The Cost of Buying a Home
THE STANDARD CLOSING COSTS
Appraisal
Usually requested for conventional mortgages (20% down or more), the appraisal is meant to confirm the market value of a property. If applicable, the mortgage lender will order the report, but the cost of the appraisal ultimately corresponds to the property buyer.
As of 2022, an appraisal can cost around $300 - $400 CAD.
Inspection Report
The inspection report is not mandatory, but it is highly recommended. The inspection report is a thorough evaluation of the property. It addresses and reports on the condition of the property you’re considering on buying. It can emcompass foundations, electrical, plumbing, heating, water heaters, appliances, fireplaces, among others.
As of 2022, this report can cost approximately $700 CAD.
Legal Fees
For any property transactions, a real estate lawyer is required so they handle all documentations and legality of the transaction. Any legal fees should be discussed with the lawyer of your choosing, but a fair approximation would be anywhere between $1,500 to $2,000 of billable hours plus any disbursements, courier fees, land title charges, or title insurance.
Property Taxes
A variable and not so straightforward potential closing cost are your Property Tax Adjustments. Click here for more information.
Fire Insurance
Houses: The property must have sufficient fire insurance.
Condominiums: the Condo Board is responsible for adequate Fire Insurance.
For either case, the buyer is responsible for obtaining insurance on the contents of their property.
Life and Disability Insurance
Just as you want to insure yourself against death, illness or disability, you will also want to insurance your largest asset and debt. Life and Disability Insurance will be offered to you with your approval.
Real Property Report
The lender will request your lawyer review the survey and confirm that the house and/or any outbuildings do not encroach or cross the property lines. The seller will often already have this report and you can request this in the Offer to Purchase. Otherwise, a new report will be required which will cost approximately $1,300. Alternatively, most lenders will accept title insurance in lieu of this report which costs approx. $350. This report is required for all properties except condominiums.
Condo Documents
These are very important as it is the key to how the complex has been managed. Items you want to pay attention to:
a) all common expenses are paid to the date of advance;
b) fire insurance is in place;
c) the condominium is not a party to any legal action;
d) the condominium has reasonable reserve funds;
e) there are no special assessments levied, pending increases or major repairs…
If you need help analyzing and understanding your condo docs, there are local companies that specialize in this. Cost approx. $600 CAD.
Costs listed are approximations only, please confirm directly with any of your providers.