Closing Costs when Buying Real Estate!!!

The offer has now been accepted, what are some of the next expenses to expect? Well it's better to be prepared and anticipate your closing cost then find yourself short on closing day.

Cash expenditures

Deposit - The deposit is put towards your down payment for the purchase of your new home. Deposits can vary, but remember, if you don't firm up your offer, your deposit should be refunded to you without any deduction. Please ensure that deposits are put in a Real Estate Brokerage trust account that is insured or a Lawyers trust account.

Home Inspection Fees - Taking the time to inspect your home thoroughly will pay off. The home inspector will walk you through the home and show you the positives, how things work and possibly some things that should be done in the future. He will also provide you with a written report. Home inspections will require anywhere from 1 ½ to 4 hours of your time and in the Grey Bruce area the cost is approximately $300.00 to $500.00.

Septic Tank Pumping - Many homes in Grey Bruce County have septic systems that should be pumped with you and your Real Estate agent present. This can be a cost to the seller or buyer and should be negotiated in the Offer to purchase. It costs approximately $100.00 to $150.00 or more depending on the season. (See Getting ready to sell your home in Grey Bruce? The benefits of a Healthy Well and Septic)

Water Test - Homes in Grey Bruce County are likely to have their own source of water. Water tests should be conducted with 2-3 tests taken a week apart. These tests are free and test for Coliform or E-coil with appropriate bottles. The bottles can be picked up and dropped off at a hospital in Markdale, Durham or Hanover. Results of the tests are verbally available in approximated 48 to 60 hours.

Another water test that can be conducted is a flow rate and is usually conducted by a qualified well driller and determines the flow of the well water and its recovery time. This can be at a cost to the seller or buyer and should be negotiated in the Offer to purchase. The cost of this test is approximately $250.00 to $350.00 depending on well location and well type.

Estoppel Certificate Fee-This fee may apply if you are buying a condominium or strata unit and is usually $100 for certificate.

Mortgage Costs

Appraisal Fee - A licensed appraiser will conduct an on-site review and use various calculations to analyse and estimate the value of your home. This fee is most often covered by the lender to certify the resale value of your home in case you default on the mortgage. This cost can range from $250.00 to $350.00.

Mortgage Insurance - Helping to make dreams come true with home ownership. If you purchase a house with less than 20% down payment, you will be required to purchase mortgage loan insurance. This helps to protect the lender in case there is a default on the loan. Visit www.cmhc-schl.gc.com to learn the many benefits and features of CMCH insurance including portability and refunds.

Closing Cost that are mandatory

Land Transfer Tax - Is calculated as a percentage of the purchase price that varies from province to province. Ask your REALTOR® to complete the calculation for you. Currently in Grey Bruce County we don't have municipal LTT.

Legal Fees & Disbursements - Legal fees represent the preparation and recording of official documents that allow you to have title to your new home. It is best to get quotes from a local lawyer that can be recommend to you by your REALTOR®

Title Insurance - Most lenders will require that you obtain title insurance. This insurance will be purchased through your lawyer.

PST on CMHC Insurance - CMHC insurance is finance through the mortgage, but PST of the insurance must be paid at the time the property closes.

Other Costs

Property Insurance Fuel (Oil or Propane) Reimbursements

Utility Deposits Property Taxes Adjustment

Tank Rentals Other Rental Charges (Hot water Tanks, Utility Lights, water softeners, Alarm Systems and more)

Being prepared is better than being upset. Hiring the right REALTOR® in Grey and Bruce County is the way to go. (See How to get the most out of your REALTOR® when buying in Grey and Bruce County)