Real Estate Closing Costs

Most frequently with individuals buying their first home I find that they are unaware of the costs in addition to the purchase. There are several costs that you will need to be aware and have funds set aside for. This list I am providing is in no means comprehensive but will give you a good idea of what the average closing costs for a home are.

Legal fees- A lawyer should complete the purchase of your home. Legal fees vary from lawyer to lawyer but on average it is safe to allow $500 to $800 for legal fees and another $300- $400 for disbursements such as registering the deed etc.

Deed Transfer tax- (In Canada this is more commonly called Land Transfer Tax.) The municipality (or province in Canada) the home is located in will charge a fee to transfer the deed into your name. In most of the metro area this fee is 1 1/2% of the purchase price of the home. For example in a $100,000 purchase you would pay $1,500 deed transfer tax. This tax is paid on closing to your lawyer who then pays the municipality.

Mortgage application fees- Mortgage providers will sometimes have fees for applying for a mortgage and an appraisal of the property you want to purchase. If you are borrowing more than 75% of the value of the property there will likely be some sort of fee applied to the financing package. These fees vary considerably depending on the mortgage product and the financial institution.

Moving costs- Remember that buying a new home means moving your stuff into that new home. Truck rentals and movers cost money so don’t forget them.