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Closing Costs when buying a house or condo

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I have found that many buyers are not aware of the fact that there are additional costs (called Closing Costs) when buying a home or condo.  I had always ‘assumed’ (I know…you’re not supposed to do that),  that banks would council their clients as to the actual costs involved, but learned that this is not always so.  Blame the hectic market pace, under-staffing or any number of things, but for whatever reason, it’s not being done.

So when buyers come to me, I sometimes have to give the bad news:  Here are some of the major expenses involved when buying a home (or condo).

Closing Costs

Legal Expenses: The basic legal fees for purchasing a home run around $600.00  Now, many lawyers will quote something like $299 or $349,  but that’s the basic fee…….there will be additional expenses on top of that, so you can expect to budget around $600.00.

House Taxes: Depending on the time of year you take possession, you may have to pay the remaining taxes for that year.  In Winnipeg, our taxes run from Jan to Dec, and are paid in June.  What this means, in short, is that if you take possession after June, you will most likely have to pay a portion of the taxes, (assuming the current owner has paid up the taxes for the entire year).  If you take possession before June, you may actually get a refund from the current owner.  The joy this brings will be short-lived, however, as you will then be responsible for the full tax bill on June 30th…..So depending on WHEN you take possession, these taxes could form a major part of your closing costs.

Land Titles Transfer Tax: This one is a real beauty and easily the biggest part of the closing costs.  Every sale of a house or condo, whether a re-sale or brand new, is subject to this tax.  The kicker is that the more expensive the home, the higher the tax.

So a $90,000 home will cost you $370.00.

A $150,000 home or condo will cost you $970.00.

A $200,000 home will cost you $1720.00

For every $1000 above this price, you can add another $20.00 for our provincial coffers  (you know, to keep our roads nicely repaired and stuff like that)

So if you’re up at a $300,000 house, you’ll be facing a $3720.00 bill….

Winnipeg REALTORS® have actually been lobbying hard, for years, to try and get the Provincial Government to understand that this tax-grab is unfair.  (Keep in mind, Provincial Election is coming next year!)

Of course, the buyer needs to be aware of moving costs, and other incident expenses.

If you’re looking to purchase a house or condo, please give me a call.  I work with a lot of first-time buyers, and will take the time to explain the entire process, including all Closing Costs to you.

Bo Kauffmann   333-2202

Related articles

• Winnipeg Condo Market Report for November 2010 (bokauffmann.com)
• Winnipeg Real Estate Market Update for October 2010 (bokauffmann.com)
• Condominiums: By-laws, Reserve Funds, Condo-Documents (bokauffmann.com)

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Technorati Tags: buying, buying a house, first time buyer, Winnipeg Real Estate Market Update

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