Buying a home is a significant financial decision, and understanding the various costs involved is crucial. This page will help you navigate these expenses, with a special focus on our commission structure and the factors that influence other costs in the home buying process. 

From upfront costs like down payments and deposits to ongoing expenditures such as maintenance fees and property taxes, we've got you covered. We understand that every buyer's situation is unique, and our aim is to provide you with tailored information that speaks to your specific needs and preferences. 

On this page, we'll explore each expense that you may encounter as a homebuyer, ensuring no hidden surprises along the way. 
By equipping you with this knowledge, we aim to empower you in making informed decisions, turning the complex process of buying a home into a more manageable and predictable journey.

HOW COMMISSION WORKS

This short video will explain how real estate commissions work with regards to purchasing a property in Ontario.

OUR COMMISSION STRUCTURE

As your real estate partner, we charge a 2.5% commission plus Harmonized Sales Tax (HST) for our buyer services. This rate is a reflection of our commitment to providing exceptional service and value.

WHY 2.5%?

We believe in offering a fair and competitive rate while maintaining the high quality of our services. Unlike some agents who might reduce their fees, our 2.5% commission ensures that we can dedicate the necessary time and resources to each client, providing personalized attention and expert guidance.

NEGOTIABILITY & INDUSTRY STANDARDS

While our commission is set at 2.5%, it's important to note that in Ontario, there is no standardized commission rate. Commissions are negotiable, but our firm maintains this rate to ensure consistent, high-quality service.

PAYMENT STRUCTURE

Understanding Commission Responsibilities

One of the most important aspects for you as a buyer to understand is how our commission is typically paid, and what your responsibilities are in this process.

SELLER-PAID COMMISSION

In the vast majority of real estate transactions, the buyer does not directly pay the commission. Instead, our commission is usually covered through a cooperation agreement with the seller. This means that, in standard scenarios, the seller of the property pays the commission as part of the transaction costs, relieving you, the buyer, from this financial responsibility.

HANDLING COMMISSION DISCREPANCIES

Occasionally, there might be a situation where the seller agrees to pay a commission that is lower than our agreed upon rate. In many markets, this would legally require the buyer to cover the difference between the agreed commission and the seller's offer. However, we prioritize your financial ease and satisfaction in the home buying process.

Therefore, in such instances, we will adjust our commission to match what the seller has agreed to pay. This adjustment is done once the deal is confirmed and ensures that you, as the buyer, do not incur any additional cost due to this discrepancy.

ASSOCIATED COSTS WHEN BUYING A HOME

This short video goes over the costs you should be aware of when purchasing a home in Toronto.

ASSOCIATED COSTS

Explore the costs associated with buying a home, including down payments, deposits, mortgage loan insurance, land transfer taxes, legal fees, and more.

DOWN PAYMENT AND DEPOSITS

The down payment is a critical part of your home purchase. It's usually 5% to 20% of the home's purchase price, impacting your mortgage size and the need for mortgage loan insurance.

DEPOSITS

A deposit, paid when you make an offer, is part of your down payment. It shows your commitment to the purchase. The amount can vary, but it's typically 5% of the purchase price.

MORTGAGE LOAN INSURANCE

If your down payment is less than 20%, you'll need mortgage loan insurance. This insurance protects the lender in case of default and can add to your borrowing costs.

APPRAISAL FEE

Lenders may require a property appraisal to assess its value. This fee usually ranges from $300 to $500.

HOME INSPECTION

While optional, a home inspection (typically costing between $300 and $600) is advisable to identify potential issues with the property.

MAINTENANCE FEES FOR CONDOS

If buying a condo, monthly maintenance fees are essential to consider. These fees cover building upkeep and vary depending on the property.

LAND TRANSFER TAX (LTT) IN TORONTO

Purchasing property in Toronto involves paying two types of Land Transfer Taxes:

  • Provincial LTT: This is standard across Ontario.
  • Municipal LTT: Exclusive to Toronto, this is an additional tax imposed by the city.

KEY POINTS FOR TORONTO BUYERS:

  • Dual Tax Burden: Buyers in Toronto must budget for both the provincial and municipal LTTs, resulting in a higher overall tax payment compared to other regions.
  • First-Time Buyer Rebates: Rebates are available for both taxes for eligible first-time buyers, which can help offset some of the costs.

PROPERTY TAXES

Another critical expense to consider when purchasing a home is property taxes. This ongoing cost is an important part of your budgeting as a homeowner.

PROPERTY TAXES EXPLAINED:

  • Annual Expense: Property taxes are levied annually by the local municipality and are based on the assessed value of your property.
  • Impact on Monthly Costs: For many homeowners, property taxes are included in the monthly mortgage payment and then paid by the lender to the municipality.
  • Varies by Location: The rate of property tax can vary significantly depending on the municipality and the specific area within Toronto.

IMPORTANCE FOR BUYERS:

  • Budget Consideration: When calculating your home-buying budget, it’s essential to factor in property taxes as they can substantially affect your annual and monthly expenses.
  • Pre-Closing Adjustments: Often, property taxes are prorated on closing. If the seller has prepaid taxes for the period beyond the closing date, you will need to reimburse them for this amount.

Property taxes are a vital aspect of homeownership and should be carefully considered when budgeting for your new home in Toronto. They represent a recurring cost that, while separate from your mortgage payment, is integral to your financial planning as a homeowner.

THE IMPLICATIONS OF COMMISSION-CUTTING AGENTS

Choosing an agent who offers reduced commissions or rebates might seem advantageous initially, but it's important to understand the trade-offs.

HIGH-VOLUME BUSINESS MODEL

  • Limited Personalized Attention: Agents working with a high volume of clients may not be able to provide the same level of personalized service and attention to your specific needs as a buyer. This can be crucial in finding the right home and negotiating the best terms.
  • Reduced Buyer Focus: These agents might be more focused on quickly closing deals rather than finding the best match for you, which could affect your satisfaction with the home-buying process.

THE REAL COST OF LOWER FEES FOR BUYERS

  • Resource Allocation: Agents offering lower commissions may allocate fewer resources to each client. This can mean less time spent on understanding your preferences, searching for properties, and negotiating terms on your behalf.
  • Negotiation Skills: Experienced agents with standard commission rates often bring more refined negotiation skills to the table, which is essential for advocating for your interests, especially in competitive market situations.