Closing costs are additional expenses that you will need to pay for, between the time you make an offer and the day that you close, including: a home inspection fee, legal fees, land transfer tax, CMHC insurance.
It is suggested that most buyers prepare to budget and save another 1.5 – 4% of the purchase price of their homes, in order to cover their closing costs. When you buy a pre-construction condo unit, however, that number can be even higher.
When you buy a new condo, you may be subject to additional fees, including:
Development levies ($0 -$4,000)
New Home Warranty Plan enrolment fee ($900-$1,200)
Utility hook-up fees ($50-$500)
Assignment fees (if you sell before final closing, or flip your unit) ($3,000)
These additional costs do not apply to every pre-construction purchase, and some may even be included in the sale of the unit. During your cooling off period, have your lawyer review the Agreement of Purchase and Sale to determine which additional closing costs you will incur. It is best to use a real estate lawyer who has experience dealing with the pre construction condos, as they would be able to anticipate any issues that they have had in the past while closing other client’s pre construction condo deals.
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