When you’re deciding to sell your home and make your next move, it’s smart to sit down and crunch the math on what the actual costs of selling will be – especially if you plan on using the equity in your home for the down payment on a new one.
Here’s a basic list of some of the common costs associated with selling a home:
- Realtor Commission – There is no set commission amount as each area and Agent can structure the commission differently. Make sure you discuss this with your Realtor up-front (before listing) to get a very clear picture on the costs and services offered. Don’t forget that there is GST payable on the amount of commission you pay to your Realtor so add 5% of the commission amount to your total amount. The commission is usually taken out of your sale proceeds on the completion date.
- Legal or Notary Public Fees – You will have some legal fee costs associated with removing yourself (and potentially your mortgage) from the title of the home to get the title ready to be transferred to the new purchaser.
- Mortgage payout fees – If you have a mortgage on your current home, before selling make sure you find out from your Mortgage Broker or lender if there is an early payout penalty (and what it is), if the mortgage is portable or assumable (to potentially save the penalty), and what the discharge fees are.
- Adjustments – Depending on your closing date you may required to reimburse the buyer for any prepaid property taxes.
- Moving fees – These costs vary depending on how good your friends are (kidding!). Again, if you’re going to hire movers, check out the costs beforehand so that you don’t have a hidden surprise.
This list can go on if you decide to hire a contractor or staging service to spruce up your home before selling. Staging can be expensive but many clients and Realtors would agree, that making your home look it’s best can usually bring the best price and the quickest sale.
Bottom line is make sure you do the math. Take the time to investigate and sit down to figure out what your costs will be and what you’ll be left with in your equity after the smoke clears.
If you have any questions or need help working these figures out, please feel free to give our office a call or shoot us an email. We’re mortgage professionals that eat and breathe mortgages every day so we’re here to help you through every aspect of your housing/mortgage process.