{"id":12891,"date":"2021-11-23T08:00:00","date_gmt":"2021-11-23T13:00:00","guid":{"rendered":"https:\/\/www.zolo.ca\/news\/?p=12891"},"modified":"2021-11-28T23:25:55","modified_gmt":"2021-11-29T04:25:55","slug":"hidden-costs-of-selling-a-home","status":"publish","type":"post","link":"https:\/\/www.zolo.ca\/blog\/hidden-costs-of-selling-a-home","title":{"rendered":"8 Hidden Costs of Selling a Home"},"content":{"rendered":"\n

After years of building equity and improving your home, you’re finally ready to sell. You may envision getting handed a big, fat check after you sell your home<\/a> \u2013 but not so fast. The cost of home selling can add up quickly.<\/span><\/p>\n\n\n\n

There are several fees and expenses to consider before selling<\/a>. You should expect these additional fees and taxes to add up to about 10% or more of your final sale price. Here’s a brief overview of the hidden costs of selling your home in Canada.<\/span><\/p>\n\n\n\n

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1. Lawyer Fees\u00a0<\/span><\/strong><\/h2>\n\n\n\n
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Anytime you’re dealing with the exchange of property, you need the help of a professional lawyer to make sure everything goes smoothly. Your lawyer will discharge the title and mortgage, verify all the return of all prepaid expenses, clear utilities, and handle the transfer of the home from you to the new buyer.<\/span><\/p>\n\n\n\n

You can expect to pay around $500 to $1,500 for a lawyer’s services. Keep in mind, though, that you will also need to pay for the cost of filing paperwork with the government, disbursement fees and administrative costs such as mailing documents. <\/span><\/p>\n\n\n\n

2. Real Estate Agent Fees<\/span><\/strong><\/h2>\n\n\n\n
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If you plan to sell your home through a real estate agent, don’t forget about the cost of <\/span>real estate agent commissions<\/span><\/a>. These commissions typically range from 3% to 7% of the final sale price. Even if you list your home by yourself to enlist a discount listing agent, or <\/span>negotiate commission<\/span><\/a>, you’ll likely still have to pay for the buyer’s agent in the amount of 3% to 4%, which means you’re not saving as much as you think.<\/span><\/p>\n\n\n\n

Related content<\/p>

What Happens to Your Mortgage When You Sell Your Home?<\/a><\/p><\/section>\n\n\n\n

If you sell FSBO (for sale by owner<\/a>), you’ll have to do all of the grunt work by yourself. This includes choosing the right price, hosting open houses, and negotiating with potential buyers. Even then, you’ll want to offer a buyer’s agent commission as encouragement for real estate agents who have eager customers ready to buy. <\/span><\/p>\n\n\n\n

When determining whether to work with a real estate agent for <\/span>your listing<\/span><\/a>, consider your time and skill level. Otherwise, you might end up sinking too much time into the property to justify the cost savings. <\/span><\/p>\n\n\n\n

3. Mortgage Discharge Fees<\/span><\/strong><\/h2>\n\n\n\n
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If you are like most Canadians and carry a mortgage on your home, you will have to pay a mortgage discharge fee to have your lender release the collateral hold on your home. <\/span><\/p>\n\n\n\n

Mortgage discharge fees are a necessary part of home selling and transfer the property from the home seller to the new owner. Still, these fees can cost as much as $700 and are in addition to any prepayment penalty you may incur \u2013 which brings us to our next cost to sell.<\/span><\/p>\n\n\n\n

4. Mortgage Prepayment Penalty<\/span><\/strong><\/h2>\n\n\n\n
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Depending on the terms of your mortgage, you may be charged a mortgage prepayment penalty from your lender. While the exact number depends on the number of years left on your loan and the interest rate, the penalty is usually around <\/span>three month’s worth of interest<\/span><\/a> on your outstanding balance. <\/span><\/p>\n\n\n\n

Some banks use the interest rate differential if it is higher than the previous option. If you are buying another home, you may be able to transfer your mortgage and avoid prepayment penalties altogether.<\/span><\/p>\n\n\n\n

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5. Prorated Property Taxes and Capital Gains Tax<\/span><\/strong><\/h2>\n\n\n\n
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In addition to a 1% to 2% land transfer tax that varies from province to province, you’ll also have to pay your share of property taxes. The amount varies depending on the time of year you sell and your local provinces’ procedure for collecting taxes. For example, if you have yet to pay last year’s taxes, you’ll have to pay them before the sale is complete. Check out this land transfer tax calculator<\/a> from Ratehub.ca to estimate your cost. <\/span><\/p>\n\n\n\n

If the home is <\/span>not <\/span><\/em>your primary residence, and it sells for more than you bought it, you’ll also need to <\/span>pay a 50% capital gains tax<\/span><\/a> on the difference between the original purchase price and what you sold it for. <\/span><\/p>\n\n\n\n

6. Staging Your Home<\/span><\/strong><\/h2>\n\n\n\n
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After you declutter and get your home spotless for open houses and showings, you may wish to pay someone to stage your home to generate a higher offer price. If you’ve already moved out and your home doesn’t have any furniture, this is a near-essential investment. Typically, staging costs anywhere from $500 to $15,000, depending on how long your home is on the market, but not everyone has that kind of money to spend. <\/span><\/p>\n\n\n\n

If you feel staging will help you sell but you don’t have the extra cash, try to stage your home like a pro<\/a> on your own. You might also consider paying a house cleaning service for a good deep clean, as well as having your carpets cleaned professionally to help with the overall appearance of your property.<\/span><\/p>\n\n\n\n

7. Home Maintenance and General Repairs<\/span><\/strong><\/h2>\n\n\n\n
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As a home seller, you should plan to pay upwards of $1,000 for home repairs \u2014 more, if you’re one who tends to put off maintenance projects or your home is especially old. If you have a full laundry list of upgrades or repairs needed, prioritize by determining <\/span>which ones may generate higher offers<\/span><\/a> or will potentially be requested by a buyer. While a new toilet isn’t likely to create excitement from potential buyers (unless it was hideous to start with), a conservative kitchen upgrade might be the ticket.<\/span><\/p>\n\n\n\n

Related content<\/p>

How Long Should You Live in a Home Before Selling?<\/a><\/p><\/section>\n\n\n\n

Real estate agents may recommend certain repairs before even listing your home if they think it will generate a higher sale price as a result. It’s likely a new HVAC system or roof would be a significant selling point to a buyer, as would a fresh coat of neutral paint in a high traffic area.<\/span><\/p>\n\n\n\n

After they’ve submitted an offer and had the home inspected by a professional, a buyer may request some repairs. These may include safety-related maintenance required by their lending company or only repairs they request. The home seller may be able to negotiate which repairs you perform or reduce the final selling price to make up for it.<\/span><\/p>\n\n\n\n

8. Moving Costs<\/span><\/strong><\/h2>\n\n\n\n
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There comes a time in your life when you should probably stop relying on your buddy and his pick-up truck to haul your stuff from one house to another. Pizza and beer only get you so far. <\/span><\/p>\n\n\n\n

Related content<\/p>

Selling a Home in a Buyer’s Market<\/a><\/p><\/section>\n\n\n\n

Regardless of whether you hire professional movers or choose to DIY your move, you should at least prepare for the costs of a moving truck. Plan to budget even more if you’re making a cross-country move<\/a>, as you’ll probably have to stay a night or two in a hotel as well.<\/span><\/p>\n\n\n\n

With a benchmark of all of the costs associated with home selling, you should be able to come up with an estimate on the cost of home selling and start to prepare for these additional expenses. If your goal is to make a profit when you sell<\/a>, remember that sometimes you have to invest back into the home to create that benefit.<\/span><\/p>\n\n\n\n

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Selling your home isn’t as quick and easy as you might think \u2014 and it’s also not as cheap<\/p>\n","protected":false},"author":58,"featured_media":15567,"comment_status":"closed","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48],"tags":[13580,13582,13583,13581,13584],"guide":[],"class_list":["post-12891","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-selling","tag-costs-of-selling","tag-for-sale-by-owner","tag-real-estate-agent-commissions","tag-selling-your-home","tag-staging-your-home"],"acf":[],"zolo_excerpt":"","_links":{"self":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/12891","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/users\/58"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/comments?post=12891"}],"version-history":[{"count":12,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/12891\/revisions"}],"predecessor-version":[{"id":19718,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/12891\/revisions\/19718"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/media\/15567"}],"wp:attachment":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/media?parent=12891"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/categories?post=12891"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/tags?post=12891"},{"taxonomy":"guide","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/guide?post=12891"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}