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Blog by Krisztina Neglia

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The True Cost of Selling a Home in Ontario

Cost of buying1

If you’re thinking of selling your home, there are various costs you will pay. There are obvious costs and other hidden charges that may surprise you. Real estate experts suggest that it’s important to research all costs before selling your home. You’ll have knowledge of what to expect and that could save you a few bucks. If you are looking to sell your home in Ontario, here are the costs that you’re likely to face.

Real Estate Fees

If you are using a real estate agent to list and sell your property, there is a fee you’ll pay once the home is sold. This fee varies across different areas but you can expect to pay between 5%-7% of the selling cost. This fee will be split between your real estate agent and your buyer’s agent.

Mortgage Fees

If you’re selling your home before you’ve finished paying off your mortgage, you may be required to pay a discharge fee of $270 to the bank. In the case of a closed mortgage, you may be required to make prepayment costs which may be equivalent to several months of mortgage payments. Your mortgage costs are largely determined by interest rate and the number of years outstanding.  If you’re buying another home, you have an option of transferring your mortgage to the new property.  

Legal Fees

A lawyer will help you with the purchase and sale transactions. Legal fees may vary with firms, but you can expect to pay a minimum of $500. Registration fees, related expenses and disbursement charges could cost you more. You will pay sales tax which varies with where you reside.

Property and Utility Tax

Home owners are required to pay property taxes annually or twice a year. The municipality requires you to continue paying property tax until you have closed the deal. For instance, if the deal closes in the middle of the month, you’ll have to pay for the first half.

Property Costs

These costs have to be paid off before your house passes on to the new owner. Any pending maintenance fee and liens on the property have to be settled.

Moving Expenses

Most people forget to add this cost to their expense list. You’ll be required to rent boxes or buy them, hire the services of a moving company or pay for storage costs.

Capital Gain Tax

Residents of Ontario who sell assets at a profit are required to pay the capital gains tax. For example, if you sell your home, stocks or bonds, the profit you get from the sale will be taxed. In this case, profit is what is left after you have deducted the actual cost of the house from the selling cost.

Hidden Costs

The following costs are often overlooked by most home sellers and could cost thousands of dollars.

Repairs Costs

Most home sellers repair or repaint their homes to make them more appealing to the buyer. Outdated kitchen cabinets or old chipped window frames could be a turn off for potential buyers. Consult your real estate agent and get some good advice on how you can make your home more appealing. Repair costs may quickly add up, therefore, ensure that you factor this cost in your budget.

Styling Fees

Experts advise that it’s important to de-clutter your home to create more space. You can hire a stylist or choose to do it yourself though it may cost you more time and money. For example, you may hold a garage sale and you may need to advertise in a local newspaper or distribute flyers.