What Are "Closing Costs", And How Much Money Should I Set Aside For Them?

Posted by Samar Manuel, Sales Representative

 Closing costs are those additional expenses that come due when you complete the purchase of your home. They typically include:

  • Lawyer's Fees: When you buy a home, you need to hire a lawyer to complete a title search (to make sure there are no outstanding liens against the property and that the vendor actually owns the property), ensure all the documentation has been accurately completed, register your mortgage and register you as the new owner of the property.


  • Land Transfer Tax: Most provinces (and some municipalities) charge a fee for documenting a change in ownership for real estate.


  • Disbursements: These are costs that the seller has paid in advance, such as property taxes and utilities. You reimburse the seller for any prepayments that come into effect after you take possession of the home.


The amount of these costs will vary, depending on where you live and what kind of home you're buying. As a guideline, you can estimate that closing costs will be about 2.5% of the purchase price of your home, though this may vary greatly, especially if HST applies to your purchase.

In addition to closing costs, remember that you may also need to budget for appliances (if not included with the home), utility hook-up, redecorating and paying a professional mover.

 For any questions and for any of your real estate needs, give me a call and I will be happy to help.