Closing Costs

Ontario Closing Costs
There are several items that need to be attended to prior to closing a Toronto real estate transaction. These include certain items imposed by the government, certain items that lending institution require as well as certain items that should be attended to in order to ensure clear title to the home or condo that you buy. In general, we ask our clients to budget up to 2% of the purchase price of the Toronto home or condo to cover these various items. While these vary depending on the situation, typical costs include:

In most cases, the agreement of purchase and sale will have a clause asking for the vendor to provide a survey to the purchaser at their cost within a certain period of time. If the vendor does not provide you with an acceptable survey, you may need to obtain a new survey. Approximate cost: : $650 . In most cases however, the survey is provided by the vendor.

Title Insurance
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).

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.(click here to learn more about land   transfer tax  or click here to go directly to the land transfer tax calculator)

Legal Fees
Legal fees will vary according to the lawyer. Approximate cost: $600 to $800 Disbursements.

Disbursements are costs that you lawyer will have to pay on your behalf, such as registration fees, photocopies, etc. Approximate cost: $400 to $600.

Statement of Adjustments
The purchaser and the vendor are each responsible for their share of taxes, fuel, and utilities. These costs will be reflected in the statement of adjustments which the lawyer puts together. Approximate cost: Varies depending on type of property (condo vs. freehold) and time of year.

Home Insurance
Home insurance premiums will vary from one insurance company to another and according to your insurance needs. In a condominium, the building insurance is included in your maintenance fees and does not form part of the closing costs, unlike a house purchase. Approximate cost: Varies

Mortgage Application
Your lending institution may charge a fee for processing your mortgage application. Approximate cost: Varies

Mortgage Appraisal
Approximate cost: $200. This may be waived depending on how you negotiate.

Home Inspection
Prior to buying a 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: $200 – $450 tax.

Status Certificate
Prior to buying a condo, you should request a Status Certificate. This document provides detail on the Condo Bylaws, Rules and Regulations, as well as Finances. Any Insuite restrictions or common element restrictions are also detailed in the Status Certificate. Most importantly, it includes information on the condo’s Reserve Fund, which is the amount the condo corporation has set aside to cover unexpected expenses. The Status Certificate is usually paid for by the seller. Approximate cost: $100.

CMHC Insurance Premium
This premium is only applicable if you are putting less than 20% of the purchase price as a down payment. Additionally, you have the option of adding the premium to your mortgage and amortizing it over the term of your mortgage. In the latter case, it does not form part of your closing costs as you will pay it over the term of the mortgage. Please click here to calculate how much your premium will be if you are intending to put less than 20% as a down payment.

Other costs that should be budgeted for include moving costs, starting new utility accounts, address changes, and others.

The material in this newsletter is not intended as legal advice. It merely conveys general information on legal issues commonly encountered by persons buying or selling real estate in Ontario.  If you are buying or selling a property should contact a real estate lawyer – immediately, to protect your interests

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