A common question for anyone purchasing a home: “how much are closing costs?”. Keeping in mind that they will vary depending on the sale price of the property, lawyer you choose, and any unconventional details regarding the transaction; here’s a breakdown of what you can likely expect for closing costs and procedures in Saskatchewan.
Between the removal of conditions and your possession day, you won’t need to do much other than start packing, but you will want to meet with your lawyer to sign off on everything about one week before your possession day to ensure a smooth transition of possession of the home, and so that everything is in order prior to getting the keys (delays suck, and can cost you – ask your Realtor about this).
At your appointment with the lawyer, you will need to bring ID – preferably two pieces of ID – SGI photo ID and a SIN card, birth certificate, or credit card will suffice.
You will also have to have home insurance in place to take possession. You will want to advise your insurance agent that your lender (loss payable) is (insert name of your lender here) and include their address for insurance purposes. Please ask your insurance agent to fax or email the confirmation of this to your lawyer.
You will need to confirm your purchase price and amount of deposit paid to date. Your Realtor should be sending all transaction documents to the lawyer for you. If there were any changes to the contract after original documents have been sent, they will need to send those to the lawyer immediately.
Your lender will advise your lawyer the amount they will advance, and a breakdown evidencing dispersal of mortgage proceeds further noting the PST payable on your insurance premium (if questions on this, please follow up with your mortgage specialist for further explanation)). If all is correct, your lawyer will need a further bank draft for the balance of the down payment amount brought to the appointment. That bank draft will be made payable to the law firm. You must go to your bank to have this prepared.
Please also bring in a cheque book with you as your lawyer must collect closing costs (legal fees and land titles fees). When you come in to sign, your lawyer will fully elaborate on why they are collecting that amount.
Lets break down those closing costs a bit further using the example of a simple sale which is most often the case:
- Legal Fees – as a buyer, you can probably expect to pay around $800 – $1000 (plus taxes) *legal fees are lower when no mortgage is required. Refer to the trusted professionals page here and contact a lawyer for a quote for services.
- Land Title Fees – The Saskatchewan government (ISC) will charge 0.3% of the purchase price to have title transferred into your name(s). You would typically pay this amount to your lawyer along with the rest of the costs, as well as $160.00 to register the bank’s mortgage at Land Titles. Your lender will not fund the mortgage until everything is registered at Land Titles (ie: your names being transferred onto title and the bank’s mortgage being registered on title), which is they lawyer’s job. There will also typically be another cost in the sum of $100.00 for other disbursements, which will include a tax search, title search, fax, courier, etc.
- Property Taxes & Adjustments – In addition to the above stated ‘closing costs’, there will be a tax adjustment that may result in you having to come up with more money. Specifically, if it turns out that the seller has paid for taxes for the year (City of Saskatoon municipal taxes run on a calendar year and are due and owing by June 30th of each year), the you must then ‘give’ the seller a credit for your share of taxes (adjusted based on the possession date between lawyers). Conversely, if the seller has not paid for taxes, they will have to give you a credit of their share and you will then be responsible for paying taxes to the City of Saskatoon. When you go in to see your lawyer to sign your mortgage and pay your closing costs, you will revisit the tax adjustment at that time or when your lawyer becomes aware. You can always ask your Realtor to check with the seller and find out when they have paid to.Note: If this is a house you are buying, as opposed to a townhouse or a condo, you might need something called ‘title insurance.’ This is something your lender requires if there is no valid surveyor’s certificate (or some lenders require this type of insurance regardless). If there is no valid survey, the title insurance costs approximately $250.00 based on a purchase price of $200,000.
Real Estate closing costs are much simpler when you are the seller party to a home sale. Here’s what you can expect as a seller for closing costs in Saskatchewan:
Legal Fees are approximately $600.00 on all residential dwelling sales plus taxes. In additional to legal fees, there are also disbursements (ie: closing costs other than legal fees), which include a title search, tax search, courier fees, and postage/copying/fax fees (approx. $50.00 + GST).
*These numbers are general estimates and will vary from lawyer to lawyer and law firm to law firm.