I continue to be concerned about the costs associated with closing real estate deals and the transfer of title from a seller to a buyer. Land transfer taxes are off the charts and can make a real impact in the decision for many people. Unfortuantely, they are a reality that is not likely going to go away any time soon. There are additional costs that are often overlooked that need to be considered when looking at what the total will be on closing.
Legal Fees: The fees your lawyer will charge for work done, title transfer costs and disbursements. Your lawyer will review these with you. Typically, in a simple transaction, you may be looking at $1000-$1500.
Land Transfer Tax: This is a fee paid to the Provincial Government and forms part of your closing costs. The fee changes with the purchase price but as a guide, expect to pay 1-2.5 % of the purchase price. Some areas (such as Toronto) have a second tax as well.
Mortgage Fees: Every Lender is different but typical fees would range from $250 -$500. You will need your down payment for your purchase at this time. There are many different programs and sometimes incentive programs as well. Your Lender can explain all the different options available to you to best meet your personal situation.
Insurance: You need to provide your insurance information to your Lender before the closing date. It needs to be effective the day of closing.
Moving Costs: To ensure a smooth moving day, make sure you hire a dependable and reputable mover. Get referrals and talk to the people who have used them. Every mover is not the same.
Service Contracts: You will need to find out if there are any systems related to the home, such as Security systems, Hot water tank contract, etc., that you will be required to assume on closing.
The tougher question: Is the Buyer is downloading these costs, ultimately, the seller? Does this affect real estate growth in certain centres?
Any ideas on how to balance things out between the need for funds by the government and the fees paid in real estate transactions?