your lawyer notify the Vendor's lawyer so the oil tank is not filled prior to closing. Otherwise you will have to pay for the fuel and also pay to have it removed. This could save you hundreds of dollars.