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BUYER INFORMATION PACKAGE

CONTENTS

Page 1

DepositSurveyitle InsuranceLand ranser ax

Page 2

Legal FeesDisbursementsFederal Identification

InormationStatement o AdjustmentProessional Home InspectionHome Insurance

Page 3

Moving CostsFirst Mortgage CostsSecond Mortgage CostHS

Page 4Closing DateInsurance Concerns

At the time o closing o residential purchases o property, there are additiclosing costs that are ofen unanticipated by Buyers. Te ollowing are typical cincurred at the time o closing, and some inormation related to closing issues all Buyers should be aware o beore the scheduled date or closing.

DEPOSIT

At the time o presenting an Offer to Purchase you will have to submit a deposit che

which will be held in trust by the listing broker i the offer is accepted. Te chis approximately 5% o the sale price or more depending on the circumstancesclosing date. Te cheque is usually certified and deposited the day afer acceptaOccasionally the deposit unds are wired by electronic transmission.

SURVEY

I the seller does not provide the Buyer with an up-to-date survey in the AgreemePurchase and Sale (showing the existing location o ences, buildings and structuit will ofen be necessary to have a new one prepared by an Ontario Land Survas mortgage lenders may require it. Solicitors will not give an unqualified opiniotitle without an up-to-date survey. ypically and depending on the circumstan

survey will cost in the range o $1,000 - $1,500.

TITLE INSURANCEAn alternative to an up-to-date survey is title insurance. Tere are a variety o insuthat provide this product including the Buyers lawyer. Te cost o title insuranbased on a sliding scale depending on the value o your purchase. ypically, care between $300 and $500. A note o caution: title insurance does not correct problems. It merely compensates the Buyer as a result o negative impact resurom a title deect.

LAND TRANSFER TAX

Purchasers o real estate in Ontario are required to pay provinvial Land ranseron closing. It is paid directly to the Province o Ontario. It is based on the ollowormula: 0.5% is paid on the rst $55,000 of property value; 1% is paid on the next $195,000 of property value; 1.5% is paid on the next $150,000 of property value; with 2% paid on any value in excess of $400,000

In short $4,475 in provincial Land Transfer tax is owed on the rst $400,00, withpayable on any value in excess o that amount. In addition, a municipal Land ranax scheme was introduced or properties purchased in oronto with closing d

on or aer February 1, 2008. e formula is as follows: 0.5% is paid on the rst $55,000; 1% is paid on the next $345,000 (up to $400,000); and 2% is paid on any value in excess of $400,000First time Buyers may be eligible or rebates under both or either o the provincimunicipal schemes. Legal advice should be sought as to eligibility.

Go to the Chestnut Park website (www.chestnutpark.com) and click on Lranser ax Calculator under the Find A Property tab to calculate land trantaxes owing according to property value.

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LEGAL FEES

You will require the services o an Ontario lawyer to act on your behal to close yohouse purchase. Your lawyer will charge you or services, including title searchinand or his/her expenses (disbursements). Your sales representative can recomme3 lawyers to you i you do not have one already.

Beore retaining a lawyer, you should ask him/her or a complete breakdown o edisbursements, and mortgage work. Most legal work or home purchases excee$1,500 and can be much higher under certain circumstances. Be sure to ask first.

DISBURSEMENTS

Tere will be other costs which the lawyer will have to pay on your behal. Basicalthings like photocopies, tax certificates, zoning clearance and work orders, courieregistering o the deed and mortgages, searching executions, mortgage schedulstatus certificates (or condominiums) and other incidentals. Tese disbursemenwill be in the range of $600 - $800.

FEDERAL IDENTIFICATION INFORMATION

Te Federal Government has implemented legislation that requires real estbrokerages under the auspices o the Financial ransaction and Reports Analy

Centre o Canada FINRAC to identiy the parties to real estate transactioTe legislation is designed to prevent money laundering and the movement o tproceeds o crime. Your real estate agent is required thereore to obtain inormatirom you to complete various orms to be retained in Chestnut Parks files.

STATEMENT OF ADJUSTMENTBalance due on closing basically the balance due on closing is the differenbetween the sale price and the amount o your deposit that was presented wthe offer. However, there are certain other items that will be adjusted at the time closing.

Taxes i the Seller has paid taxes or the ull year, the Buyer will be responsible his/her portion rom time o closing until the end o the year.

Fuel i the property is heated by oil, then the tank will be filled by the Seller closing, and the Buyer will be charged on the adjustment with a ull tank o (usually 200 gallons).

Utilities all utilities and gas that are metered will be read on closing and the sellwill be responsible or them up to the date o closing.

Tese are normal adjustments. Particular attention should be paid to new

construction transactions, especially condominiums. Tere are numerous additionadjustments in these purchases. Tese adjustments, including the Ontario New HomWarranty Fee, could amount to $3,000 or more.

PROFESSIONAL HOME INSPECTION

is is usually around $400 and up. e cost will vary with the size of the homebeing purchased and the inspection company used.

HOME INSURANCE

Tis varies. Minimally, costs start at $500. Call or quotes. N.B. 1st mortgage mube noted on policy.

(Home insurance has become a serious closing issue. See details below.)2

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MOVING COSTS

ese vary from $200 per hour and up, depending on the company and the numbero movers. It will also depend on the size o the vehicle and the time o the month andyear you are moving.

FIRST MORTGAGE COSTS

Interest adjustment Tis is something most Buyers do not understand. Basically, iyou are arranging a new first mortgage, your lawyer will receive the mortgage monies

rom the mortgage company on the morning o the closing date.

However, most mortgage companies use the 1st or the 15th o the month as a paymentdate. Tereore, i you are closing a deal on, say August 10th, the mortgage companywill deduct rom the mortgage monies interest rom date o closing (10th) to the firsto the ollowing month (i.e. September 1st) interest adjustment date and your firstpayment will then commence the 1st day o the ollowing month (i.e. October 1st),and continue on a monthly basis thereafer.

Example: on a $100,000 mortgage at 5.5% interest rom the 10th to the 1st o theollowing month, interest would amount to approximately $316 and instead o getting

$100,000 from the mortgage company on closing, you will receive only $99,684.(Interest adjustment costs will not affect every mortgage, as some will have paymentcommencing one month afer closing.)

Loan processing or bank appraisal ee Usually about $300. High ratio mortgageswill demand a higher processing ee. A high ratio mortgage is one in which the Buyeris seeking nancing in excess of 80% of the purchase price, or in some cases theapproved value o the property.

SECOND MORTGAGE COSTS

Usually require the payment o additional legal ees, appraisal and brokerage ees.

Tese vary dramatically, depending on the transaction and the risk as perceived bythe lender.

HST

Re-sales although most used residential re-sales are exempt rom HS, almost allservices involved with the transaction will be subject to HS, e.g. real estatecommissions, lawyers ees, appraisals, processing ees, home inspections, insurance,moving cost, etc.

Substantially renovated houses are subject to HS i purchased rom thebuilder/renovator.

Commercial properties are subject to HS. Tis is a complex area and individualsshould seek advice rom a specialist, e.g. accountant, tax lawyer.

New housing is subject to HS. It is also a complex topic. Ofen the HS will beincluded in the purchase price. Tere are also H.S.. rebates available in a number oinstances. Tese rebates are most ofen assigned to the builder.

Vacant land this is a very complex HS area. Vacant land attracts HS in most,but not all cases. As a cautionary note assume that it does until the nature o the land,its use and its ownership can be clarified by a specialist.

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8/12/2019 Buyer Info Package

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CLOSING DATE

Just a note at this point about the procedure on the actual closing date. It will benecessary or your lawyer to obtain the money rom the mortgage company on thday o closing.

Lawyers ofen have many deals closing on busy days, and it is ofen difficult orthem to arrange a closing time until later in the day. It is probably not adviseable tplan or an early morning move into your new home.

Please discuss this with your lawyer.

Your lawyer should be in touch with you within the week prior to closing to arrangan appointment to sign and bring in the necessary closing money (appointmenprobably day prior to closing).

INSURANCE CONCERNSA number o insurance concerns have developed in the real estate industry thacould have a financial impact or a Buyer on closing. Although an exhaustivexplanation is not possible here, Buyers should be aware o the ollowing:

1. Knob and Tube wiring

Tis is an older orm o ungrounded wiring that some insurers may not cover omayonly do so at greatly inflated premiums. In some cases buyers may be denieinsurance altogether or until such time as the house has been rewired. Tese costscould easily exceed $5,000.

2. Hydro Service

Insurance companies are reusing to insure properties with 60-amp service andhomes with use panels instead o breakers. As in the case o knob and tube wirinhydro service may have to be increased to at least 100-amp service beore insuranccan be obtained.

3. Oil Tanks

Insurance companies are reusing to insure homes with oil tanks that have not beecertified by a echnical Standards and Saety Association (SSA) technician. Tis particularly true for oil tanks that are older than 25 years. In addition, fuel ocompanies will no longer provide uel oil to homes with tanks that have not beecertied. Cost of a new fuel oil tank can be in the range of $2,000. Underground fuoil tanks are now subject to strict regulation and in most cases must be removed.Seek advice beore buying a property with an underground tank.

4. Other IssuesGenerally, insurance companies have been shedding risky (in their opinion) policieIn some parts o the country the age and type o structure have also become issueIn Ontario, galvanized steel plumbing is becoming an insurance concern as insulbrick siding in some cases. Properties owned by absentee owners/landlordmay also raise concerns.

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www.chestnutpark.comChestnut Park Real Estate Limited, Brokerage Head Oce 416.925.919