Closing Cost in Ontario: A Complete List For Buyer and Seller
Closing cost of buying a house in the resale market
When buying a house or a condo in Ontario, Canada, the average closing cost is quite high. Besides, you would also consider the housing cost after a house purchase. As a first time home buyer, you may need an accurate calculation on how much and when you need to prepare financial funds on time. Closing costs to buy a house may include the items below
Deposit: Real estate deposit is usually 5% of the home purchase price. In common practice, it is payable by certified check or bank draft and to be deposited in the listing brokerage trust account within 24 hours after the offer acceptance.
Down payment: Downpayment is usually 20% of the home price from the leading banks. Some financial institutions require less downpayment, but the mortgage rate tends to be higher with an insurance premium.
Mortgage: Your actual monthly payment depends on the loan size, whether you choose a fixed or variable mortgage rate. You can use a mortgage calculator for a close estimate.
Home inspection cost: Home inspection costs vary on home square feet, age, home condition. For a typical single-family home, it ranges $300~$500 on average. Inspection for condo is more focused on the unit instead of the building, and it costs less than the regular house comparatively.
Home appraisal cost: Loan lenders request a home appraisal. The average cost is $350~$700 for a typical single-family home. You would ensure who pays this cost and be aware that the home appraisal value may come short if your offer price is considerably higher than the market value.
Surveyor fee: It is used for identifying property boundaries with a cost of around $700.
Real estate lawyer cost: Lawyer does the title search and closing for you, the legal fee ranges from $1000 to $1500
Status Certificate: Condo buyers may need to have it reviewed by the lawyer, the application fee is $100 including tax.
LAND TRANSFER TAX: It varies with home price. If you buy a home in Toronto, the municipal tax is applied with the same amount as that of Ontario. For example, $16475 for each provincial and municipal tax at a $1M house.
COMMISSION: Buyer agent fees are commonly paid by the seller. However, under certain conditions, the buyer is obligated to pay the commission deficiency.
Home Insurance Rate: It is around $120 per month on an average home. The policy needs to be effective on closing day. An average of $250 is applicable to title insurance.
Mortgage insurance: only applies to the buyers whose down payment is lower than 20%. The mortgage insurance cost is rolled into your monthly mortgage.
Moving cost: Moving may go much cheaper in DIY or it costs you $1000 for professional movers
Other expenses: Opening new utility accounts such as electricity, telephone, and internet services. Each service may cost you $20~50 on average.
Closing adjustment: Per the agreement of purchase and sale, utilities, property tax, condo fees are prorated on the closing day. If the seller has paid the bill, you would reimburse that amount starting from the completion day.
Possible immediate repairs and fix up, Renovations, Home Appliance: It is variable upon personal situations.
Pre Construction condos buyer closing costs
When you buy a new home, the typical closing cost for buyers is comparatively higher than the resale market, with around 5.5% of the home purchase price. Take an example of an average one-bedroom condo in Toronto :
Condo Fees: $600
Reserve Fund: two months of condo fees, around $1200.
Property Taxes: variable, around 0.75% of a condo price.
HST on new home appliances and other administrative fees
Development Levies: variable by high thousands. It could be capped when negotiating a contract with the builder
Utility Connection Fee etc: $500-2000
Tarion Fee: varies with condo price, around $1300
Real estate lawyer cost: $1500~$2000.
Land Transfer Tax: Both Municipal Provincial taxes are applied, variable on home price.
Closing cost for selling a house
When selling a house, the seller needs to consider the closing cost to estimate accurate net proceedings.
- Home Staging: It speeds up the selling process and may invite more bidders and thus may increase your selling price. But the cost is considerable, with $3000 on average.
- Mortgage Penalty: If you have a loan and you sell your home, you would possibly have a mortgage penalty. It is variable and usually equals 3 months of interest.
- Home Inspection: Home Inspection is usually required and paid for by the buyer. But there do have benefits to getting it done by the seller. The cost ranges from $300-$500.
- Status Certificate: The application fee is $100 including tax. An additional cost is applicable for expediting. Similar to home inspection, though it is commonly paid by the buyer, there are certain benefits to be done by the seller before listing your home for sale.
- Commission: Real estate commission is a considerable closing cost for the home seller. It covers the realtor fees of the seller agent and the buyer agent as well. Agent fee on average ranges from 3%~5% of the home selling price including 2%~2.5% for the buyer agent. You do have an option to sell privately in Ontario, however, the marketing exposure becomes a problem if it is listed in MLS. There are flat fee agents available to lower your cost.
- Real Estate legal fee: Lawyer fees to sell a house is usually lower than that of buying a house. The seller lawyer fee is around $800 for closing with the buyer’s lawyer
- Capital Gain Tax: If you are a non-resident, when you sell a home, 50% of net proceeds are applicable to capital gain tax. If it is an investment property instead of your primary residence, the tax may also be applicable.
- Closing Adjustment: Property tax and utility fees will be adjusted proportionally on the closing day. You are due to the part before the closing day if you haven't paid the bill yet.
- Repairs or replacements cost: The home buyer may request you make repairs or replacements after the home inspection
- Moving costs: varies largely with whether you hire a company or do it on your own.
