A detached home in Toronto or the GTA this days is easily over $1 million, and when the asset has such a huge price tag, the closing costs associated with buying can creep up on you. This can result in thousands of dollars of fees you completely forgot about.

Richard Silver, Senior Vice President – Sales at Sotheby’s International Realty Canada, recommends that, “a buyer should have on hand about 5% of the purchase price—4% for taxes and roughly 1% for lawyer fees.”

While tax and legal fees may be the largest costs to closing, they’re not the only ones. Other costs include home appraisal, a land survey, home inspection fees, mortgage default insurance.

Taxes (4%-15% of the purchase price)

Possibly the largest closing fee that the buyer is responsible for is the Land Transfer Tax. This is a provincial and/or municipal tax that is a percentage of the home’s purchase price, and usually only affects resale homes—though having to pay Land Transfer Tax on a new construction is not out of the question.The exact percentage of the tax varies from province to province and municipality to municipality.

Toronto buyers have to pay both the Ontario (provincial) land transfer tax and Toronto (municipal) land transfer tax.

As Richard says:

In the City of Toronto the [Land Transfer Tax] amounts to 4%—2% for the province and 2% for the city. If you are a foreign buyer, it jumps to 15%.

At the moment, the system works in tiers marginally and each portion of your home’s value is taxed at a different percentage, but this system averages out to approximately 4% in land transfer taxes.

You can also use our calculator to figure out how much are you about to pay.

Land Transfer Tax is expensive, but first-time homebuyers can find solace in various rebates. First-time homebuyers get a full tax refund for the first $368,333 on the taxable purchase price from the province and on the first $400,000 from the city. The next $400,000 to $2 million can receive a maximum tax rebate of $4,000 from the province and $4,475 from the city. And lastly, the taxable amount over $2 million can receive up to a $4,000 tax rebate from the province and a up to another $4,475 from the city.

Who is eligible for Ontario/Toronto land transfer tax refund?

• first-time home buyer
• must be a Canadian citizen or a permanent resident of Canada, 18 years or older
• must occupy the home within 9 months of buying
• cannot have owned a home anywhere in the world
• their spouse could be a previous homeowner but cannot have owned a house while being married to the applicant
• in case of newly constructed homes, they must be eligible for home warranty
• must apply for the rebate within 18 months of buying

The tax rebate application should include:

• a completed Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible Homes
• a copy of the registered land transfer deed
• a copy of the agreement of purchase and sale
• a copy of a document proving residence (driver’s licence, phone bills..)

You can find more information about tax rebates and different scenarios here. But taxes are always changing depending on both the local and the provincial governments, so it’s advised to ask your lawyer or notary for the most recent calculations for your region to budget properly.

Another tax to keep in mind is HST. Though relatively minor, many services, such as realtors and lawyers, required during the closing process charge a standard 13% sales tax. And a 13% sales tax is also required in the purchase of a new home.

Lawyers and Realtors ($500-1,000)

Legal fees can vary between $500-$1,000 depending on the purchase price of the home and the lawyer. Some lawyers, similar to the Land Transfer Tax, also charge based on a tiered system.

This fee covers:

• title search
• title insurance
• managing the paperwork in obtaining a mortgage
• verifying the paperwork of the seller’s lawyer.

A lawyer is an important expense because they help you avoid trouble and are a preventative measure.

Additionally, while a buyer may not always hire a realtor, they still pay for one, which can amount to 3%-7% of the closing costs. Silver says:

The buyer does, in essence, pay one half of the [realtor’s] commission. But it flows through to the seller through inclusion in the asking price.

Home appraisal ($300-$500)

A home appraiser is often needed to provide a professional opinion about the value of the property being purchased and is required by the lender to see if the purchase price is fair. The lender needs this information to determine whether to provide the buyer with a mortgage. An appraiser usually costs $300-$500 but is something the lender often covers. The lender, in the end, provides a percentage of what the appraiser determines is a fair market price.

Home inspection ($500)

A home inspector is similar to an appraiser but evaluates things like the home’s structure and system to see if there are any issues before you purchase it. Although not mandatory, it’s common for purchase offers to be firm upon a positive home inspection report. Without a home inspection, you could discover poor water quality due to bleeding pipes, bad roofing, or poor foundation when it’s too late.

Home inspection costs depend on the size of the house, and for the typical suburban home, it can be around $500. Some buyers try to skip out on this cost, but Silver warns to never skip on an inspection:

If you [skip the home inspection] then you may miss out on things that need to be fixed and that could be fixed by the seller in the negotiation. Also, because no house is perfect, it gives you a schedule for upcoming expenses.

Land survey ($1,000-$2,000)

Lastly, a land survey is something to keep in mind. Between the buyer and seller, this cost may be split or given to one party depending on how the purchase agreement plays out. However, you only need a land survey if the seller cannot produce an up-to-date survey, and title insurance can replace the need for a land survey. If you do plan to get one, it costs $1,000-$2,000 depending on the size of the property. Similar to the home appraisal, it’s required by the lender.

Mortgage default insurance (0.6%-6.5% of the amount you borrow)

When buying a home, a 20% downpayment is ideal, but if you’ve decided to go less than 20% you’ll have to buy mortgage default insurance which adds another expense to your purchase. Mortgage default insurance is there to protect the lender from high-ratio mortgages (i.e., less than a 20% downpayment) in case you can no longer make payments.

The insurance costs between 0.6% and 6.5% of the amount you borrow and is payable upon closing or added to your monthly mortgage payments. If you decide to add it to your monthly mortgage payments, know that there will be interest. Where your insurance falls between that 0.6%-to-6.5% range depends on how much of a down payment you’ve made.

For example, on a $500,000 mortgage with a 10% down payment ($50,000), a $450,000 mortgage is required. And a 4% insurance premium would result in an added expense of $18,000.

These are only the major closing costs for a buyer, but remember that moving into a new home, especially if it’s your first home, results in additional costs like moving and hydro. Make sure to plan out a budget for all these things and to not only focus on that massive purchase price. You don’t want to be in for a surprise. Silver warns:

Moving day can be one of the worst days of your life…Do not underestimate it and get all the help you can. Remember the adage: You get what you pay for.

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Richard was recently a guest on Michael Lafido’s podcast show called Luxury Listing Specialist Podcast. They talked about Richard’s career, his beginnings in real estate, building and working in teams, the importance of networking and also about dealing with luxury properties.

Key Takeaways:

• Change is essential, and should be embraced.
• Diversity of agents with regards to race, religion, age, culture and language only stands to benefit your business. This is particularly true in multicultural societies.
• Use of new technologies is vital, from testing personalities to marketing homes.

Listen to the podcast below.

Michael Lafido is a top-producing Realtor and real estate consultant with over sixteen years of experience in the industry. Michael’s a best selling author and his marketing has been featured worldwide. He is the founder of the nationally recognized “Verified House” Program for home sellers. He is a leading authority in the real estate field and is highly sought after as a national speaker.

Jim was recently interviewed for CityNews.ca about the current state of the Toronto real estate market and the predictions for 2019. Watch the whole interview below or read the article here.

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One of our recent listings was just featured in The Globe and Mail Under done deals.

260 Russell Hill Rd., No. 25, Toronto

• Asking price: $2,588,000
• Selling price: $2.5-million
• Previous selling price: $1.5-million (2007)
• Taxes: $10,018 (2018)
• Days on the market: Seven
• Listing and co-op agents: Richard Silver and Jim Burtnick, Sotheby’s International Realty Canada

This three-bedroom end unit in an upscale townhouse complex abutting Sir Winston Churchill Park had about three dozen house hunters trod through in September.

“It’s a condominium townhouse in an area where there are not a lot of them, so it’s a great house for downsizers … who wanted to get into something around 2,800 to 3,000 square feet with parking and a little bit of a backyard,” agent Richard Silver said.“ So there were a couple of offers.”

More about 260 Russell Hill Road 25

WHAT THEY GOT

The nearly 20-year-old structure offers several luxuries, from an elevator and curved staircase connecting all four levels to direct access to two-car parking from the basement.

Large social gatherings can be held inside or out. There is a traditional dining room and formal entertaining areas with fireplaces on the main and second floors, as well as a private terrace off the eat-in kitchen.

Utilities are not included in monthly maintenance fees of $1,355.

More about 260 Russell Hill Road 25

THE AGENT’S TAKE

“It’s just off St. Clair and it’s right next to … a great park,” Mr. Silver said.

“A lot of townhouses only have light at the front or back, but this one – because it was an end unit – has light on three sides.

“One of the other advantages to that house is it has an interior elevator, so as people age, if they wanted to stay in the house, they could,” Mr. Silver said.

More about 260 Russell Hill Road 25

Originally posted in The Globe and Mail, December 17, 2018.

When the Supreme Court of Canada refused to hear a recent case involving the Toronto Real Estate Board (TREB) concerning whether to make sales information from its Multiple Listing Service (MLS) publicly available, it appeared that the matter had been settled once and for all. Or had it?

Many real estate professionals continue to express concerns about a 2016 ruling by Canada’s Competition Tribunal that ordered TREB to allow online access to sales data found on MLS that had previously only been accessible to Board members. The Competition Bureau’s ruling makes the negotiated price available before closing, along with the seller’s name and commission paid to the selling agent. That ruling sparked a series of legal challenges that wound their way up to the country`s highest court before it declined to hear the matter.

“The decision by the Supreme Court effectively upheld the original ruling by the Competition Tribunal, meaning that the real estate information on MLS is now being made available online through a realtor’s virtual office website,” says Richard Silver, a Global Real Estate Advisor at Sotheby’s International Realty in Toronto. “Access is password protected to the client and provided by the agent.”

Sellers are concerned about their privacy

For many in the industry, this development represents a further loss of control at a time when real estate agents in Canada are under assault from websites that enable people to list their home for sale. For others, the situation could compromise the privacy of sellers in Canada’s biggest city. While people might like seeing information about their neighbour’s home online, they are generally protective of their own privacy. There is now a move afoot by many privacy concerned sellers to move to exclusive listings rather than MLS.

For years, the MLS served as a valuable repository of information on homes in the Greater Toronto Area. It was accessible to real estate agents who were members of TREB. The MLS has information on homes for sale, as well as historical information on important items such as previous sale prices. Real estate agents used this information to determine the fair market value of a house or property, and to advise their clients appropriately when setting a sales price or making a purchase offer. Richard says:

The information contained in MLS had always been accessible through a TREB member. But now, with TREB’s legal appeals exhausted, house and property information are likely to end up on any number of websites and online databases.

People looking to buy a home or land are now free to do their own research, meaning they can decide for themselves how much to pay for a house, condo or acreage. The question that continues to be debated within the real estate industry is whether this situation represents a victory for democracy and the open and transparent sharing of information, or a threat to peoples’ privacy.

Sold data becomes publicly available to everyone

Sold data is publicly available after closing to everyone through the Municipal Property Assessment Corporation (MPAC) and Geowearhouse. The concern is about displaying negotiated prices online prior to closing. TREB does not get notified of closed prices, and sometimes prices change at time of closing.

Ultimately, how this shakes out and its impacts depend on who you are in the debate. Going forward, realtors will have to adapt and be creative to survive in this new world order. Real estate agents continue to offer valuable services ranging from logistics and home staging to negotiating tactics and contract development. But now, agents may also see one of their roles as being guardians of their clients’ privacy. Realtors must be more of an interpreter of the myriad of data that is out there and tie it to neighbourhood knowledge.

It’s less about the search these days and more about the interpretation of the available data

Many realtors have already become less about searching for properties and focus more on interpreting real estate data for their clients. That focus enables agents to provide value added services that are desired by people buying or selling a home – many of whom may choose a private listing to safeguard their privacy.

“In the end, all parties involved in real estate transactions in Greater Toronto will have to change their behaviour and how they navigate what remains the largest and most significant purchase of most people’s lives,” says Mr. Silver.

Realtors can still play a role, but it may prove to be more of an advisory one than directing a sale or purchase from start-to-finish as in the past. After all, the search has been minimized in importance in recent years as data has become more readily available to consumers.

Another interesting aspect in all of this is the role that technology is playing in the evolution of Canada’s real estate industry. Realtor.ca and U.S-based Zillow are moving quickly to make real estate information in Greater Toronto available – and seeing huge spikes in their web traffic as a result. The future, at this point, seems uncharted and exciting.

What is clear is that there is no escaping the future, or present for that matter. Now that a precedent has been set with TREB – Canada’s largest real estate board – most industry analysts expect that it is only a matter of time before other real estate boards are also challenged and forced to make sales and other information publicly available. As always, it is best to be ahead of the curve than behind it in these matters.

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Krystle Ng-A-Mann is a Toronto-based fashion, lifestyle, and food blogger. She writes for her website, www.dineandfash.com, and is also well known for her Instagram, where she has over 27,000 followers! Before her journey into blogging, Ng-A-Mann spent close to a decade as a corporate lawyer at some of Toronto’s best firms. She now works full-time as a blogger.

Can you tell our readers a bit about yourself and how you went from law to blogging?

I’ve been blogging full time since June of last year. Prior to blogging, I practiced law for nine years. I first got into blogging through Instagram. Whenever I went out, I would take pictures of my food for my Instagram account, and I officially started “insta-blogging” around November or December of 2015. Originally, my Instagram was a personal, private account, and I wanted to transition into a public account, but was a bit nervous to. Once I figured out a better name to change my account to, I decided to make it public and post more frequently on it. I began posting consistently, and the account began to get some traction. A few months later, in February 2016, I launched my actual blog—Dineandfash.com. By about November/December 2016, I began to generate income from my blog and Instagram account.

Once I really got into blogging, I felt like I was working two full-time jobs. I put all my spare time into my blog, whether it was shooting and editing photos, writing blog posts, or answering emails. It all got a little hectic, and I burnt myself out once or twice. I was also doing this while planning my wedding!

I always thought that it would be nice to leave law to blog full time but told myself to see where it might be able to go first. By May of 2017, I realized I was working way too much and had a wedding coming up—I needed to be present. At this point, I had had about three months’ worth of steady income from blogging and saw it’s possible to earn a full-time living from blogging, if it continued on that way. So I decided to make the jump and leave law.

I didn’t plan my exit or have a financial plan. I took a leap of faith and now I hope I never have to go back to law. I’ve been running my blog full time for a year and a bit, and it has really been busy. It’s getting to a point where I’m looking to expand and take on additional writers or an assistant to keep up with everything.

Photo by Krystle Ng-A-Mann

What are some of your favoruite places in Toronto?

This is actually a tough question to ask a Toronto food blogger! In no particular order: KOST Toronto, Lavelle & Hotel X Toronto for great rooftops; Buca for Italian; Kiin, Pai & Sukhothai restaurants for the best Thai in the city; Café Cancan, Oretta, SoSo Food Club, Chubby’s Jamaican Kitchen for cutest/prettiest restaurants interiors; Grand Electric, La Carnita & Playa Cabana restaurants for good Mexican food; Electric Island for awesome music festival; Diner en Blanc is one of my favourite yearly events; Sofia Yorkville for a pretty patio and good food; Dineen Outpost for cutest coffee shop; Her Majesty’s Pleasure for a beautiful place to get your nails done and sip champagne; and Bacchanal for good French food and a pretty interior.

Where did the name Dine & Fash come from?

The name Dine & Fash is a play on dine and dash. I wanted something that was witty and had to do with eating. I thought about a play on Latin terms in law, or possibly combining “lawyer” and “foodie” somehow. But then I decided on Dine and Fash: dine for food and fash for fashion, which is another of my interests. When I thought of the name, I was on the subway on my way to work. As soon as I got off the subway, I checked to see if it was available and jumped on it!

Among the photos on your Instagram and blog, which one had the craziest story behind it?

Earlier this year, I was working with Presidents Choice. I’d done a few campaigns with them and they’re really great to work with, so I wanted to go above and beyond. This campaign focused on al fresco dining, and I went all out. I orchestrated a whole Bohemian picnic in the park in less than a week, including food, décor and little details to make it special. It involved so many aspects that I had to juggle on my own (something a team of people would normally put together for a print advertising campaign).

I had to get additional food and materials, plan the location, line up a friend and a photographer. I personally picked up and arranged table cloths, lavender, plates, napkins, and flowers. All the food was then prepared by me the night before, and on the day of, I packed it all into suitcases and headed to the park.

The way it came together, I was really proud of it. As mentioned, normally a stylized shoot like this would need a whole team. You’d have food stylist setting up the food, makeup teams, photography teams etc… But when you’re a blogger, you have to wear all these hats, yourself.

Photo by Krystle Ng-A-Mann

How would your blog change if money no longer mattered?

If money didn’t matter, I don’t think it would change the direction of my blog. I’m really happy with where I’m at. Three years ago, I would have never imagined that I could make a living off of this. The blog is about my life and what I do, and that’s why it’s such a privilege for me to do this.

In your career as a blogger, where you need to document almost every moment of your life, is there such a thing as work-life balance?

Believe it or not, I work more now than when I worked in law. It sounds wild, but it’s true. In certain situations, most people would put away all their work to enjoy their personal time. However, I still feel the need to work because of the nature of what I do. I do my best to not impede on enjoying my personal life too much. Although I work around the clock, because I enjoy doing it, it doesn’t feel like work.

How did your parents react when you told them that you were leaving law to pursue blogging full time?

My parents kind of knew that my jump to full-time blogging was coming. I had been thinking about it for a while, and when the blog was gaining a lot of traction, it was a light at the end of the tunnel. I have a good relationship with my parents, and I kept them informed about how I was feeling. My parents just wanted to make sure that I wouldn’t run into any financial issues if I were to leave my job.

Initially, they were worried, especially since blogging isn’t something they’re used to. My parents are used to the traditional approach of getting a good education and then a good (‘professional’) job. But in this day and age, there are so many ways to make a good living, while also feeling fulfilled in your career. I think there’s been a real shift, whereas for our parent’s generation, you had to be in a profession and make a good amount of money to be happy.

When they saw me working with different brands like Tim Hortons, which my dad loves, that was their idea of ‘making it’. And when they saw I was able to pay all my bills and live comfortably in this career, they came around. They could also tell I’m really passionate about it; and I think ultimately, they just want all their kids to be happy.

Photo by Krystle Ng-A-Mann

Did you find any challenges going from legal writing to blog writing?

Yes and no.

Out of all the bloggers I know, I probably write in the most formal way—I can never really divorce that part of myself because of all my years in law. I’m so used to writing that way (i.e. a bit more formally). However, when you have a blog or Instagram account, you should also write in a genuine way, in your own unique voice and also in a way that is relatable to your audience. I’m still learning to do this and I think part of the blogging journey is finding your unique voice.

I am thankful for my professional background, though. I’ve been told by several clients and brands that they are really impressed by my professionalism and they enjoy dealing with me.

What skills did you learn as a lawyer that helped you in your career as a blogger?

One thing that law taught me was to treat everything with professionalism and to prioritize. I treat my days like a workday. I’ll wake up at a certain time—at 6:00am or 6:30am—and go to the gym. I’m in front of my computer by 8:30am or 9:00am answering emails and writing blogs.

Contract negotiation and contract reading are two important skills I learned as a lawyer, as well. Probably 90%-99% of bloggers don’t understand all the contract terms or fully read their contracts. I don’t say this to make myself seem super intelligent, but it’s just that most people don’t encounter contracts in their daily lives in the same way I did when practicing corporate law.

There have been many situations where I have had extensive negotiations, whether that relates to exclusivity, or other important contract terms. I’m really happy to have my legal background, which has assisted me greatly in terms of formalizing agreement with brands.

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