Typical Costs When Buying a Home

I have talked to many first time home buyers that did not realize the extent of closing costs on a real-estate transaction.  It has left many first time home buyers strapped for cash for at least 4 months after purchasing their first home. 

Rule of thumb...

At a very high level...you will want to budget about 2% of the purchase price for closing costs.  That would mean $2000-$2500 on a home worth $100,000 in Saskatchewan.

Examples of Closing Costs

Land Transfer Tax

All buyers of property pay this once and new homes are exempt from this. Budget about 1% of the purchase price. The percentage is tiered depending on the price of the home.  Each province has it's own formula.  (Alberta, Saskatchewan, or rural Nova Scotia do not charge this tax).

Legal Fees

As all Lawyer fees, these are complex to understand.  It is important that you clarify all charges from your lawyer.  Ask questions as to the detail.  You should budget at least $1000 - $1500.

Home Inspection and Appraisal

Your bank will require both a home inspection and an appraisal.  Both are to your benefit, ensuring that the home you purchased is in good shape, and that you did not pay too much for it.  Between the two, budget about $500.

Interest, property tax and other adjustments

Depending on the closing date you may have other miscellaneous costs that will sneak up on you.  The two that come to mind are interest and property tax adjustments.  Budget about $500.