Humber/Ontario Real Estate Course 4 Exam Practice

What type of fees are commonly included in the buyer's closing costs?

1. Adjustment for property taxes

2. Electrical inspection fees

3. Fees associated with title registration documents

4. Real estate salesperson's commission

The correct answer is: Fees associated with title registration documents

The option referring to fees associated with title registration documents pertains to a common expense included in a buyer's closing costs. When a property changes ownership, the formal transfer of title must be recorded with the local government. This involves registering various legal documents, which incurs fees. These fees are necessary to ensure the new buyer's ownership is documented and recognized legally. Including these fees as closing costs is important as they represent part of the overall transaction expenses that the buyer must prepare for in addition to the purchase price. The title registration protects the buyer's rights to the property and helps prevent potential disputes over ownership. In contrast, adjustment for property taxes is often considered part of the closing process but is usually factored in as a prorated expense rather than a direct fee specifically for registration. Electrical inspection fees can be related to home inspection but are not standard closing costs in the same category as title fees. The real estate salesperson's commission is generally paid by the seller, not the buyer, making it unrelated to the buyer's closing costs.