Sheri McKay - Sales Representative - RE/MAX a-b Realty Ltd. Brokerage - Stratford, Ontario
Sheri McKay
Sales Representative

RE/MAX a-b Realty Ltd.
Brokerage Independently
Owned & Operated

88 Wellington Street
Stratford, ON N5A 2L2

519-273-2821 Ext. 236
Fax: 519-273-4202
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Closing Costs

The total cost of buying a home involves not only the purchase price of the property, but also other costs that arise on closing the transaction. These expenses, incurred by the buyer, are necessary to complete the purchase but are outside of the purchase price for the property. According to the CMHC and Genworth Financial, you need to have between 2 - 2.5% of the purchase price for closing costs in addition to the down payment.

Fees, the types of services provided, and procedures required in the closing process will vary by provincial jurisdiction. Below is an example of these costs. They will vary depending on your situation.

Adjustments for realty taxes, fuel, utility bills and other charges that the seller has prepaid. The buyer will credit the seller with their proportional share.

Legal expenses/disbursements. The expenses are those involved in drafting the title deed, preparing the mortgage and conducting various searches. The disbursements are the out-of-pocket costs incurred during this process, such as supplies and searches.

Mortgage expenses including interest on assumed mortgages (calculated as part of the adjustments), any arranging costs, and registration of a new mortgage in the land registry or land titles office.

House insurance for fire and other hazards, typically including liability coverage.

Title search and registration of appropriate documents in the land registry or land titles office.

Cost of survey, zoning memorandum, tax certificate and other related matters based on provincial requirements.

HST: Most purchases of new housing requires the payment of HST on the purchase price, although a partial rebate is available. Most purchases of resale homes do not require the payment of HST, however, confirmation of this fact should be obtained. As a guideline, HST is payable on properties other than resale residential property, subject to certain exceptions. HST is also payable on lawyer's fees and most disbursements.

Land transfer tax. Most provinces charge this tax, although first-time buyers may be entitled to a refund.

Personal expenses, e.g., moving costs and purchase of household goods.

All Buyers should be aware of these extra costs before finding themselves legally bound to an agreement/contract and possibly find themselves unable to fulfill the financial terms. Various costs apply when selling a home, however, the Seller has the proceeds of the sale from which to pay them.

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