Crunching the Numbers: Closing Costs & What You Need to Know

Looking for a new home, recreational property or condo? It’s a great time of year to do so, with serious sellers out there and interest rates that are still very low. While you’re on the hunt for that perfect property, don’t forget to look ahead to the closing, which, well…you guessed it - includes closing costs. When buying real estate (especially for the first time) it’s important to keep in mind that there are additional expenses involved when closing that deal that need to be budgeted for in advance. Here are the top closing costs to be aware of so that you don’t encounter any unexpected bills you weren’t prepared for:

Inspection Fees

Although some people may opt out of a home inspection, it’s not something that’s recommended. You want to ensure that the home you’re buying is not only safe for you and your family, but a solid investment too. A formal inspection may reveal potentially costly or even hazardous issues with the home that an untrained eye may have missed.

Land Transfer Taxes

Anyone who buys property in Ontario (or when it’s a gift) must pay land transfer taxes to the Province on closing day, and the amounts can be substantial. The tax is calculated as a percentage of what you paid for the property. For example, if you buy a home worth $625,000 in the Collingwood area, you will pay approximately $8,975 in land transfer taxes. If you’re a first-time homebuyer, we have good news: you may be eligible for a refund on all or most of those taxes, so be sure to talk to your Realtor® or lender about your options.

Realtor® Fees

If you are purchasing a home (and not selling one) we have more good news: You don’t have to pay sales commissions or fees to your Realtor. How it works is that from the total amount you paid for the home, the seller is on the hook to pay the real estate fees, which are usually 4% - 6% of the purchase price. This gets split between the listing and buying agents. If you are selling a property, you will need to pay the commission, so be sure to negotiate your fees in advance with your Realtor® when you sign your agreement.


For those who don’t have a 20% down payment saved up, you will have pay for mortgage insurance to help cover any risks should you default on your mortgage without having built up equity in the home. There is also content and liability insurance required, and, for some people, they purchase title insurance when concerned about liens or related issues with the home. Be sure to factor these insurance expenses in with your total budget each month after purchasing the home.

Legal Fees

Finally, if you’re buying a home, condo or even a vacant lot, it’s advisable to consider using the services of a real estate lawyer. It’s a lawyer’s job to carefully inspect your purchase agreement, insurance forms, inspection reports, and all other documents to make sure nothing falls through the cracks. They also work to ensure the closing is executed carefully and that all closing costs are paid out.

Moving into a new home is an exciting adventure, and there’s a lot to know. At Clairwood Real Estate, we are here to help you along each step of the way, and we want the everything to run as smoothly as possible – with no surprises. Be sure to give us a call at 705-445-7085. Our experienced Realtors® are here to make the process of buying or selling your Grey Highlands, Meaford, Wasaga Beach, Collingwood, Georgian Triangle or Blue Mountain home easy and enjoyable.


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When it’s time to sell, you definitely want to put your best foot forward to get the optimum value for your home...


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Crunching the Numbers: Closing Costs & What You Need to Know

6. Your Lawyer Will Give You The Deed & The KEYS To Your NEW HOME!

The key exchange is the most exciting part of closing day! It's the reward you've been waiting for since you submitted your offer and endured the process of home buying from start to finish. Now it's time for you to walk through the door & proudly lay your new welcome mat at the threshold for all to see. Of course, you will still have a little slugging to do, now that you can move in, but your new adventure of home ownership has now begun.

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REALTOR®, REALTORS®, and the REALTOR® logo are certification marks that are owned by REALTOR® Canada Inc. and licensed exclusively to The Canadian Real Estate Association (CREA). These certification marks identify real estate professionals who are members of CREA and who must abide by CREA's By-Laws, Rules and the REALTOR® Code.  The MLS® trademark and the MLS® logo are owned by CREA and identify the quality of services provided by real estate professionals who are members of CREA.

   The trademarks MLS®, Multiple Listing Service®, and the associated logos identify professional services rendered by REALTOR® members of CREA to effect the purchase, sale and lease of real estate as part of a cooperative selling system.

Clairwood Real Estate Corporation, Brokerage
306-10 Keith Ave.
Collingwood ON  L9Y0W5
(705) 445-7085
(877) 445-7085