• Balance of Purchase Price — the purchase price less the buyer’s initial deposit (the latter could be anywhere from 5% to 20%) • Legal Fees — amount depends on purchase price and lawyer (approximately $1,800 for a $500,000 purchase in Toronto) • Title Insurance — sometimes included in legal fees ($250-$400) • Realtor Fees— if you use an agency/real estate professional to sell your home. • Land Transfer Tax — varies according to province (and sometimes municipality) and depends on purchase price • Adjustments/Prorated Costs for Annual Expenses — includes property taxes, condominium fees, and utilities • Other Fees Sometimes Paid by Seller — appraisals, inspections, closing costs, etc.* **According to Mortgages.ca, lenders request appraisals and the borrower (seller) pays the appraisal cost however, many home buyers, especially first-timers, order one on their own to protect themselves. Further, closing costs can’t usually be paid by the seller on the buyer’s behalf in Canada.
Spending Deposit Money Prior to Closing
Don’t believe that the deposit money given at the time an offer is accepted is yours until the deal has closed and you have received your funds. Too many stories tell about sellers who used up their deposit money in other forms of credit or by tapping into savings before closing the deal. When the transactions did not occur, for reasons — such as repairs or financing — the sellers are left now having to cover that spent money on their own.
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