Hidden Buyer Fees
When buying a home in Ontario, several significant costs beyond the down payment and monthly mortgage often surprise buyers. Realtors may not always detail these as part of their standard discussions.
Hidden Buyer Fees
Closing Costs (Paid Upfront)
These fees are are in addition to the purchase price of the and are due on or before your closing date (move in date)
Land Transfer Tax (LTT): This is one of the biggest "hidden" costs. Ontario has a provincial LTT, and the city of Toronto has an additional municipal LTT. The tax is calculated on a sliding scale based on the property's value and can amount to tens of thousands of dollars. First-time homebuyers may be eligible for a rebate, but they still need to cover a portion of the tax initially.
Legal Fees and Disbursements: You will need a real estate lawyer to manage the paperwork, ensure a clear title, and handle the transfer of funds and ownership registration. Fees can range from $1,500 to $3,000+, plus disbursements (out-of-pocket expenses for items like title searches and courier services).
Mortgage Default Insurance (CMHC Insurance) PST: If your down payment is less than 20%, you must pay for mortgage default insurance. While the premium is usually added to your mortgage loan amount, the Provincial Sales Tax (PST) on the premium must be paid upfront in cash at closing.
Appraisal Fee: Your lender may require a property appraisal to confirm the home's market value before approving the mortgage. This fee (typically $300-$600) is paid by the buyer.
Home Inspection Fee: While not mandatory, it is highly recommended to hire a certified inspector to uncover potential issues before finalizing the purchase. This upfront cost generally ranges from $300 to $1,000.
Title Insurance: This one-time fee (around $250) protects you and your lender against issues like title fraud, zoning non-compliance, or survey errors.
Land Survey Fee: Your lender might require a current land survey that shows the property boundaries. If an existing survey is not available or acceptable, a new one can cost $1,000 to $2,000+.
Status Certificate Fee (for condos): When buying a condo, your lawyer will review the building's status certificate to check its financial health and any potential issues. The cost for the certificate is typically around $100-$150.
Adjustments: You may have to reimburse the seller for prepaid property taxes, utility bills (water, hydro), or condo fees for the period you will own the home after the closing date.
Mortgage Application Fee
Mortgage Broker Fee
Buyers Beware.
Commission Shortfall
Buyers are always responsible for the buyers agents commission. Please read...
Even if it says the seller is paying the prescribed commission. If there is any shortfall or if the seller doesn't pay then the buyer is responsible. This is stated in the Buyer Representation Agreement
Hold Over Clause
The Hold Over Clause says that even if the Buyer Representation Agreement Expires the buyer is responsible to pay the Buyer agent Commission its in one of the clauses
Sellers Beware.
Failed Sales Transaction
Seller are always responsible for the Listing agents commission. Please read...
Sellers! Read what in the contract. Did you know that the seller is responsible for the if a sold transaction is sold and it doesn't close due some fault of the seller
Read This news article
Yes, in Ontario, a seller can be forced to pay listing agent fees on a failed transaction if the failure is due to the seller's default or neglect, or if the listing agreement includes a clause stating commission is payable upon acceptance of an offer, regardless of closing. The standard OREA listing agreement states commission is payable if the transaction does not close due to the seller's failure to fulfill their obligations.
Key takeaways for sellers
Seller default: If the seller's actions, inactions, or default are the reason the deal falls through, the commission is typically owed. This can include refusing to close or failing to meet a contractual obligation.
Offer acceptance: The standard Ontario listing agreement states that commission is payable upon the buyer and seller signing an agreement to purchase, meaning it is not automatically contingent on the deal closing.
No closing does not equal no commission: A seller may be liable for commission even if the sale never closes, depending on the contract terms.
Review your contract: It is crucial to review the specific listing agreement for clauses that address what happens if the transaction does not close. Some agreements may explicitly state commission is only paid upon closing, but this is not the standard.
Legal advice: If a deal fails and the agent demands commission, it is recommended to seek legal counsel from a real estate lawyer to understand your rights and obligations based on the specific contract you signed.
Hold Over Clause
The Hold Over Clause says that even if the Listing Representation Agreement Expires the Seller is responsible to pay the Buyer agent Commission its in one of the clauses
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