Closing (completion) Costs and Fees

 Your real estate closing costs and expenses usually will be between 3% and 4% of the property’s purchase price. On the day the deal closes, your lawyer will exchange documents with the seller's lawyer. If both lawyers agree all documents are in order, your lawyer will give the seller's lawyer a certified cheque for the balance due on closing.

Here are some examples of potential closing costs:

There are many costs associated when you purchase a property. The following information should be considered a general guide rather than a comprehensive list.

1. Land Survey – (The land survey is a drawing of the property which shows exactly where all fixed buildings are located as well as the boundaries of the property.) If the seller does not provide you with an acceptable survey in the Agreement of Purchase and Sale, you will need to obtain a new survey. Approximate cost: $450+

2. Title Insurance – (Title insurance protects the purchaser from many future legal issues which may arise with regard to the title of the property).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. Approximate cost: $250-275 (residential)

3. Land Transfer Tax - The Land Transfer Tax is payable on all purchases. The tax is calculated on the purchase price of a home according to a specific formula. Approximate cost: .3% (point 3 percent) of the purchase price of total purchase price.

4. Legal Fees - Legal fees will vary according to the lawyer. Make sure you ask what the fee includes. Approximate cost: $750-850

5. Disbursements - Disbursements are costs that you lawyer will have to pay on your behalf, such as registration fees, photocopies, etc. Approximate cost: $150+

6. Home Insurance - Home insurance premiums will vary from one insurance company to another and according to your insurance needs. Contact your insurance broker for rates. Approximate cost: Varies

7. Mortgage application - Your lending institution will charge a fee for processing your mortgage application. Approximate cost: varies

8. Mortgage Appraisal - Approximate cost: $200

9. Home Inspection - Prior to buying a new home, you should have a home inspection performed to identify any significant structural, electrical or plumbing problems with the home. Some lending institutions require that you have a home inspection completed before approving financing. Approximate cost: $300 - $400

10. Statement of Adjustments - The purchaser and the seller are each responsible for their share of taxes, fuel, and utilities. These costs will be reflected in the statement of adjustments. This expense can vary greatly depending if the seller has prepaid the property taxes (Please see section on understanding property taxes). Approximate cost: Varies

11. GST – (Goods and Services Tax) although most residential re-sale homes are exempt from GST, most services involved with the transaction will be subject to GST. This includes lawyer's fees, appraisals, processing fees, insurance, moving costs, real estate fee, home inspection, survey or title insurance, etc. Substantially renovated houses are subject to GST if purchased from the builder/renovator. Approximate cost: 5%

Sample closing costs on a $100,000 purchase:

Survey                               $450.00
Land Transfer Tax          $725.00
Legal                                $750.00
Disbursements              $150.00
Insurance                        $400.00
Mortgage Application
and filing fee                   $150.00
Subtotal                        $2,625.00
G.S.T. on Services         $131.25
Total Closing Costs   $2,756.25

This information is provided for informational purposes only. Actual closing costs will be determined by the specific circumstances that are involved in each individual purchase.