Typical Transaction Fees on Real Estate Purchases

Introduction

So you have decided to buy a property in Vancouver and are now looking forward to becoming a homeowner or landlord. Ideally, people would want to be informed about what to look out for before making such a large investment. In reality however, for most people, a lawyer is only brought on board when they have already signed on the dotted line and is ready to complete the deal.

In this article, we will go through the typical pricing and costs of a real estate purchase conveyance, because let's be honest, money matters, especially when we are talking about Vancouver real estate. Please also see our related article covering property transfer tax.

Legal Fees vs. Disbursements

First, we will describe the difference between legal fees and disbursements. Legal fees are the fees you pay the lawyer for completing the transaction, which typically would include reviewing the contract, drafting the documents such as the purchase and mortgage documents, facilitating the payment of money to the seller's lawyer, and ensuring that your interests are protected.

Disbursements are fees that the lawyer pays on your behalf to third parties to complete the transaction.

Common Disbursements

Common disbursements include the following (The numbers stated below are rough estimates under the assumption that no rush charges are applied. Collingwood Law Office has no control over these third party costs, and makes no representations as to the accuracy of the following information. Readers should be aware that such fees are subject to changes by their respective agency from time to time without notice):

1. Registration of Transfer - $86

The Registration of Transfer disbursement is a fee charged by the Land Titles Office to transfer or change the name of the title on the property from the seller's name to your name.

2. Registration of Mortgage - $86

The Registration of Mortgage disbursement is a similar fee to the registration of transfer above. It is a fee charged by the Land Titles Office to register the mortgage the bank is giving you against the property title. If you have a mortgage this fee is mandatory as the bank will not loan you the money unless the mortgage is registered against the property.

3. Property Tax Certificate - $80 to $135

As with every property, there is property tax. When you buy a property, the seller would have either already paid the property tax (after July 1) or property tax is still owing (before July 1). In order to correctly assess how much property tax should be credited to seller (after July 1) or to the municipality (before July 1), we need to obtain an official tax certificate from the municipality.

The property tax certificate also allows us to see the property tax (and often utilities) for your property, and if there are any penalties or outstanding amounts owed by the seller. We then make adjustments in accordance to the tax certificate. For example, if you buy a property on February 1, then you are responsible for paying the property tax for the days between February 2 to December 31, because you will be the owner of the property for those days.

4. Law Society Trust Administration Fee - $20

The Law Society Trust Administration Fee is a mandatory fee the Law Society of B.C. imposes on every distinct transaction or file. It is used for many purposes, one of them being for insurance purposes, ensuring your money (especially large sums as with real estate purchases) are protected when they are in the lawyer's bank account.

5. Insurance Binder Fee - $0 to $75

Insurance binder fee is charged by your insurance company. Every transaction that includes a mortgage requires an insurance binder. An insurance binder is a cover note stating that the building or property has a sufficient amount of insurance, so that if something happens to the building, the Lender's mortgage will be paid out.

6. Title Insurance - $150 and up

Title Insurance is often a mandatory requirement for many banks, as it protects the bank or lender from losses associated with the priority and enforceability of the mortgage, title and survey defects, and title fraud. Title insurance also protects you, the buyer, from title fraud, survey and title defects, as well as challenges against your ownership.

Title Insurance works for future incidents but also retroactively, meaning things that have affected your property in the past. You can enjoy peace of mind knowing that you are covered under the title insurance homeowner policy. Title insurance is a one-off cost that protects you as long as you own the home. The cost scales according to property purchase price.

7. Strata Form(s) Fee - $75 to $200

In B.C., Strata Forms B and F are mandatory if you choose to purchase an apartment, condominium or townhouse. Strata Forms B and F are important to you as they tell you the specific strata fees for the month in which you are to move in, if there are any pending court cases against the strata, if the seller owes money to the strata (which, if not paid, will most certainly become your problem), if there are any upcoming by-law changes that could occur (such as rental restrictions), and if you are entitled to a parking spot or storage locker, as well as many other things.

This fee is only applicable to stratified properties.

8. Software/Platform Fee - $112.00

The use of software platforms to connect with government service providers as well as banks is almost universal. These are typically pay-per-use and are unavoidable in today's connected service ecosystem. Applicability depends on mortgage provider.

9. Courier Fees - $72

The need for couriers to either pick up or deliver funds frequently arises.

10. Land Title Searches - $39

We search title at least three times during the course of a purchase - once when we start work to understand the state of title and so we know ahead of time if there are any issues, once right before registration to ensure there have been no changes, and once immediately after registration to ensure no other filing took priority over your transfer.

11. Transparency Declaration - $15

Since 2024, the BC government has set up a mandatory registry of beneficial ownership of land. This means that if land is held by a company or trust, the "real" individual owners behind the scenes must be disclosed. This is not applicable to most people buying property in their own personal name, but a filing confirming this is still mandatory in every case and the registry charges a fee for this.

Understanding Your Quote

Our quote includes disbursements which are mandatory in every case, but excludes those which may or may not be applicable to any given case in order to be fair to all clients.

Conclusion

Understanding the various fees and disbursements involved in a real estate purchase helps you budget accurately and avoid surprises at closing. While some of these costs are fixed, others may vary depending on your specific transaction.

At Collingwood Law Office, we pride ourselves on transparency in our pricing and will provide you with a detailed breakdown of all expected costs before you commit to proceeding with your purchase.