When buying a home, it’s crucial to consider not just the price of the property, but also the closing costs. These costs encompass a range of legal and administrative fees due at the end of the home buying process. Understanding what these costs entail and budgeting for them can make your home purchase smoother and more predictable.
Understanding Closing Costs
Closing costs are one-time fees that include various legal and administrative charges. They typically range from 1.5% to 4% of the home’s purchase price. For a $400,000 home, for example, closing costs could be between $6,000 and $16,000.
Common Closing Costs in Canada
- Home Inspection: This optional step, costing around $300-$600 in Ontario, involves a professional examining the property for any issues.
- Property Appraisal: Ordered by your mortgage lender, this roughly $300-$500 cost is for estimating the market value of the property.
- Property Survey: Costing $1,000-$2,000, a survey details the property’s boundaries and any factors affecting its value.
- Title Insurance: Ranging from $150-$300, title insurance protects against real estate fraud and property defects.
- Property Insurance: Required insurance to protect against disasters, with an average cost in Ontario of around $1,250 per year.
- Mortgage Default Insurance: For down payments less than 20%, this insurance cost is added to your mortgage loan.
- Land Transfer Tax: A percentage of the home’s purchase price, this tax varies by province and municipality. First-time homebuyers may receive rebates.
- GST/HST: Applicable if your home is a new construction, and may already be included in the builder’s sale price.
- Utilities and Condo Fees: Reimbursing the seller for prepaid property taxes, utilities, or condo fees.
- Legal Fees and Disbursements: Varying by case, these fees to your lawyer can range from $400 to $2,500.
- Estoppel Certificate Fee: Up to $100, applicable for condominium or strata unit purchases (except Quebec).
While not all fees may apply to your situation, it’s wise to be aware of them when budgeting for your home purchase.
The Remax Success Realty Advantage
At Remax Success Realty, we understand the complexities of buying a home, including managing closing costs.
Our team is dedicated to guiding you through every step, ensuring you are well-informed and prepared. We invest in our agents, offering them advanced tools and marketing support, which translates to superior service for you.
As the best brokerage in the GTA, we’re committed to your success, whether you’re an aspiring agent or a homebuyer. Trust us to navigate you through the intricacies of real estate with confidence and ease.
