Buyer's Closing Costs to keep in Mind - Provided by Marcel Polderman

After we have successfully negotiated the Sale Price of a property, you will need to know what other costs there are that you will be responsible to pay. The following list is a general guide of expenses associated with a typical purchase and sale.

It is advised that you discuss with Marcel, which of the following applies in your particular circumstance.

Note: Any prices suggested are estimates only and need to be verified.

Property Purchase Tax - For buyers this is the largest cash outlay above the purchase price. This tax in the Province of British Columbia is charged on the Purchase Price of the Property. It amounts to 1% on the first $200,000 of the sale price and 2% on all amounts over $200,000. There are exemptions for first time buyers.

Goods & Services Tax - All New Construction has GST charged on the purchase price. This charge is usually included in your mortgage and therefore not a cash outlay. Although the GST rate is 7%, there is a rebate for all buyers, provided the property is used as their principal residence. Houses costing up to $350,000 will receive a rebate of 2.52%. On houses costing between $350,000 and $450,000 the rebate will be gradually reduced. There is no rebate available for house costing more than $450,000.

Building Inspection - Recommended for the purchase of any property, the cost will vary depending on the features of the property and the individual Inspection Companies. Buyers are strongly urged to obtain an inspection and should select Inspection Companies that are Bonded, members of a Home Inspection Association, and those that will supply a written report.

Property Taxes - Property taxes are due and payable on July 1st of each year. If the taxes for the current year have been paid, a pro-rated amount will be charged to the Buyer. If the taxes have not been paid, the sellers will be charged a pro-rated amount. The Statement of adjustments will be done by the lawyers prior to completion of the sale.

Appraisal Fees - Depending on the size of the Buyer's mortgage, the lending institution usually requires an appraisal of the Subject Property. The fee for this appraisal usually runs between $200 and $300, paid by the Buyer.

Survey Fee - Unless there is a recent copy of a Survey Certificate that is acceptable to the Bank, the Buyer will be responsible for the cost of having the property surveyed. This cost usually runs from $250 to $300.

Mortgage Application Fee - In some instances the lending institution will charge an application fee. The amounts of this fee can vary. Buyers are advised to determine the fee if one is applicable.

Mortgage Insurance - When the size of the Mortgage exceeds 75% of the purchase price, the Mortgage must be insured. The premium ranges from ½% to 3.75% depending on the size of the Mortgage. Whatever the amount, it will be incorporated into the final Mortgage amount, so there is not an actual cash outlay.

Fire/Liability Insurance - Mortgage lenders will usually require a buyer to have insurance coverage on the mortgage. Life insurance on the mortgage is also available and some lenders may suggest that it is a necessity.

Legal Fees - To facilitate the proper conveyance of the property, either a Lawyer or a Notary should be used. The fees may vary from professional to professional and will usually range from $400 to $800.

Miscellaneous Costs - As always there are always the small various costs that always seem to be forgotten until the last moment. Remember that there will be hook up charges for things like Cablevision, Hydro, and Telephone. The cost of moving could vary depending on whether you use a professional company or a rent-a-truck, not to mention the cost of food and beverages for friends or family that help you move.

GST - Separate from the purchase of new property, all services provided in the process will be taxable. From the list above this would include the legal fees, building inspections, site surveys, and appraisals.