Closing Costs

Land Transfer Tax:

½ of 1% on the first $55,000.00 of sale price plus 1% of the sale price over $55,000.00 to $250,000 and it goes up from there depending on the sale price..

Legal fees:

Generally negotiated with the lawyer before closing takes place. Budget about $800.00-$1000.00 plus an additional $400.00 for disbursements and this will be plus or minus $250.00 from what you should expect to pay.

Property Tax Adjustment:

There can be separate adjustments made for property taxes, one with the vendor and one with the Mortgage Company. In the vendor’s case, tax adjustments take place based on either projected or paid vendor taxes for the year. The taxes are converted to a per diem rate and the vendor is charged for the number of days in the year he or she owns the real estate and the purchaser is charged for the rest. This is usually done as a price adjustment by the solicitor on the closing date. If the mortgage company collects taxes with the mortgage payment as they do in most high ratio insured mortgages, there can be two or more ways this is handled. The lender may not make any adjustments on the closing date but deal with the matter at the time the first tax bill is received. If there is a shortfall in the tax account at that time, the mortgage company may demand payment of the shortfall at the time the taxes are paid by them or they may stretch it out over a period of a few months to a year until they are paid up to date. The second way to adjust for taxes is for the mortgage company to set up a tax account on closing and take sufficient funds from their advance to put in the tax account for future taxes. This amount together with the tax installment portion of the regular payment will accumulate to the estimated amount for taxes by June or July 1 of the next tax year.

Utilities:

If the home is heated with oil or propane, the tanks are filled on the day of closing and the purchaser is charged with a full tank of fuel. Gas and electricity are metered and generally not subject to adjustments.

Survey:

Most mortgage companies require a building location survey prior to funding of their mortgage. This is to insure that there are no encroachments on the property and nothing on title that would adversely affect future value of their security. The cost for a building location survey is about $1,200.00. The good news is that if the survey is current and there have been no additions to the property such as but not limited to pools, sun rooms, carports/garages, or any other addition that has value and changes the original foot print of the building on the lot, most mortgage companies will accept an older survey that reflects the current structure on the lot. Most companies will accept Title Insurance in lieu of a survey.

Insurance:

It is the purchaser’s responsibility to insure the property against all perils. The cost of the insurance will be billed to the purchaser if self-arranged or the lawyer may include it in the adjustments if arranged by him or her.

GST/PST:

There is sales tax charged on Fire Insurance, High Ratio Mortgage Insurance, legal fees and some of the lawyer’s disbursements. These will be adjusted on closing.

* In addition to the above, any prepaid contracts not included in the price may be adjusted.