During the home selling process there are numerous costs of which you should be aware both before and after the property sells:
Home Repairs
Before the home gets listed you may incur some expenses to get it ready for the market. Fresh paint may cost a few hundred or a few thousand. Landscaping and other repairs may come into play as well and require substantial investments depending on what needs to be done.
Staging Costs
If you decide to stage your home before selling, the fee to do this usually comes in two parts. The initial consultation fee of a couple of hundred dollars and the furniture rental fee that can easily become a few thousand a month, depending on what and how many pieces of furniture you rent. Many stagers waive the initial consultation fee if you go ahead with furniture rentals.
Home inspector pre-inspection reports
Sometimes Sellers have their house inspected prior to putting it on the market. This report can give assurance to buyers contemplating submitting an offer on the property. Pre-inspection reports tend to be priced in the four to six hundred dollar range. Your Realtor can advise you whether or not to get a pre-inspection report.
Penalty for early discharge of Mortgage
If you have to discharge your mortgage upon completion of your sale, you may incur a discharge penalty from the mortgagee to do this. Talk to your mortgage broker or bank to find out what these costs may be. Even open mortgages can incur a processing fee to be discharged.
Legal fees
You will need a lawyer to act on your behalf in the sale of a home as well. Legal fees for a home’s sale are significantly less than on a home’s purchase. Many legal fees in this regard are in the range of a thousand dollars rather than thousands of dollars.
Real Estate Brokerage Fees
Most Realtor fees are based upon the selling price of the property. Usually 50% of the gross commission goes to the Co-operating Realtor and 50% goes to the Realtor who listed your house. The government also requires that HST be charged on collected commissions as well.
Moving Costs
It is difficult to estimate how much one should budget for this, as there are so many factors to consider. Moving costs can run from the hundreds to the thousands of dollars.
Capital gains tax
Primary residential homes in Canada are exempt of capital gains tax. Investment properties are not. Review the matter with your accountant if you want to look into it further.
Summary
Budgeting and planning for the costs involved in the sale will avoid nasty surprises when it comes time to close the deal. That is a good thing.
