Today, I’ll outline all the costs you can expect when either buying or selling a home, with as much detail as possible, so that there are no surprises when it comes time to close on your home. While each case is a little bit different, there are some rules of thumb and some online calculators that will help you better understand exactly where the money goes.
A lot of first-time buyers and sellers ask me “What are my closing costs?” and the answer can come as a surprise. So here is what you can expect:
Closing costs for buyers
- Buyers will likely be pay for building inspection, and this can range anywhere from $500 to $1,200, depending on the type of property you’re purchasing.
- If they decide to do any specialized inspections like a chimney inspection, or a French drain inspection, that’ll cost anywhere from $150 to $300.
- In addition, they’ll also need to have the funds for the downpayment ready ahead of the scheduled notary appointment.
- Finally, the notary cost for buyers ranges from about $1,000 to $1,400.
Closing costs for sellers
- Seller need to prepare to pay notary fees of approximately $800 to $1,500, depending on the size of the property or certain details associated with it.
- The notary also handles repaying the seller for anything they paid in advance. For example, the seller may have already paid the municipal and school taxes for the entire year, but the buyer is only taking ownership October 1. This means the seller will be paid back the amount of taxes they’ve already paid for the rest of the year.
- If there are oil or propane tanks on the property, the notary will also be responsible for paying back the seller for any oil or propane left in the tanks when you take ownership of the property.
- Then there’s the infamous Welcome Tax. They buyer will receive a letter from their municipality, letting them know how much they owe. The amount will vary from one municipality to the next, but most municipalities have a calculator on their website. If, for example, you’re purchasing a home in Saint-Lazare for $500,000, the Welcome Tax will amount to $1,500.
- Sellers also may have to have their certificate of location updated, which can cost between $800 and $1,400 depending on the size and complexity in the property.
- One other consideration is the type of mortgage the seller has. They need to check with their mortgage broker if there will be a penalty, but there are usually a number of effective ways to manage this, especially if they’re buying another home.
That’s it. These are hidden causes that might’ve had surprise you.
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