Understanding Property Deal Closing Costs

So, you are excited to buy your new house – but are you sure that what you are going to pay for has already been laid out on the table?

Here’s the thing: most of the time, the price of a house that you see is not all you’re going to pay for. There may be other expenses that you’d have to pay for, especially when the offer is almost closed, and when it actually closes. Here’s what you need to know.


Costs Before Closing


One of the things that you may have to prepare for is having the property appraised for the deal to be almost done with. Apart from that, home inspection may also be done. Of course, you are not allowed to do this on your own. A third-party inspector would be responsible for doing the said task to avoid biases.


Doing so is also good because it will provide you with peace of mind, and let you know whether there are issues that have to be addressed before buying the house. These may include electrical, sanitary, water, and safety related issues. This will cost around $500.


As for appraisal, it is done to know the true value of a home, and if actually has good market value or not. It’ll help you know if your chosen property has the tendency to depreciate easily, too. This costs roughly $300 to $500.


Costs Due At Closing


If the deal is ready to be sealed, and is close to be considered “closed”, you have to be ready to pay a couple of important things. One of these is Land Transfer Tax. This depends on where you are located. In some provinces in Canada, for example, taxes have to be paid before the owner is handed the property. Additional taxes may also be implemented, as well.


You would also have to pay Property and Title Insurance. This is a way to make sure that you would not be left with nothing in the unfortunate event that your house gets destroyed by fire, or by a calamity of any sort. Paying for Title Insurance, on the other hand, means that you will have some security against potential problems regarding the ownership of your property. Paying will mean that you alone are the rightful owner of your home. You have to prepare at least $200 to $300 for this.


Your mortgage broker might also talk to you about what is called Statement of Adjustments. If water, utility bills, and other taxes have been paid by the previous owner before handing you the title, you may have to reimburse the money that the owner has paid until such time that you could actually start living in your new house.


You’d also have to pay Provincial Mortgage if you have chosen a property with less than 20 percent of the mortgage you are supposed to pay.


Lastly, legal fees for real estate lawyers may cost you around $500 especially if told that you are required to have one.


Prepare Rather Than Be Scared


By knowing what you have to pay, and complying, you can be sure that you would have less to worry about – and that your chosen property would truly be yours!