Toronto is consistently voted one of the top 10 cities in the world to live. It should come as no surprise then, that there are some significant costs associated with buying a home in this amazing city. Some costs you might be expecting and some you might not know about. We’ve compiled a list of the standard costs every home buyer must consider in their home buying journey.
1) You don’t pay a buyer’s agent – their commission is paid for by the seller.
We often hear from potential buyers that they expect to pay the full commission on the entire transaction. In fact, it is the seller who pays the buyer’s agent commission, so why wouldn’t you take full advantage of working with an experienced real estate pro?
★ Check out our blog on How To Hire The Right Realtor
2) Land transfer tax
If you are a first time home buyer it might come as a shock to you that you must pay the land transfer tax on any home you buy. This is a significant amount of money (in the tens of thousands) and it is based on the cost of the home. Land transfer tax needs to be paid on the day of the closing and can not be added to your mortgage. This is an important consideration when calculating your downpayment amount.
★ Try our Land Transfer Tax Calculator to determine what extra fees could be involved in the purchase of your new home
3) Legal Fees and Disbursements
You must retain a lawyer for any home purchase in Toronto. A lawyer facilitates the transfer of title, notarizes all documents as well as oversees the entire process ensuring it is meeting standards. As a home buyer in Toronto, you should count on paying a real estate lawyer anywhere between $1000 to $2000 per closing.
4) Mortgage And Bank Fees
Fees such as an appraisal, which is approximately $400 and depending on your bank other minor fees. It’s always a good idea to check with your bank what fees will be passed on to you.
5) CMHC Mortgage Loan Insurance
If you want to buy a home with a down payment of less than 20%, you’ll need mortgage loan insurance. This protects your lender in case you can’t make your payments. This home insurance is only available for purchases under $1,000,000. Anything over this price and you will be required to have the full 20% as downpayment.
6) Home Inspection
If one is needed, this could range from $600-$700 per inspection. Most of the time a pre-list home inspection will be provided by the listing agent, however this isn’t always the case.
7) Moving Costs
A professional moving company will wrap your furniture to prevent scuffs and scratches, as well be incredibly efficient with loading and unloading your possessions. Moving day is probably the worst part of buying or selling a new home, hiring professional movers can at least shorten the time frame, and hopefully lessen the pain. A full day of movers can cost anywhere between $800-$1200 depending on the amount of furniture you have, stairs into and out of each home etc.
Other fees to consider
- first time buyers who are renting – the rental period end and closing of new property may not align – you might pay extra rent
- for home owners making a house swap, your closings may not align – you will either need bridge financing if your new house closes earlier or pay for accommodation if your new house closes sooner – such as airbnb, or vacation