Financial Considerations

What does it cost to sell?

Pre-listing

You only have one chance to make a first impression on the marketplace, and typically most sellers need to invest at least some time, but also some money to prepare the property for sale. The way we live and the way we sell should be fundamentally different in many ways, and the best way to position your home for a successful sale is to make it as appealing to as many people as possible, and to present it in a way that they envision themselves living there instead of you.

Some common expenses (time and/or money) often include:

Painting and touch ups
A good cleaning
De-cluttering
Minor repairs

Sometimes a few additional items are recommended to make your home as salable as possible or to achieve that ‘move-in ready’ status to reach top dollar.

Meeting with your Realtor® as soon as you start planning to get your home ready for sale is ideal, as we can guide you to ensure your time and money is being well spent and can assist you in hiring the best people to do each job.

It’s common for clients to reach out to us months in advance of wanting to sell for advice and recommendations.

Commission

For most sellers, the commission involved in selling your home will be the biggest cost associated with the sale. There is an ever-increasing variety of options and commissions on the market ranging from flat fees to 6% of the selling price. Along with these options comes a wider range of skills, services, inclusions and results. If considering a discount brokerage or flat-fee service to sell your home, ensure you know what is included, what level of experience and track record you are getting, and where liability falls if you run into trouble.

Questions on inclusions should involve whether staging, accessories, props or furniture are included in the fees. Ask whether they use a professional photographer and videographer, and are aerial shots and video offered. Find out what marketing is included, both online and print. Ensure you are comfortable with their method and frequency of communication, and so on.

When you hire a Realtor® to sell your home, the commission is generally split between the Brokerage that represents you, the seller, and the Brokerage that represents the Buyer. Your Realtor® and the Buyer’s Realtor® will then each be paid a portion of that commission from each Brokerage. HST is payable on top of the total commission and your property lawyer will pay each Brokerage respectively after receiving the funds from your Buyer on closing day.

Costs involved in selling a condo

One of the standard conditions outlined in a Purchase Agreement when you sell your condo will be to provide the Buyer with a list of documents obtained from your condo management company or President.

These documents include:

The Deed
Declaration
By-laws
Common element rules
Most recent financial statements
Reserve fund study
Meeting minutes

An estoppel certificate will also be ordered to be delivered to the Buyer within 10 days prior to closing. There is typically a fee to obtain these documents from the condo corporation that ranges from $25 to several hundred dollars depending on your board. It typically takes a couple of days to acquire these and having them on hand immediately after listing will be one less thing to do when you have an accepted offer.

Mortgage

There are lots of options to consider when you are selling your home in relation to your mortgage. You can typically transfer the remaining mortgage on your current home to your new home (if that purchase happens within 90 days of closing) and blend any additional amount you are adding to it, which is an excellent idea if you have a lower interest rate than those currently being offered.

If you are not purchasing another property and you need to sell before the term of your mortgage contract is up, you will need to pay a prepayment penalty which is typically 3 months of interest, but can also be much more depending on your lender and type of mortgage contract you signed. Make sure you contact your lender to find out exactly what costs you will incur to sell so you do not have any unpleasant surprises on closing day.

Summary of Costs

A few days before closing, your lawyer will meet with you to review the final steps of the process with a breakdown of all costs and adjustments.

Prepaid or outstanding property taxes and condo fees will be adjusted from closing day. If you have an oil or propane tank, you will be responsible for ensuring they are full on closing day and your lawyer will apply a credit in your favour for each full tank at the rate of fuel on closing day. There will be a final tally showing you exactly how much you will net or owe.

We will thoroughly review the costs associated with selling your home with you in our initial consultation. We like our clients to be fully informed and comfortable with everything from the get go. Surprises are for birthdays – not for home sales!