National home sales in Canada increased by 2.8% month-over-month in 2024. This is why attorneys earn about $900 to $2,500 as the average lawyer fee for house closing in Ontario.
House closing costs are the final expenses sellers and buyers incur during a real estate transaction. If you want to know more about the average lawyer fee for house closing, look no further.
Let’s look at everything you must know about house closing costs.
What Is The Average Lawyer Fee For House Closing?
Most people have to pay up to $2,500 as the average lawyer fee for house closing. The exact figure may vary depending on the extent of services offered by the attorney.
Your average lawyer fee will also be affected by the tax percentage you have to pay. Another factor that affects the average lawyer fee for house closing is whether you’re a seller or buyer.
The general rule of thumb is that the average lawyer fee for house closing is higher when you’re the selling party. This is because the attorney will have to do more work, such as:
- Filing for deed transfer
- Processing tax payments for different types of transfers
- Disbursement costs
- Making adjustments to the deed document if it has any discrepancies
- Determine the average closing costs
Meanwhile, a lawyer has to ensure the title is in place for the buyer and help them with property registration. They don’t have to make changes to deed documents, saving their time and cost.
What Services Are Covered Under The Average Lawyer Fee For House Closing?
A real estate lawyer in Ontario can help you easily sell or buy a property. If you want to buy a house, the attorney will help you find the perfect new home. They will also negotiate a reasonable offer with the seller.
The lawyer will also perform the following things:
- Title search
- Prepare a statement of adjustments
- Register the new property in your name
- Assist transactions on the final closing day
Meanwhile, if you’re the seller, an attorney can help you communicate with the buying party. They will ensure the property you’re selling does not have defects. The lawyer will also process transactions related to the sale.
When Must You Contact A Real Estate Lawyer?
When buying a home, the best time to contact a real estate lawyer is when you have decided to sign an offer of purchase with a seller. The attorney will guide you on whether the price is suitable for the house.
They will start the process of getting your house insured in your name. Lawyers also help buyers register a new property in their name.
Meanwhile, a seller must contact a real estate lawyer as soon as they decide to sell their property. They will conduct a title search, tax search, and much more for you.
Types Of House Closing Costs
The average lawyer fee for house closing makes up only a small part of house closing. Here are all the things that are covered under this activity:
1. Real Estate Lawyer Fees
Real estate lawyer fees in Canada vary according to the province you’re in:
- Ontario: $900 to $2,500
- Alberta: $600 to $1,000
- British Columbia: $900 to $1,300
- Saskatchewan: $800 to $1,000
Whether you’re selling or buying a house in Ontario, the real estate lawyer fees under house closing will be relatively higher than those of other provinces.
2. Land Transfer Tax
All house buyers in Canada must consider land transfer tax under their house closing costs. The tax does not have a fixed rate and is calculated based on:
- The final price of the property
- Canadian province the property is in
The land transfer tax usually adds thousands of dollars to the overall house closing costs. For example, a house of $250,000 in Ontario would require you to pay $2,225 as the land transfer tax.
If you’re a first-time house buyer in the province, you’ll get a rebate of $2,225. This means your land tax would be reduced to $0.
3. Title Insurance
Another important factor for a buyer to consider under house closing costs in Ontario is title insurance. It will offer you protection from any future legal problems related to the ownership of your property.
The title insurance will ensure your new home has a clear title and ownership. So you can rest assured that you will not fall into disputes with old owners or other people claiming the property to be theirs if you have this insurance.
Other issues that the title insurance covers include:
- Property encroachments
- Public record mistakes
- Unrevealed liens
The value of insurance depends on the purchasing price and the type of property you’re buying. A $250,000 house in Ontario usually costs $375 in title insurance.
If you’re buying a condo in Ontario, its title insurance cost would be $243.
4. Property Taxes
Property taxes usually don’t come under closing costs, but sometimes that may not be the case. You may be required to pay the property taxes partially when buying a property.
So it is good to prepare yourself for paying these taxes and listing them in your overall expenses. The exact value will depend on the municipality under which the property comes.
The actual property value is also assessed to calculate an accurate tax cost. Consulting a real estate lawyer about this may help you understand the tax system of your province better.
5. Registration Cost Of Deed Transfer
Whenever someone buys a property in Canada, they must pay the government a registration fee. This charge records the transfer of property and mortgage payments associated with it.
The fee and documents related to the transfer are managed at the Land Registry Office (LRO). Many lawyers handle this process, so they include these registration costs under their average lawyer fee for house closing.
However, it is good to learn about the individual registration costs in your province. This will ensure your lawyer is not overcharging you for the property registration.
You can learn the individual cost by getting quotes from different lawyers and notaries in Ontario. Comparing them would help you figure out the average registration cost.
Read More: https://athenalawoffice.com/blog/closing-costs-in-ontario/
Is There Any Way To Save On Average Lawyer Fee For House Closing?
There are a few ways to save on average lawyer fees for house closing if you’re on a tight budget such as:
1. Negotiate Lawyer Fees When Selling A House Ontario
Negotiating the average lawyer fee for house closing is possible in Ontario. You can let the attorney know your budget and request them to make reductions in their fee.
One of the ways you can reduce your real estate lawyer fees is by getting a lower hourly rate. Typical hourly rates may vary from $270 to $450. Getting your lawyer to agree on the lower end of this average range will help you save money.
Another way of saving real estate lawyer fees is by telling them to charge you a flat fee instead of hourly. A flat charge is more predictable and cost-effective, so it will help you stay within the budget.
2. Ask Your Attorney The Exact Things They Are Covering Under Average Lawyer Fee For House Closing
When paying an attorney the average fee for house closing, you must ensure they’re not overcharging you. The best way to figure out this is by asking the lawyer to give you a list of things they are covering under their fees.
Typically, the following things come under average real estate lawyer fees for house closing:
- Contract review
- LRO costs
- Attorney fees
- Real estate agent fees if the law firm provided an agent
You can then get quotes of those things from other lawyers and notaries in Ontario. Comparing the rates will help you calculate an accurate average lawyer fee for house closing.
The best thing about getting a list is that you can identify negotiable costs to reduce the fee more.
Other Ways To Save On House Closing Costs
Saving on lawyer fees for selling a house Ontario or buying a house affects a small portion of house closing costs. You can save a more significant amount by focusing on other things:
1. First-Time Home Buyer Rebate
When buying a house in Ontario, you can save on land transfer taxes by finding out about first-time house buyer rebate policies in your province. This discount will cover your land transfer tax partially or fully.
However, you must fulfill the requirements to get this rebate:
- You must be above the age of 18
- You must not have owned a home previously
- You must not have an interest share in a home anywhere in the world
- The above requirements also apply to your spouse for the duration of your marriage
2. Pay 20% Of Down Payment
A down payment is the money that buyers put towards purchasing a property. They offer this amount to the lender as the initial payment, while the remaining price of the home is covered by mortgage payments.
Many people aim to pay the lowest amount they can as a down payment to save money. This is especially true for those buying a house on a tight budget.
However, this tactic may cause more financial damage if the value of the down payment is below 20%. That is because you will then have to buy default mortgage loan insurance with the payment.
Mortgage loan insurance is a safety feature for lenders against buyers who don’t pay mortgages or delay payments.
3. Request Your Lender To Reduce Their Fee
A lender is a person or entity that finances real estate transactions to help people and businesses buy, construct, or renovate properties. The entity will lend you money to purchase your home.
Typically, a lender in real estate is a:
- Bank
- Credit Union
- Other Financial Institutions
You can request a lender to reduce their fee to save money on house closing. Negotiating with them about house appraisal costs can help you with this. Some lenders usually agree to cover partial or complete charges for property appraisal.
Learn More: https://athenalawoffice.com/blog/home-appraisal-ontario-guide/
Things To Look For In A Real Estate Lawyer For House Closing
To make the most out of your lawyer when selling a house Ontario or buying a property, choose a reliable attorney. Some things you can look for in a good lawyer include:
- High knowledge of rules and regulations related to buying or selling properties
- Experience in drafting contracts and managing property transfers
- Their ability to deal with issues that arise on final house closing days
You can understand your lawyer’s capability by asking them questions about house closing deals they’ve handled in the past. This can help you decide whether the attorney has the right expertise to manage your property sale.
FAQs
Who Pays Attorney Fees At Closing?
Both buyers and sellers have to pay real estate lawyer fees at closing. The only difference is that the things covered under their closing costs may be slightly different.
What Are The Lawyer Fees When Selling A House Ontario?
The lawyer fees when selling a house Ontario is $999. This figure may rise up to $2,015 because of disbursements, unity charges, and additional payouts to the lawyer.
How Long Does House Closing Take?
The typical time for house closing is 1 to 2 months. It is best to close near the end of the month to save on costs.
Does The Down Payment Cover House Closing Costs?
House closing costs are not covered under the down payment. So you must create separate entries for these things in your budget.
Set Up A Consultation With Our Real Estate Lawyer In Ontario
Buying or selling a house in Ontario is a breeze if you have a real estate lawyer by your side.
All attorneys have an average lawyer fee for house closing, but the charge is worth it because they will reduce the hassle you have to do during a real estate transaction.
If you’re involved in a property transaction in Ontario, contact us today to set up a free consultation with our real estate experts. They will help you understand house closing costs better and be willing to negotiate real estate lawyer fees.
Author Profile
- Barnett Law is a trusted and knowledgeable lawyer in Scarborough. Her expertise spans real estate law, family law, adoptions and fertility law. A lawyer by profession and a humanitarian by heart, Athena Narsingh Barnett wants to help people become more familiar with the legal system and be well-informed to make important legal decisions.
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