Closing Costs when Buying a Home in Calgary
So you’re thinking about buying a home in Calgary and are being diligent with your budget. You’ve got your mortgage approval, but what about other additional costs associated with buying a property?
Closing costs are another expense you’ll want to consider in your total budget. But what are closing costs anyways? The more you know about these the more prepared you’ll be when buying a home in Calgary.
What Are Closing Costs?
Closing costs are fees that pay for administrative work necessary for certain steps of the home buying process. This typically includes work performed by your mortgage lender, real estate lawyer and insurance agent.
The total cost for such can vary greatly depending on the type of home, its price and a number of other factors such as location. However, most home buyers will spend $1,500-$3,000 on closing costs.
It’s important for any buyer to include these additional costs into their budget when thinking about making a move in real estate. This is especially so for first-time home buyers who may need to be more strict with their expenses than other types of buyers.
Types of Closing Costs
What follows is a list of closing costs usually associated with a real estate purchase and a general idea as to how much they are in the Calgary housing market.
Real Estate Lawyer
You may know a real estate attorney you want to use for your next transaction. However, if you don’t, your REALTOR® will happily refer you to one to use. The responsibilities of the lawyer is to draft the necessary paperwork, review the documentation and check the title.
The total cost for legal fees can vary depending on the home price and if you’re getting a mortgage. Another factor is how much experience the lawyer has and what kind of reputation they uphold in the industry. Closing costs associated with the attorney also depend on if you’re buying, selling or financing.
After all is said and done, many people end up spending around $1,500 – $2,000 in total legal fees plus common disbursement’s to their lawyer. This won’t include adjustments like taxes that sometimes are pro-rated depending on how it’s been paid by the seller.
In almost all resale transactions there’s no GST applicable. You’ll only have to pay GST on the purchase price of your home if it’s a new build and then there’s a rebate for homes under $450,000.
New Home Warranty Fee
The fee for new home warranty is only applicable for buyers who are purchasing new construction. This warranty is typically included on top of the purchase price of the home, although in some instances the home builder may request you purchase it separately.
- Learn more about the Alberta New Home Buyer Protection Act
Title insurance ensures that you, the home owner, are protcited from a number of issues relating to the closing and title of your new home. This doesn’t happen often, but it’s usually inexpensive enough that it’s worth considering.
Not Sure About Closing Costs? Ask Your REALTOR®!
Whenever you aren’t sure about how much closing costs will be for your next home purchase, talk to an experienced real estate agent / REALTOR® for help! As industry professionals, they are there to help you from the start of your transaction until the end.
A good agent will help you step-by-step and make sure you have all the information necessary to make the best decisions. That includes giving you a good idea as to how much cash you’ll need in your budget for closing costs. This is especially important for first-time home buyers!
- Also see these 8 Common Mistakes Made by First Time Home Buyers
Questions about Closing Costs in Calgary?
As a highly experienced REMAX real estate agent and REALTOR® in Calgary, I guarantee to provide you with unparalleled service, advice and third-party representation while taking care of all the details throughout your next transaction!
Call anytime at 403-370-4180 or message me below for a quick, if not immediate response. I am looking forward to helping you accomplish your real estate plans!