What Are Closing Costs in Real Estate?
Closing costs refer to the various fees, taxes, and administrative costs that are paid in addition to the sale price during real estate transactions. These costs apply to both real estate buyers and sellers and are typically settled on the closing day, when the transfer of ownership becomes official.
The total amount varies based on the property type, location, and whether you’re selling with a mortgage or if the buyer is paying cash. It’s essential to keep these costs in mind when planning your budget and making financial decisions, particularly for first-time home buyers.
How Much Are Average Closing Costs in Canada?
Typical closing costs in Canada range from 1.5% to 4% of the property’s purchase price. For a $500,000 home, that means budgeting between $7,500 and $20,000. It’s a good idea to get an accurate estimate early—especially if you’re applying for a mortgage through a lender or working with a mortgage broker.
Common Closing Costs in Quebec
- Welcome Tax (Land Transfer Duties): Known in Quebec as the “taxe de bienvenue” or “droits de mutation immobilière”, this is a municipal tax calculated based on the property’s sale price or market value, whichever is higher. The land transfer tax rate is progressive, and some municipalities have additional tiers. While Quebec generally does not offer a province-wide rebate for first-time buyers, certain municipalities may provide partial rebates in specific cases.
- Title Insurance: While not mandatory, title insurance is often required by mortgage lenders. It protects against issues related to the property title, such as registration errors, unpaid liens, or public records discrepancies. This can provide peace of mind for both the buyer and lender.
- Municipal and School Taxes: On closing day, buyers often reimburse sellers for prepaid property taxes, including municipal and school taxes. Following the transfer, these become the buyer’s responsibility as part of ongoing property taxes.
- Legal Fees (Notary Fees): In Quebec, property transactions must be completed by a notary, not a lawyer. The notary is responsible for drafting and registering the deed of sale, conducting title searches, verifying legal aspects of the transaction, and preparing the mortgage deed. These notarial fees are a standard part of real estate closing costs.
- Home Inspection Fees: While not legally required, a professional home inspection is strongly advised. It can identify potential issues with the property—such as structural defects, plumbing problems, or electrical concerns—and can help buyers make informed decisions.
- Appraisal Fees: If you’re using a mortgage, your financial institution may require an appraisal to confirm the fair market value of the property. The appraisal fee is typically paid by the buyer as part of the mortgage application process.
- Mortgage-Related Closing Costs: Buyers with less than a 20% down payment must pay mortgage default insurance premiums, usually from CMHC, Sagen, or Canada Guaranty. These can be added to the mortgage principal. Other potential costs include mortgage registration fees (paid to the notary) and administrative fees from the mortgage provider or broker.
- Registration Fees: These fees are paid to the Quebec Land Registry (Registre foncier du Québec) and cover the official registration of the deed of sale and mortgage. The fees are calculated based on the value of the property and the mortgage amount and are required to finalize the transfer of ownership.
Who Pays the Closing Costs?
Both buyers and sellers pay closing costs, but the types and amounts differ based on the party involved and the specific transaction.
Buyer’s Closing Costs (Majority of the Costs)
In Quebec, buyers are responsible for most of the closing costs, which may include:
- Welcome tax (Droits de mutation immobilière)
- Notary fees
- Title Insurance
- Property appraisal fees
- Home inspection fees
- Mortgage default insurance premiums
- Mortgage registration fees
- Property tax adjustments
- Government registration fees
Seller’s Closing Costs
Sellers typically pay:
- Mortgage discharge fees (actual cost can vary depending on the lender)
- Real estate commission
- Legal or notarial adjustments
Can Closing Costs Be Negotiated?
Yes. In some cases, particularly in private sales or cash transactions, parties can negotiate who pays certain costs. With Vendu 24h, you sell your home directly for cash, avoiding agent commissions, mortgage-related fees, and delays. You get a fair offer within 24 hours, with no renovations, no visits, and no hidden costs. It’s the simplest way to sell fast in Quebec.
How to Reduce Closing Costs with a Cash Home Buyer
When navigating the home-buying process, closing costs can become a significant financial burden. Fortunately, selling your house to a cash home buyer offers a practical way to reduce or even eliminate many of these expenses. Working with a cash buyer eliminates many of the financial and legal hurdles typical of conventional real estate transactions. Here’s how:
No Mortgage-Related Costs
Since cash buyers do not require a mortgage loan, sellers and buyers avoid:
- Mortgage application fees
- CMHC-insured mortgage costs
- Mortgage insurance
- Origination costs
- Delays due to credit score checks or mortgage approval
This significantly reduces upfront expenses and administrative tasks.
No Real Estate Agent
In most cash deals, there’s no real estate agent, which means:
- No real estate commission (which can be up to 5% of the selling price)
- Fewer legal complications tied to negotiations and third-party representation
Faster Closing = Fewer Holding Costs
With fewer delays, the house closing can happen in days, not weeks. This helps sellers avoid:
- Additional mortgage payments
- Monthly installments for insurance policies
- Utility bills and homeowners association fees
For those facing financial obligations, cash at closing offers peace of mind. It’s also an ideal path for sellers of primary residences looking to avoid costly issues like unexpected survey fees, conveyance issues, or pest inspection fees.
How Vendu 24h Improves the Home Selling Process
1. No Real Estate Commissions
With Vendu 24h, you sell directly to a buyer—eliminating real estate agent commissions. This alone can save thousands in additional expenses, especially on homes with a high selling price. You avoid back-and-forth negotiations, long house hunting timelines, and typical delays found in a conventional purchase agreement.
2. Skip Mortgage-Related Delays
Selling to a traditional buyer means waiting for mortgage approval, handling mortgage documents, and possibly facing a failed deal due to credit report issues. Vendu 24h pays in cash—so there’s:
- No mortgage loan application
- No mortgage insurance premium
- No private mortgage insurance or mortgage rate lock delays
This drastically reduces the closing transaction time and avoids risks like last-minute financing collapses.
3. No Repairs, No Inspections Required
Vendu 24h buys homes as-is, meaning you don’t need to pay for a home inspection, land survey, or pest inspection. These costs can add up quickly, especially when issues are discovered. This also removes the stress of navigating public land ownership records or disputes over property lines and land boundaries.
4. Transparent, Fixed Closing Costs
Unlike traditional sales, where mortgage closing costs, escrows, and legal services add unpredictable fees, Vendu 24h provides clear, upfront terms. You won’t face:
- Hidden attorney fees
- Unexpected property taxes
- Surprise property transfer tax charges
- Shifting estimates for legal professionals and document filing
Vendu 24h eliminates guesswork with a defined list of closing costs, helping you stick to a realistic budget.
5. Ideal for Urgent or First-Time Sellers
Whether you’re dealing with a financial commitment, looking to cash out an investment property, or facing personal situations like house fires or divorce, Vendu 24h offers a fast, certain solution. You avoid the delays of working with mortgage companies, escrow companies, or relying on insurance companies to clear title issues.
Vendu 24h: Fast, Fair, and Hassle-Free
At Vendu 24h, we make the home-selling process fast, simple, and stress-free. As direct cash buyers, we purchase properties across Quebec without commissions, real estate agents, or costly repairs.
You won’t need to worry about mortgage delays, inspections, or legal complications—we handle everything. Whether you’re moving, managing a financial obligation, or just want to sell quickly, we provide a fair offer within 24 hours and close on your terms.