Closing Costs

When you are buying or selling real estate, there are costs to be paid when the transaction is completed and the title is transferred. To help buyers and sellers to budget properly and avoid unexpected bills, I have outlined some of the possible types of expenses that might be involved.

Legal Fees

The seller will have to pay a lawyer to prepare a transfer of title and handle the proceeds from the sale.

There will likely be some miscellaneous expenses, but the seller generally does not have any Land Title fees.

Mortgage Payout Penalties

If you have a mortgage, check it carefully before you decide to sell.  Speak to your lender to ensure you fully understand if a payout penalty may arise and if so, what that penalty may amount to.  Ensure you also budget for your final mortgage payment.

Real Property Report (RPR)

The seller will likely provide an RPR and compliance stamp.  This confirms that the various improvements on the land (eg: the home, deck and any outbuildings) are contained within the boundaries of the land and that they do not contravene any municipal by-laws.  Costs will be incurred with the surveying firm that produces the RPR and the local authority for the compliance stamp.  If there is an existing RPR that shows all the improvements on the property, it will probably not be necessary to get a new one.

Property Tax Adjustment

Depending on the possession date, the seller will either reimburse the buyer, or vice versa, for a portion of the annual taxes.

Real Estate Commission

This is usually taken from the proceeds of the sale and is usually dependant on the sale price.