The Cost of Selling Your Home

First-time home sellers might be excited at the prospect of selling their home to make a profit, as they should be, but don’t forget about the costs attributed with selling your home!

Property costs

Before closing the sale, the home seller will be held responsible for any maintenance fees that are left to be paid (for condominium dwellers) or underpaid realty taxes. Property taxes imposed by municipalities also need to be paid if they’re still outstanding. If the closing is in the middle of the month, the cost would be divided between the home seller and buyer. Since the home is technically yours until closing, you will also still be responsible for utility fees and expenses associated with living there (like: telephone, heating, cable, internet, electrical and water services.)

The agent

Though the exact amount is negotiable, your realtor will take a percentage (usually between 3-7 percent) of the selling price. On top of that, you will have to pay a sales tax on the commission. This is why some people choose to sell their homes privately, but it might not be worth the trouble and hiring a professional could ultimately increase how much you sell the house for. To give you a clearer picture, if a house sells for $350,000, a 4 percent commision will cost about $14,000. If you are bold enough to try to sell your own home, a good idea is to hire an appraiser (which can cost between $200-$500) and a real estate lawyer who will write the contract for you with valuable expertise.

The lawyer

In terms of legal fees, for homes selling under $500,000 you can expect to be spending around $1,200 between the costs of disbursements, registration fees and sales taxes on everything.

The bank

In the rare scenario where your home is completely paid off, you don’t have to worry about these! For everyone else (the large majority), you will have to pay a fee to discharge your mortgage. These fees vary according to the bank you deal with, for a list click here. Depending on what kind of mortgage you have, you may also be subject to paying prepayment charges which amount to several months’ worth of mortgage payments (depending on how many years you had left and the interest rate).

Moving expenses

If you’re a DIY-er, you can avoid a lot of frustrating costs, but sometimes closing dates sneak up on you. If this is you, remember to keep moving company costs in the budget! Renting trucks, moving insurance, storage costs, and packing companies are plentiful, so if you’re going to employ someone to provide these services, shop around and try to find something that will keep the costs to a minimum.

With some strategic planning, you can keep many of these costs low, so make sure to plan ahead. Good luck selling your home!