When selling a house, there are many who are excited about the asking price – dreaming that all of those hard-earned pennies will return to their bank account. However, in truth, there are some costs of selling a house in Toronto. So, before you get too excited about the asking price, here are some important costs you will need to consider when selling your home.
Home Staging and Home Preparation
Some homes are turnkey and are very appealing to potential homebuyers, others need a bit of love before they truly shine. Always consult first with a real estate agent before investing in staging and home preparation – you would hate to find out that a $10,000 investment in your home only yielded a $4 000 increase in your home’s valuation.
Examples of affordable things you can do to prepare your home are: painting (both the interior and the exterior of the home), professional cleaning, gardening, necessary repairs, staging and getting an off-site storage locker. The locker is especially helpful if you want to pare down the home’s personal touches and make it look like a clean slate for potential buyers.
Some homes might just need light primping when it comes to staging, others will need full-on professional staging, this is also something to consult with your real estate agent!
Pre-Listing Home Inspection / Status Certificate
If you are looking to sell your house it is highly recommended that you get a pre-listing home inspection. Not only will it let you as a seller appreciate what in your house needs fixing, but it will also give buyers confidence in your home which often results in a greater number of offers. A pre-listing home inspection in Toronto costs around $400-$600, but some real estate agents cover that expense. Either way having one does can be advantageous.
If you are looking to sell your condo it is without question that a potential buyer will want to look at the status certificate of the condominium corporation. This certificate is a set of documents that outlines the legal and financial health of the condo corporation and costs approximately $100 to get from the condo corporation itself. Make sure you order it in advance as it can take up to 10 business days to procure.
How Much Commission Do I Have to Pay?
When people think of the costs of selling a house in Toronto, they usually are thinking of real estate commission. It is true that this is often the biggest cost to sell a home and that commission varies from agent to agent. While it is possible for a homeowner to list a home themselves in hopes of saving that cost, studies show that in fact they end up selling the house for less than they could have with a real estate agent as they lack the necessary marketing skills to get the most value for their home.
Real estate agents in Ontario will charge anywhere from 1-6% to list a home for sale – this is entirely dependent on the agent’s skills, experience, business model and results. If you truly want to save, you can enter into a conversation about negotiating the price with an agent – just remember, you get what you pay for!
Legal Fees
Legal fees generally depend on which lawyer you hire but expect an average of between .25% and .5% of the purchase price. A helpful tip to know is that lawyers can negotiate their fees and provide initial quotes. It is also reassuring to know that the legal fees of a seller are usually lower than those of a buyer, as the seller generally responds to the buyer’s requests.
Mortgage Penalty
Talk to your lender! It is always best to have a very flexible system of financing, but in case you do not, be prepared for penalties if you sell your home during the mortgage period or if you are selling your home and are not opting to purchase another one.
Capital Gains Tax
If the property you are selling is an income property, you may be subject to a Capital Gains Tax. Consult with your tax accountant for more information.
The costs of selling a house in Toronto may seem numerous, but your real estate lawyer will break down everything for you – from adjustments (taxes, water, oil, etc) to disbursements and surveys.
Additional fees should not come to you as a surprise and as long as you walk in prepared knowing that there will be costs attached to selling your home you can better budget for your future. For more information on selling your home, please feel free to contact me.
