Buying your first home is a very intimidating and stressful process.

Be definitive about buying. Get qualified for a mortgage. It is extremely vital that you know exactly what you can qualify to buy and what you're comfortable borrowing. Real Estate agents can offer you a certain crash course in your preferred real estate in a few hours. The best part is that it is free. Buyers don't have to pay an agent a fee, the seller does.

The following items represent extra costs involved in selling and/or buying a home. Some of these are one-time costs while others are ongoing. The good news is that not all of these costs may apply in your particular transaction. Also, there may be other costs to you that have not been captured below.

  • SURVEY (BUYER) - If the seller does not provide you with an acceptable survey in the Agreement of Purchase and Sale, a new survey may be required. (Note: Per Clause 12 of the Agreement of Purchase and Sale, “Buyer shall not call for the production of any title deed, abstract, survey or other evidence of title to the property except such as are in the possession or control of Seller…”. However, the seller may be responsible to incur the cost of an updated survey if negotiated in the Agreement of Purchase and Sale).

    Or …

  • TITLE INSURANCE (BUYER) - A title insurance policy can eliminate the requirement for a new survey. Title insurance is an insured statement of the condition of title or ownership of real property at the time the policy is issued.

  • LAND TRANSFER TAX (BUYER) - Land Transfer Tax is payable on most transactions of real property, the cost of which varies as a percentage of the property’s purchase price.

    Land Transfer Tax is imposed by the Province of Ontario as follows:

    0.5% on the first $55,000

    1.0% on the amount from $55,000 to $250,000

    1.5% on the amount in excess of $250,000

    An additional tax of 0.5% applies to consideration over $400,000 for land that falls under the definition of single-family and duplex residences.

  • LEGAL FEES (BUYER/SELLER) - Legal fees will vary according to the lawyer. Make sure you ask your lawyer what the fee includes. Note that legal fees are GST taxable. Legal fees may include, but are not limited to a review of the Agreement of Purchase and Sale and associated documentation, mortgage instruction/review to ensure requirements of lender are satisfied, registration of deed and mortgage, and disbursements (registration fees, photocopies, etc.). The buyer will also incur search costs to ensure good title to property (no outstanding mortgages, liens or other charges against the property; compliance with municipal work orders, zoning and building codes, fire and health regulations; registration on title of any easements, right-of-ways, restrictions, encroachments or other claims, etc.) and a review of utilities and taxes to determine amounts, if any, in arrears for closing adjustments.

  • REAL ESTATE FEES (SELLER) - Per your agreement with your real estate representative.

  • GST (BUYER/SELLER) - Although most residential re-sale homes are exempt from GST, GST is generally taxable on the purchase of new homes or homes that have been substantially renovated. However, the GST legislation provides for a partial rebate of the 7% GST payable on such properties. Most services involved with a real estate transaction are also subject to GST, including lawyers fees, appraisals, mortgage insurance premiums, processing fees, home insurance, moving costs, real estate fees, home inspection, survey or title insurance, etc.

  • HOME INSPECTION (BUYER or SELLER) - It is highly recommended that a home inspection is completed prior to buying a home. A seller can have a home inspection performed and available to buyers as a part of the sale, or buyers can arrange to have their own home inspection. Any repairs should be factored into the costs. Note that some lending institutions may require a home inspection before approving financing.

  • HOME INSURANCE (BUYER) - Home insurance covers the value of the structure of a home and its contents. A lender will most likely insist on this if a home is the security for a mortgage. Home insurance premiums will vary from one insurance company to another and according to insurance needs.

  • MORTGAGE BROKERS FEE (BUYER) - A broker may charge a fee to find a buyer a lender.

  • MORTGAGE LOAN INSURANCE AND APPLICATION (BUYER) - A mortgage in excess of 75% of the purchase price is known as a “high ratio mortgage” versus a conventional mortgage that’s less than 75% of the purchase price. Mortgage loan insurance is generally required on high ratio mortgages. It protects the lender and, by law, most Canadian lending institutions require it. Having mortgage loan insurance means that if the borrower defaults on a mortgage, the lender is paid back by the insurer - either Canadian Mortgage and Housing Corporation (CMHC) or Genworth Financial Canada (formerly GE Mortgage Insurance Canada). Note that the protection provided to the lender by the insurer does not relieve the borrower of the obligation under the mortgage contract. With the risk of losing their money removed, lenders have the confidence to make mortgage loans of up to 95% of the purchase price of the home (subject to price ceilings). There are two components to mortgage loan insurance - the application fee and the insurance premium. Insurance premiums will range from 0.5% to 3.25% of the amount of the loan (additional charges may apply), depending on the size of the loan and the value of the home. The premium can be added to your mortgage loan and paid off as part of your regular mortgage payments, or paid off in a lump sum at the time of purchase to save interest charges on the premium itself.

  • MORTGAGE DISCHARGE FEES (SELLER) - Mortgage discharge penalties may be incurred for any existing mortgage that is discharged prematurely.

  • MORTGAGE APPRAISAL FEE (BUYER) - For mortgages that are not insured, a lender may require a property appraisal, the costs of which may vary with the location and complexity of the appraisal.

  • PROPERTY TAXES (BUYER) - Property taxes can be incorporated into a mortgage. With a high-ratio mortgage, a lender may require property tax installments added to mortgage payments. Any adjustments in property taxes will generally be outlined on the Statement of Adjustments.

  • STATEMENT OF ADJUSTMENTS (BUYER) - A Statement of Adjustments is normally prepared by the seller's lawyer, and will contain items requiring apportionment as of the closing date, the day of completion itself to be charged to the buyer. The buyer will have to reimburse the seller on a prorated basis if some bills have been prepaid beyond the closing date. Such items may include, but are not limited to, rent, property taxes, local improvement rates, unmetered public or private utility charges, non-metered cost of fuel, and mortgage interest adjustment for new or assumed mortgages. (It’s a good idea to discuss with a mortgage officer when arranging the loan to determine how interest adjustment will be handled).

  • MOVERS AND MISCELLANEOUS (BUYER/SELLER) - Don’t forget the cost of the professional moving company, or a rental truck if you move yourself. Fees for a professional mover can be higher at the end of the month and in the summer. As well, buyers may be charged a fee to hook up new services and utilities such as telephone, hydro, etc.

  • CONDOMINIUM FEES (BUYER) - Condominiums charge monthly fees for common-area maintenance, such as groundskeeping and carpet cleaning. Fees range widely depending on the type of structure. A fee may also be charged by the condominium corporation to provide a Status Certificate that contains information regarding the operational, legal and financial dimensions of the corporation.

  • WATER QUANTITY AND QUALITY CERTIFICATION (BUYER or SELLER) - For homes with well service, a fee may be charged to certify the quantity and quality of the water, the cost of which can be negotiated between the buyer and seller.

  • WETT CERTIFICATE (BUYER or SELLER) - If they are not installed and used properly, wood-burning stoves/fireplaces can pose a serious fire hazard. To reduce potential risk, your insurance company may require that your wood-burning stove be inspected by a certified Wood Energy Technical Training (WETT) technician before agreeing to provide you with homeowners insurance coverage.

    Remember your first mortgage payment is due one month after your transaction closes.

    Condo fees are always due on the first of every month.

    Property taxes are due in installments (usually 4 per year) or can be paid for you by your bank on a monthly basis.

    It is quite possible that you will purchase a new condo from floorplans.

    Remember that when you buy a new condo from floorplans, your first closing is when you occupy the suite. At this point you do not yet own the unit, you are known as an occupant. You pay the Developer an occupancy fee until the building registers with the City of Toronto.

    Rushing into buying before you have seen four to eight properties or have been very well schooled by a knowledgeable and honest real estate agent is foolhardy.

    Equally foolhardy is wasting everyone's time by dilly dallying when the right property comes your way. Be decisive and make your move.