The Closing Costs First-Time Buyers Always Forget

First time buyers save diligently for a down payment and then get caught off guard by the costs that land on top of it. These closing costs are one time expenses due around the day you take possession, and they can add up to a real number. Planning for them early keeps your purchase from getting tight at the worst possible moment.

In Ontario you pay a provincial land transfer tax when you buy, and if the home is in the City of Toronto there is a municipal one on top. It scales with the purchase price, so on a typical GTA home it is one of the largest closing costs. First time buyers may qualify for rebates that reduce or eliminate part of it, which is worth confirming in advance.

You need a real estate lawyer to close the transaction. Their fee, plus title insurance and various disbursements for searches and registration, is a predictable line item. It is money well spent, since your lawyer protects you against title problems and makes sure the deal is registered correctly.

At closing you reimburse the seller for things they prepaid, like property taxes or utilities, from the possession date forward. Before closing, a home inspection is a smart, modest cost that can save you from an expensive surprise. And then there is the mundane but real cost of actually moving in: movers, deposits for utilities, and the small flood of first week purchases.

A useful rule of thumb is to set aside a few percent of the purchase price for closing costs on top of your down payment, then refine it with real quotes. Knowing these numbers before you make an offer keeps closing day calm. Ask us for a closing cost estimate tailored to the price range and municipality you are shopping in.