SET UP/APPRAISAL FEES
This fee covers items such as Lender application fees, Property Appraisal fees (Appraisal is done to determine the Values of the Property for Lending Purposes), and CMHC or GE Capital application fees. Conventional mortgage fees are typically approximately $250 -$350.
PROPERTY TAX HOLDBACK
Property Taxes are required to be paid to the Municipality in advance. Due to this restriction, you may be required to place on deposit with the Lender an amount of money to ensure that there are sufficient funds to pay the first Tax Bill when received. You should ask your Mortgage Advisorr how much this will amount to in your specific case. YOU DO NOT NEED TO DISCOVER ON CLOSING DAY THAT THIS IS AN ADDITIONAL $350 EXPENSE WHICH YOU HAD NOT PREPARED FOR!
SOLICITOR’S FEE AND DISBURSEMENTS
As a general ‘Rule of Thumb,’ legal fees are considered to be approximately one percent of the purchase price; however, this can vary considerably. It is suggested that you discuss fees with your Solicitor before you proceed. You will quite often find that your Realtor will recommend a particular Solicitor, whom he or she has a good working relationship with. In this care, you are generally being referred to a Solicitor who SPECIALIZES IN REAL ESTATE PRACTICE and you will likely be charged a very fair fee, based on volume discounts though your Realtor.
DEED TRANSFER TAX
This tax varies by municipality. In Halifax Regional Municipality, it is 1.5% of the purchase price of the property; in Hants County it is 1.5%. If the property is commercial, the tax is 2.0%.
A survey of the property by an accredited Land Surveyor may be required by the Lender. This is necessary to establish that the house or structure is within the specific legal boundaries of the lot, there are no encroachments, and the property complies with local building by-laws. The requirement is actually for a “Plot Plan” or ‘Surveyor’s Certificate’ – this is usually less costly than a ‘Full Line Survey.’ In many cases you will be provided with a Plot Plan by the Seller and this may be acceptable to the Lender. You should not discuss with your Solicitor the value of this document. If you do decide to have a new Plot Plan prepared, the cost will be in the range of $300 to $500
When buying a house, you should make provision for adjustments between you and the Seller – items such as fuel, prepaid taxes, etc. will have to be reimbursed to the Seller on closing. You should discuss these costs with your Solicitor. Fuel/Oil Adjustment (200 gallons, or 909 litres, is approximately $1000.00)
The Buyer must pay his or her share of taxes from the date of closing to the next billing date. Taxes are billed in six month intervals in advance and are due in April and September of each year. The Buyer is responsible for any taxes that the Seller has pre-paid for the period of time that the Buyer will own the property. PLEASE NOTE THAT IF THE NEXT TAX BILLLING WILL ARRIVE BEFORE ENOUGH FUNDS ARE COLLECTED IN YOUR TAX ACCOUNT AT THE MORTGAGE COMPANY, MONIES TO BE SET ASIDE OR MONIES MAY BE DEDUCTED FROM THE MORTGAGE CHEQUE.
Normally mortgage interest is calculated from the first month to payment date, therefore, when you ‘close’ your transaction on a date other than the first of the month, you will pay interest from the date of closing to the first of the following month. If you are paying your mortgage on a monthly basis, your first regular monthly payment will then be due on the first of the next month. For example: If you close on May 23rd, you will pay an interest charge for the period from May 23rd to May 31st (9 days) and your first regular monthly payment will then be due on July 1st. If you have chosen to pay other than monthly, this will vary. You should have this clearly explained to you by your Mortgage Advisor so that you are prepared for your payment schedule.
You will be required, as a condition of your mortgage, to maintain adequate fire and extended coverage insurance on your property for the amount of the balance of the loan or the replacement cost of the building, whichever is less. The cost of this insurance will vary with property value, location, etc.
You should make contact with the various utility companies (telephone, cable television, water, electricity, oil, etc.) as soon as possible to ensure uninterrupted service. Some may need several weeks advance notice to make the necessary connections.
PROPERTIES ON WELL
If you are purchasing a property with a well, we strongly recommend that you personally ensure a water test is performed immediately. The Pathology Lab on University Avenue in Halifax will give you the necessary information, test bottles, etc. If you find the water unacceptable, it is essential that you notify us immediately to discuss the situation further.
PROPERTIES UNDER CONSTRUCTION
If you are purchasing a property under construction, we recommend that you visit the site regularly and keep advised if the work is not progressing on schedule or if there are major problems. If you establish a good relationship with the contractor, you probably will be much happier with the end result.