The Costs of Selling a Home: What to Expect

Are you preparing to sell your home? If so, you probably have your eye on the prize—as you should. By preparing and marketing your property with care, you can help ensure the highest possible return. That said, you’re going to have some costs to contend with, too. Fortunately, by knowing what they are, you can avoid unpleasant surprises down the line!

Here are the costs of selling a home that you can easily anticipate and budget for…

Real estate commission

In a way, sellers are lucky when it comes to the financial side of the real estate transaction. You don’t have to pay a deposit, or cover major closing costs like land transfer taxes. That said, you are responsible for the commission of both agents involved.

As a general rule, the amount you’ll owe will sit at around 5 per cent of the purchase price. This sum will be split between your real estate representative and the buyer’s. It’s important to remember that when you work with an agent, you only pay for a successful result (which is to say, if you sell your home).

Legal fees

In any real estate transaction, you should have legal expertise in your corner. This professional will review your paperwork, make sure you understand the legalities of your contract, and generally ensure that your due diligence is done. Your fees will vary depending on the lawyer, but they’re typically somewhere around the $1,500 mark.

Home preparations

From repairs to decluttering to expert staging, there are a few steps that most sellers should take before putting a home on the market. In most cases (especially when it comes to staging), it’s best to have a professional handle them. Costs for these services vary widely, but you could be looking at many thousands of dollars.

Fortunately, if you work with a full-service agent, you’ll likely face fewer fees to get your property in s show-ready shape. A professional who goes above and beyond will include staging—and help out with other preparations, too. When they don’t have the skills to do a thorough job, they should have connections to local pros who do!

Even if you work with someone who provides the highest level of service, you may choose to have some minor repairs done out of pocket. Your agent can advise you as to which improvements have the potential to boost your return.

Mortgage discharge fees or prepayment penalty

Before you can sell, you’ll need to go through the mortgage discharge process to finalize the completion of your loan. You’ll sign some paperwork, and pay a fee that may tally up to a few hundred dollars.

If you’ll be paying your mortgage off early, you can also expect a prepayment penalty. The amount is typically the higher of:

• A sum totalling 3 months’ interest on what you still owe

• The interest rate differential (IRD)

Pre-list inspection

This cost doesn’t apply to every seller, but some opt to have a pre-listing inspection done. By having your home professionally assessed before it goes on the market, you can make pre-emptive repairs, price your property accurately, and prepare for future negotiations. If you decide to go this route, you’ll likely pay around $400 or $500.

Selling a home is exciting for many reasons, not the least of which is the return you’ll receive. Having said that, make sure you also factor in the costs associated with your sale. With a little bit of forethought, you can budget more accurately for the future!

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