What are the closing costs associated with buying a home in Niagara?  

Buying a home in Niagara can be a thrilling and life-changing experience, but it’s essential to understand the costs associated with the purchase. One very important thing to consider is the closing costs, which can add up quickly and catch many first-time homebuyers off-guard. These factors include legal fees, land transfer tax, home inspections, title insurance, property insurance, and other adjustments.

What do legal fees cost when buying a home?

Legal fees are one of the most significant closing costs associated with buying a home in St. Catharines, Niagara Falls, or elsewhere in Niagara. You must hire a lawyer to handle the legal paperwork, including the deed, mortgage, and other legal documents. The fees for this service can vary but typically range from $1,500 to $3,000, depending on the complexity of the transaction. 

Can your Real Estate agent recommend a lawyer? 

It is not uncommon for a home purchase to be the first encounter that many people have with legal services. Yes, your agent can provide a list of recommend lawyers to handle the legal aspects of your home purchase. The agents at Boldt Realty have worked with and trust these lawyers to handle your real estate transaction with utmost professionalism and knowledge.  It is important to remember that your agent cannot require you to use a particular lawyer, and the final decision is always up to you. However, working with a lawyer recommended by your agent can make the process smoother and less stressful, as they are likely familiar with the legal requirements of real estate transactions in Niagara. 

What is the land transfer tax in Niagara?

Another essential closing cost to consider is the land transfer tax. In Canada, it’s the buyer who is responsible to pay the tax when purchasing a property, not the seller. The amount of the tax will depend on the property’s purchase price and can range from 0.5% to 2.5%. For example, if you purchase a home in Ontario for $500,000 (outside of Toronto, where the rules differ), you can expect to pay roughly $6,465 in land transfer tax.  Of course, this may vary if other factors are involved.
 
The tax is calculated by adding together fees specific to fixed ranges of the purchase price. For example, the first $55,000 is taxed at 0.5%, then 1.0% on amounts exceeding $55,000 through $250,000. You can experiment with the Boldt Realty Land Transfer Tax calculator for a quick estimate. 

What does a home inspection cost?

A home inspection is an essential step in the home buying process, as it can identify any potential problems with the property while the transaction is still in the negotiation phase. The cost of a home inspection can vary, but you can expect to pay between $400 and $600 for a standard inspection.  

In hot markets, when an inspection condition may weaken your offer, it is wise to inspect the property as much as possible during your viewing – preferably with a certified home inspector. It also never hurts to have a handy friend or knowledgeable family member tag along to keep an eye out for any areas of concern. Make sure to get in those attics and crawl spaces if possible. 

What does title insurance cost?

Title insurance is an insurance policy that protects you against any defects in the title of the property. It covers the legal costs of settling a dispute if some third party claims they had the legal right to ownership of your property before you purchased it. The cost of title insurance can vary, but you can expect to pay between $250 and $500 for this service.  

Title insurance isn’t a legal requirement in Canada. Regardless, your mortgage lender may require you to purchase it. 

What does property insurance cost?

Property insurance is another essential and ongoing cost that you will need to consider upon assuming ownership of a new property. This insurance policy will protect your property against any damage or loss, such as fire or theft. The cost of property insurance can vary, but you can expect to pay between $500 and $1,500 per year. 

What are adjustments when buying property?

Adjustments are costs paid at closing to cover expenses the seller has already paid. For example, if the seller has paid property taxes for the year, you may need to reimburse them for the portion of the year that you will own the property. The amount and number of adjustments can vary but typically range from $500 to $1,500. 

When making what may be the greatest purchase of your life, it is essential to understand the various closing costs associated with the purchase. These costs can add up quickly, so budgeting accordingly is vital. Working with a reputable real estate brokerage like Boldt Realty can help you navigate the homebuying process and ensure you are prepared for all associated costs.