Chris Biasucci

Closing Fees

“CLOSING FEES” is a term that refers to the various payments, taxes, and fees-other than the purchase price of the property –that the buyer must pay through the course of buying a home. So that you can budget effectively, I have included a list of the most typical expenses below.

REAL ESTATE FEES: The amount of the real estate fees that you will have to pay is dependent on the agency relationship you choose (ask me about Agency Relationships for more details). Usually, buyers wish to have the broker represent them (as a Buyer Broker), so they may wish to pay realtor fees-around 3% of the purchase price, plus tax

LEGAL FEES: While legal fees will vary depending on the lawyer, buyers can expect to pay somewhere between $500- $1000 to close their real estate transaction.

HOME INSPECTIONS: Once a suitable home is found, buyers are urged to purchase a home inspection ($225 - $400 from a certified inspector). A termite inspection is an additional $175

SURVEY: It is strongly advised that each property have a survey. Frequently, the seller has one that can be transferred to the new owner, but a new survey costs approximately $700 - $1000. If a survey is unavailable, the buyer may wish to purchase title insurance, which is much less expensive. To learn more about title insurance, visit TitlePlus.

TITLE INSURANCE: Title insurance will protect property owners and mortgages against loss through adverse claims or hidden interests in their properties. This unique product was developed as a result of inadequate deed registry systems; the reliance on privately held mortgages, which were not always registered; and the somewhat haphazard manner in which lands were opened for settlement.

MORTGAGE SET-UP: There are often extra costs associated with setting up your mortgage, such as an appraisal fee ($150-$200), or insurance. Ask your lender for details.

LAND TRANSFER TAX: The amount of Land Transfer Tax you will pay is dependent on the purchase price of your house.

The rates are: (approximately)

Up to $250,000 - 1%
$250,000 - $400,000 - 1.5%
Over $400,000 - 2%

You'll also have to reimburse the seller for the unused portion of any prepaid property taxes or utility bills. As well, you must also pay any legal fees, and, if applicable, any REALTOR® fees. Be prepared to furnish proof to your lender that you have insured your new house as well.

Before the property can formally change hands, there are still a few things to do. On or before closing day, your lawyer and the seller's lawyer will arrange to transfer title of the property from the seller to you. The mortgage money will be transferred to your lawyer's trust account, and then to the seller, and your lawyer will bill you all additional expenses such as land transfer taxes or outstanding legal fees.

At this time, be sure to check with your lawyer that everything is as stated in the offer-to-purchase. Once you're satisfied and the keys to the front door are in your hands, there's nothing else to say... except welcome home!

(The comments contained on this site are for information purposes only and do not constitute legal advice.)

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