Tuesday, July 10, 2012

Closing Costs - Intended for (Ontario) Canada Only

This post is targeted to Ontarians and directed towards Buyers within the Province of Ontario. Those in other jurisdictions should consult with officials within their own markets, to determine all relevant closing costs. Suffice it to say, these costs need to be projected at the outset, to avoid a cash requirement ‘surprise’ come closing date.

Potential Buyer costs summarized as follows:

Land Transfer Tax - Paid at closing and as % of the purchase price (see your lawyer for exact calculation at the time).

Survey/Title Insurance - Lender generally requires this and survey costs can be significant, if it is a larger site. Title insurance may not be an option, depending on the property/lender.  Canvass your lender on whether title insurance is an option.

HST - If applicable, HST is additional to the purchase price.  See earlier blog here on HST – but if due, it becomes closing cost.

Legal Costs/Disbursements Fees for lawyer expenses in preparing the title deed, preparing the mortgage, & conducting title searches.  Disbursements are considered out-of-pocket costs incurred by the lawyer – such as search costs, supplies,
registrations/preparing discharges etc.

Legal Costs (Lender) Depending on the size of the financing, lenders can often require independent counsel to oversee the the mortgage process and look out specifically
for their interests. If necessary, it’s an additional cost.

It is well worthwhile to arrange a meeting with your lawyer in advance of closing,
and request a “Cost to Close’ estimate. Even if its approximate subject to certain
unknowns, it is a budget figure you need to plan for.

As always, consult with an experienced commercial broker in your market to assist you in the Purchase of Commercial Properties.

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