Blog > What First-Time Buyers Need to Know About Closing Costs
What First-Time Buyers Need to Know About Closing Costs
Buying your first home is an exciting milestone — but it’s important not to overlook closing costs. These are additional expenses due at the end of the purchase process, and many first-time buyers are often surprised by them.
Here’s a clear breakdown of the most common closing costs in Calgary to help you budget wisely.
1. Legal Fees ⚖️
Expect to pay between $1,200 – $2,000 for a real estate lawyer. They manage the paperwork, title transfer, and mortgage registration. It’s a necessary expense, so start contacting lawyers early to compare fees.
2. Home Inspection (Optional but recommended)
A home inspection typically costs $400 – $600. While not mandatory, it can reveal issues that might save you money and stress later.
3. Appraisal Fee
Some lenders require a third-party appraisal to verify the home’s value. This usually costs $300 – $500 and may sometimes be covered by the lender.
4. Title Insurance
Title insurance protects against title fraud or existing liens and usually costs $250 – $400. Your lawyer typically arranges this during closing.
5. Land Title Registration (Alberta)
For a $450,000 home, this fee is approximately $280, which includes a base fee plus a rate per $5,000 of the purchase price.
6. Property Tax Adjustments
If the seller has prepaid property taxes, you’ll reimburse the prorated amount based on your possession date.
7. Condo Document Review (If purchasing a condo)
This review costs around $400 – $600 and is essential to identify any concerns in the condo corporation’s financials, bylaws, or upcoming special assessments.
8. CMHC Insurance (If your down payment is under 20%)
Mortgage insurance is typically included in your mortgage and not paid upfront but is important to be aware of.
Example: Closing Costs on a $450,000 Condo with 5% Down
| Item | Estimated Cost |
|---|---|
| Legal Fees | $1,500 |
| Home Inspection | $500 |
| Appraisal (if required) | $400 |
| Title Insurance | $300 |
| Condo Document Review | $500 |
| Land Title Fees | $280 |
| Property Tax Adjustments | $200 (varies) |
| Total Estimated Cost | $3,500 – $4,500 |
Final Thoughts
When buying your first home, it’s essential to budget for closing costs in addition to your down payment. Plan to set aside approximately 1.5% to 2.5% of the purchase price to cover these expenses.
If you have any questions or want a detailed estimate tailored to your home search, feel free to reach out - andy.twerefouryyc@gmail.com I’m here to guide you through every step.