Understanding the Costs of Selling Your Home in Ontario
The cost of selling a home will be on your mind if you’ve been thinking about making a move, especially since the majority of the fees associated with a transaction currently falls in the lap of the seller(s).
There is no denying that selling a home is a significant financial transaction so being prepared for the associated costs is crucial for a smooth experience and successful outcome. As a realtor with extensive experience in the Durham Region and Greater Toronto Area, I guide sellers through this process, helping them understand and manage these expenses effectively.
Here’s a comprehensive look at what you can expect when you decide to sell your home in Ontario.
COST OF SELLING A HOME | REAL ESTATE COMMISSION
The most prominent cost in selling a home is typically the real estate commission. This fee is paid to your real estate agent for their services, which includes listing, marketing, negotiating, and closing the sale. In Ontario, commissions can vary but generally range from 4% to 6% of the home’s selling price. The standard is 5% which is divided between the listing brokerage and the cooperating brokerage. For a $500,000 home, you could be looking at $15,000 to $25,000 in commission fees. It’s important to negotiate and understand these fees upfront to avoid surprises, but keep in mind that you get what you pay for and a realtor who is willing to bend significantly on their rate, may lack experience and expertise.
COST OF SELLING A HOME | LEGAL FEES & DISBURSEMENTS
Selling a house requires legal assistance to ensure all paperwork is correctly handled. Legal fees in Ontario can range from $500 to $1,500+, depending on the complexity of the sale. This will cover the lawyer’s time, preparing and reviewing the statement of adjustments, and ensuring all legal and financial conditions have been met.
COSTS OF SELLING A HOME | TAXES
If you’re selling a property that is not your principal residence, you might need to pay capital gains tax. This tax is applicable on the profit made from selling your real estate investment. However, any property that you’ve designated as your principal residence is exempt from this tax. It’s wise to consult with a tax advisor to navigate these waters, especially if you have multiple properties or use part of your home for business purposes.
COST OF SELLING A HOME | STAGING & PREPARATION
First impressions are everything when selling a home. Investing in home staging can significantly influence the selling price and the time your property spends on the market. The cost of staging varies widely based on whether you need to rent furniture, hire a professional stager, or make minor decor adjustments. Typically, staging costs can range from a few hundred to several thousand dollars.
Additionally, minor repairs and renovations can help increase your home’s appeal and value. These costs are variable and depend on the current state of your property and how much you’re willing to invest to make it market-ready.
Moving Costs
Moving out can incur significant expenses, especially if you’re relocating to a different city or province. Professional movers can charge anywhere from a few hundred to several thousand dollars, depending on the distance and the volume of belongings to be moved.
Mortgage Penalties
If you have a mortgage on your property and you sell before the mortgage term is complete, you might be subject to penalties. These penalties can be substantial, especially if you have a fixed-rate mortgage and the lender charges the greater of three months’ interest or an interest rate differential (IRD). Checking with your mortgage lender before deciding to sell can help you understand these costs and factor them into your financial planning.
Real Estate Fees and Taxes
In addition to the realtor’s commission, other real estate-related fees include the potential land transfer tax (which the buyer typically pays) and property taxes, which need to be up-to-date at closing. Sellers are responsible for their share of property taxes up to the closing date.
Marketing and Advertising Costs
While many real estate agents include marketing services in their commission, some may charge additional fees for premium listings, professional photography, and virtual tours. These tools can be crucial in reaching more potential buyers and achieving a faster sale, so consider the value they might add.
Closing Thoughts
The process of selling a home involves numerous steps and expenses, each contributing to the ultimate goal of a successful and profitable sale. Being well-informed and prepared for these costs helps ensure there are no surprises along the way.
To navigate these waters effectively, partnering with a trusted real estate professional who understands the local market and can guide you through each step is invaluable. As someone deeply committed to my clients’ interests and experienced in the Ontario real estate market, I aim to make the selling process as transparent and seamless as possible, ensuring you feel confident and supported from listing to close.
Remember, each property and situation is unique, so tailor your selling strategy to fit your specific needs and circumstances. By doing so, you can maximize your returns and achieve your real estate goals in Ontario.
If you’re looking to sell your home, here are some other great articles to take a look at:
- How To Sell Your Home & Other Great Tips
- What Is The Process Of Selling A Home?
- How To Determine The Value Of A Home
For plenty of other great content, make sure we’re connected on social @serenaholmesrealtor and you’ve subscribed to my YouTube Channel. And, for other articles specific to real estate investing, click here.
And, if you’re thinking about buying, selling or investing in Durham Region or Toronto, let’s chat! I can be reached at 647-896.6584, by email at info@serenaholmesrealtor.com or by filling out this simple contact form. You can also kick off your search for Durham Region homes for sale by clicking here.
