Closing Costs
From BuildingHomes.ca
Greg Scott, Jun 12, 2004
Closing Costs are the items you have to pay in cash prior to getting the keys for your house. They typically cannot be rolled into your mortgage.
On average, these costs end up being 1.5% of your total purchase price.
Example: If the purchase price of your house is $250000, then expect Closing Costs of approximately $3750.
Your sales office will be able to give you an idea on the costs. For the exact details, consult your lawyer. Much of it is dependant upon the lawyer receiving these details from another party, such as the builder and the banks. This usually does not happen until a few weeks prior to your closing date.
These are some common examples of Closing Costs:
- Meter installations
- Gas, electricity and water all require the installation of a meter in a new house. The utility will install these meters as per instruction by the builder. The utility then bills the builder and they pay it. The cost is then passed on to you and itemized in your closing costs.
- Municipal tree planting fees
- Even if you never get one, your municipality will probably charge for one.
- Land Transfer Tax
- The government collects a fee everytime a piece of land changes owners. Newly constructed houses may be eligible for a refund on this fee. Your lawyer will have the details on this.
- Remaindier of Property Taxes
- The builder will have paid in advance for property taxes up to a certain date. If your closing date falls before the date to which the builder paid the taxes, you will be responsible for the remaining balance.
- Tarion / Ontario New Home Warranty Program Enrollment Fee
- You need to pay a fee to enroll your house in the warranty program set out by Tarion. This fee varies depending on the purchase price of your house. You can view these fees and the Warranty details on Tarions website referenced at the bottom of this article.
- Fee to the law society
- I have no idea how to explain this one.
- Legal fees from your lawyer
- Your lawyer handles the entire transaction for the purchase of your house. S/he will have all the documentation from you, your bank, your insurance company, your builder and municipality in order to complete the sale.
It may be a good idea to use a lawyer local to your municipality because they are more likely to be familiar with all the details where your new home is being built.
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Disclaimer: The details contained in this article are for informational purposes only and are subject to change at any time. Always consult your lawyer for specific details.
