Across the GTA we can see that the real estate industry is prospering in growth and the market is seeing major sales despite the global pandemic, many millennials are taking a plunge into the homeownership industry, introducing themselves to long-term investments that they can make leading to future growth. Whether you are buying a house, condo, townhome, unit, etc. the process can be daunting especially when you are relatively new and unfamiliar with the industry.
Down- Payment and Other Expenses
Prior to shopping for real estate properties, it is important to keep in mind that you need money for a down payment. Especially being a first-time buyer, you may not have these access funds lying around from the sale of a previous home. Down payment is the money required to secure a purchase of a home. Moreover, the larger the down payment you put towards a property, the easier the process becomes to secure a mortgage loan.
Conceptually the down – payment is essentially the top priority for securing a property but it is also important to bare in mind, there are other costs. There are legal and administrative fees that are required for the closing of a transaction. Hiring a professional lawyer aids and facilitates the real estate transaction process because as purchasers or sellers we are often unaware of the formalities required.
Some of the closing costs included:
- Land Transfer Tax: This tax is calculated as a percentage based on the cost of the property. This tax varies depending on the province and municipality.
- Legal fees: for the purpose of document preparation, there are legal fees and disbursements involved.
- Title insurance: Required by most lenders to protect them in case of an ownership dispute that may arise later on. This title insurance is typically purchased through the lawyer.
- Mortgage default insurance and PST: This is a mandatory insurance policy required for the purchase of a home generally with a less than 20% down payment.
- GST/ HST on a New Home Purchase: Buying a new home, condo, GST and HST is added to the purchase price.
- Home Inspection: While it is not mandatory for the closing of the transaction, it is normally recommended prior to the closing of a property. These inspections reveal problems that may not be visible.
While this list is not exhaustive, as it does not include property taxes or bills, it gives you a general idea of how the purchase/ selling of home functions.
Buying or Selling During the Pandemic
Some individuals may be reluctant to purchase or sell property during the pandemic, but it is important to note how the real estate industry has adapted to safety protocol. Many procedures are put into place that allows for a safely facilitated transaction.
If you have any questions about buying or selling residential or commercial property in Ontario, please do not hesitate to contact Minhas Lawyer TODAY. We know how overwhelming the process can be especially for first-time buyers, that is why we are with you every step of the way. We will with our experience team aid in your transaction process and work together!
Minhas Lawyers LLP is a multi-practice law firm based in Mississauga. We advise and represent clients across various segments and practice areas.
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