If you are a first-time home buyer, or it’s been a while since you made your last a real estate transaction, some of the “extra” costs can be a little overwhelming. To help you avoid any surprises, I’m answering the top money related questions I get asked most frequently.
What are ‘closing costs’?
The closing costs for a residential resale transaction include the land transfer taxes and lawyer fees – both of which your lawyer will tally and disclose. The land transfer tax is payable by the buyer and varies depending on how much and where you bought your home (see my blog post on Land transfer Taxes 101). The lawyer fees typically range between $1000-$1500 and include disbursements, which are costs the lawyer incurs to close the transaction of the sale of the property.
Are there any closing costs when buying a pre-construction property?
Much different from a resale transaction, the costs involved in pre-construction are lawyer’s fees, levies and occupancy fees – which is an interim occupancy that does NOT go towards your mortgage. This fee is a percentage of the unpaid mortgage, estimated taxes and maintenance fees. Your mortgage is required once the building is registered but until that time, you may be required to pay rent. New properties also have to pay a levy for parks, education, meter hookups, sewers, water lines, roads and other infrastructure improvements.
Who pays the real estate agent’s commission?
The commission is paid by the listing brokerage after a successful closing of the property. Before listing a property, the listing agent and seller agree to how much commission will be paid to both the seller’s brokerage and the cooperating buyer’s brokerage. HST is payable on top of the commission.
