Humber/Ontario Real Estate Course 4 Exam Practice

What constitutes a common closing cost paid by the buyer?

1. Broker commission

2. Mortgage discharge fee

3. Provincial land transfer tax

4. Appraisal fee

5. Seller's legal fees

6. Title search fee

The correct answer is: Provincial land transfer tax

The correct answer is the provincial land transfer tax, which is a common closing cost incurred by the buyer when purchasing a property. This tax is calculated based on the property's purchase price and is typically required to be paid at the time of closing. It is a significant expense that varies from province to province and can affect the overall affordability of real estate transactions. The other options generally represent costs that may not be the responsibility of the buyer. For example, the broker commission is usually paid by the seller, while the seller's legal fees are also an expense that the seller would typically cover. Although appraisal and title search fees may also be associated with the buying process, they can sometimes be negotiated between the buyer and seller, depending on the transaction. The mortgage discharge fee is related to the seller, indicating a cost that is not a standard closing cost for buyers. Understanding these distinctions helps clarify the typical financial obligations a buyer should prepare for at closing.