Real Estate Closing Costs: What to expect when you're buying or selling a home. Visit to learn more. #realestate

Wondering what hidden costs there might be when buying or selling a home? Here is a detailed list to help you estimate your “closing costs”.  Whether you’re a home buyer or a home seller, be prepared and budget ahead of time. Need a personal or specific estimate? contact us today for a custom proposal.

For Home Sellers

Mortgage-related Costs

Mortgage principal repayment: If you have a mortgage on your property you will be responsible for repaying the outstanding balance at the time of closing. This balance is dependent on your mortgage agreement.

Mortgage repayment penalty: When selling a property at any time that does not coincide with the term agreement, you will most likely owe the lender a penalty for “breaking” the mortgage agreement. If you are re-purchasing after your sale you might be able to get around this if you can “port” your mortgage to the other property. Typically, a penalty payment would be 3 months’ of interest. Check with your mortgage provider for the exact amount.

Mortgage discharge: Many but not all lenders charge a discharge fee, usually ranging from $200 to $300.

Other Costs

Real Estate Brokerage commission: It’s customary in our local market that the home sellers pay for both the seller’s and buyer’s agency fees. Industry rates are non-standardized and regulated by the Competition Bureau of Canada. We charge our home seller 7% on the first 100,000 and 2.5% on the balance, paid at closing based on the selling price.

Lawyer/Notary fees: Although it is legal for a seller to process their own land transfer documents, the majority of home sellers and buyers choose to use a lawyer or notary to prepare legal fees and disbursements for an average cost of $1,000 to $1,200.

Land Title Registration: There is a per transaction registration fee payable for all land transfers to the land title and survey authority. The fee is approximately $180.

Clearing title: As a home seller you must pass the title to the new owners without any lingering financial obligation attached to it. A collateral loan, secured line of credit, outstanding municipal tax or utility bills mustto be “cleared” up or paid in full.

For Home Buyers:

Inspection: Most buyers choose to hire a home inspector to perform a visual site inspection of the property. A general home inspection ranges between $500 to $600 and is generally based on the size and use of the dwelling.  If specific issues are raised, other types of inspectors may be required – for example, a mold and air quality, oil tank, structural, electrical, or plumbing are other areas that may require further inspection and investigation.

Appraisal: Some mortgage lenders will include the cost of the appraisal while others will require the buyer to pay for it. Most appraisers for residential homes will charge between $300 and $400.

Property Transfer Tax: First time buyers may qualify for an exemption on the general PTT. The General PTT is calculated at 1% on the first $200,000 and 2% on the balance up to $2,000,000, and 3% on the remainder over $2,000,000.

Survey certificate or title insurance: It is becoming more common for buyers to purchase title insurance rather than obtaining a survey certificate; some lenders may even require it. Title insurance is generally a one time fee of $300 to $400.

Lawyer/Notary fees: Although it is completely legal for a seller to process their own land transfer documents, the vast majority of home sellers and buyers choose to use a lawyer or notary. Legal fees and disbursements for an average real estate transaction will be around $1,000 to $1,200.

Property insurance: Home insurance for fire and other protection will vary. A very rough estimate would be for strata units $400 per year and for detached homes $1,500 per year. Most insurance agencies will offer a monthly payment arrangement.

Mortgage set up fee: Some lenders will change a one time set up fee of around $200 for the initiation of a mortgage loan.

Insurance binder: This is not an actual three ring paper binder – it is more of a retainer, a one time fee in the range of $50.

Municipal property tax: Local tax is calculated based on property market value. It will be assessed and range greatly across the different municipalities, but can be paid monthly. A safe estimate would be $50 to $200 per month.

Municipal utilities: Most areas will have an additional fee for water sewer and waste collection. Some stratas will include the city utility charge in the monthly strata fees, whereas some will require each owner to pay the city separately.

Strata fees: When buying in a strata you will be responsible for the monthly maintenance fee payable to the building’s strata corporation. The first fee payment is typically collected at the time of closing in advance, which may be prorated based on the day of the month you take over.

Strata forms (B&F): Stratas must issue a set of forms for a strata property to change ownership. These forms will generally cost $200 to $300 to obtain.

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