Closing Costs... WTF?

One of the most common questions I get as an agent is What are Closing Costs? How much can I expect to spend? The answer is difficult - it is different for every transaction. But here is a baseline for what you can expect:

Lawyer fees: On a buyer side a lawyer will typically charge anywhere from $1200-$1600 plus disbursements (costs of printing, courier services, paperclips etc). On a listing side a lawyer will charge anywhere from $700-$1100 plus disbursements for their service.

Down payment balance: Typically a deposit is provided at the offer stage, which is deducted from the total amount of the down payment. The balance would be due when meeting with the lawyer prior to possession. Example: on a $400,000 house, a 5% downpayment would be $20,000. If a $5,000 deposit was provided at offer, then the balance due at the lawyer would be $15,000. All of the funds (deposit and at lawyer) go towards the total downpayment amount.

Property tax adjustments: The seller and the buyer would each be responsible for the property taxes for the time that they own the property. To make this easy to understand, lets say the buyers occupy on July 1 (they will own for 50% of the year) therefore they have to pay for 50% of the taxes for that year. If taxes were $4000, the buyers would have to pay the $2000 at closing.

Title Transfer Taxes: This one is sticky since it changes based on the property value AND the mortgage amount. There is a multi step formula involved so try to keep up lolz!

($50+$(Mortgage/5000))+($50+$(Sale amount/5000)) = title transfer fees

($50+$(380,000/5000))+($50+(400,000/5000)) = $256

All of these costs would be paid when the buyers meet with the lawyers (about 1-2 weeks before possession day). The sellers typically are only responsible for paying the lawyer fees and the property taxes (if they haven’t been paid yet for the year).

So lets add this up: $1400 (lawyer) + $15,000 (downpayment balance) + $2000 (property tax adjustment) + $256 (title transfer fees) = $18,656 on a $400,000 house. So you would need a minimum of $23,656 in order to make a purchase on a $400,000 home. Make sense?

If you need more clarity, give me a call!

April Sturko - C21 Masters

Spring Home Maintenance Checklist

Spring is (finally) here! The snow is melting, but the sun starts to shed some light on what we might need to add to our “spring to do” list.

I’ve put together a Spring Home Maintenance Check List so you can save time trying to decide what needs attention and can get to enjoying the beginning of patio season! 

o Clean Gutters & Downspouts - Pull leaves and debris from your gutters and downspouts. Reattach or unclip your downspouts. Run some water on the roof with a hose and check everything is draining properly. Repair leaks if present.
o Roof – Inspect shingles, flashing, eaves, soffits & schedule repairs as needed.
o Siding & Trim – Pressure wash your siding and check any wood for weathering or peeling. If paint is peeling, scrape loose paint chips and sand surface area. Prime and paint as needed. 
o Deck & Porches – Check railings & stairs are secure. Look for deterioration and repaint or treat as needed.
o Foundation, Masonry & Chimney – Check for damage & cracks and schedule repairs if required. 
o Landscaping - Check to make sure grade is keeping water away from house. Cut back & trim vegetation.
o Windows & Screens – Clean screening or patch/replace if larger holes are present. Check hardware/hinges and for damage to frames. Now is a good time to clean the inside & outside of your windows as well!
o Hose & Sprinklers – Test and ensure no leaks, schedule repairs as necessary.
o Air Conditioner – Schedule inspection and servicing as needed.
o Smoke & Carbon Monoxide Detectors – Test & replace batteries or detectors if expired.
o Furnace – Schedule inspection & cleaning. Replace filter
o Clean Fireplace
o Attic – Check for moisture & mould. 
o Test Kitchen & Bath Fans

Print this page and post it on your fridge to use as a guide to complete your spring maintenance checklist! 

I want to BUY a HOUSE! Where do I start?

Should I talk with a bank before looking at homes?
The answer to the question is YES! First and foremost, talking with a bank before looking at homes can help you understand exactly how much you can afford. There is no reason to look at homes that are listed outside your budget!  It also helps to put your best foot forward - they may ask you to pay down some debt or work on improving your credit before you qualify and if these steps are required but aren't taken that results heartbreak when the bank says no.  So START with talking to the bank. 

Usually your REALTOR has a refined list of lenders that they can refer to you - you always want to work with a lender (Mobile Mortgage Advisor or Mortgage Broker) that you can trust since the work that they do will ultimately decide whether you get your approval or not.  So a trusted lender is IMPORTANT!