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Wondering how much it will cost to sell your house or condo? Here’s a breakdown of all the costs you’ll need to be prepared to pay:
Costs to Sell Your Home (The Basics)
Staging and Home Preparation
You only get one chance to make a first impression, and most Sellers need to invest some time and money into home preparation and staging. Potential house preparation costs include:
- Painting (interior or exterior)
- Professional cleaning
- Off-site storage locker or POD
- Staging – from light primping and fluffing to full-on professional staging
It’s easy to spend money and time on the wrong things and there’s nothing more frustrating than finding out that the $10,000 you spent upgrading the kitchen will only increase your price by $4,000.
BREL tip: Talk to a trusted real estate adviser before renovating your home for sale.
Pre-Listing Home Inspection (for houses)
We generally recommend that Sellers get a pre-listing home inspection before they put their house up for sale – especially if the pricing strategy is aimed at getting multiple offers.
A pre-listing home inspection gives Sellers the opportunity to proactively fix any issues with the house before it hits the market, or alternatively, factor the cost of those issues into the asking price. There’s nothing worse than having a Buyer inform you that there’s a buried oil tank in the backyard at the negotiating table! The transparency of a pre-listing home inspection gives Buyers confidence and that means more offers. [Related: Should You Get a Pre-Listing Home Inspection?]
If the hope is to generate a bidding war, a pre-list home inspection is an important marketing tool.
BREL tip: the person with the most information almost always wins a negotiation
Pre-listing home inspections in Toronto cost $400-$600, though some real estate agents (including the BREL team!), cover that expense for Sellers. We consider it an important part of our pricing strategy and a critical part of marketing your home to prospective Buyers.
Status Certificate (for condos)
If you’re selling a condo in Toronto, the Buyer (and the Buyer’s lawyer and lender) will undoubtedly want to review the status certificate of the condominium corporation. The status certificate is the set of documents that describe the legal and financial health of the condo corporation. Most offers to purchase a condo include a condition that allows the Buyer’s lawyer to review the documents to ensure that they are to the Buyer’s satisfaction.
In Toronto, Sellers generally pay the $100 fee to the condo corporation for preparation of the status certificate. Because it can take up to 10 business days to produce the documents, some Sellers pre-order the status certificate before putting their condo up for sale, though many Sellers only order it after reaching a negotiated sales agreement. [Related: All About Status Certificates]
Some Toronto real estate agents, (including the BREL team), include payment for the status certificate as part of their fee.
Real Estate Commission
For most Sellers, the biggest cost to sell their home is the commission paid to the real estate agent. In Toronto, there is an ever-increasing variety of service and commission options to choose from, with differing experience, skills, inclusions and results.
The least expensive option is to sell the home yourself, without the help of a real estate agent. The For-Sale-By-Owner (FSBO) option will require the Seller to have a good grasp of the value of their home, experience marketing and negotiating and a good lawyer to help with the paperwork. While many people do successfully sell their homes on their own, others spend many frustrating months trying and end up hiring a REALTOR. Case in point: this article: Founder of the ForSaleByOwner website Uses a REALTOR to Sell his Qwn House.
When you hire a real estate agent to sell your home, the commission you pay is generally split four ways:
- the agent who works for you, the Seller (aka the Listing Agent)
- the Listing Agent’s brokerage
- the agent who brings the Buyer (aka the Buyer’s Agent)
- the Buyer’s Agent’s brokerage
REALTORS in Ontario will charge anywhere from 1-6% to list a home for sale; the amount depends on the agent’s experience and results, business model, included services and the amount offered to the agent who brings the Buyer.
While discount agents and brokerages don’t generally include many services, full-service agents and brokerages may pay for professional photography, videography, virtual tours, floor plans, online marketing, print marketing, cleaning, home inspections, staging and more.
BREL tip: Ask us to show you how the BREL team’s All-In Pricing means more $$ in our Sellers’ pockets.
Legal fees to sell your home will depend on the law firm you choose and the price of your home. Generally, in Toronto, you can expect to pay around $1,200 to sell a $600,000 home. Check out one of our favourite lawyer’s website, Feld Kalia, for a quick online quote.
Read the fine print! If you have a mortgage on your home, your lender may charge you a penalty if you sell the home during the mortgage period. Most traditional lenders (ie banks) allow you to apply the remaining mortgage balance to the mortgage of a new property (provided you purchase the new home within 90 days of closing), but some mortgages have restrictions. If you’re selling your home and not buying a new one, you will likely have to pay a pre-payment penalty, which can be thousands of dollars. Make sure to talk to your lender before you list your home for sale to fully understand the details of your mortgage.
Other Costs to Sell Your Home
Prior to closing, your lawyer will give you a full breakdown of any other selling costs, which may include outstanding property taxes, utilities or condo fees if you own a condo. The Seller is responsible for these costs up until the date of closing, but if your date of closing doesn’t coincide with the date you normally pay these expenses (it usually doesn’t), then you’ll be responsible for payment of the partial month’s costs.
If you have pets, you’ll likely want to factor in some extra dollars for boarding. It’s much easier for Buyers to view a home without Fido following them around, and there’s no faster way to turn off a Buyer than a dirty litter box. Boarding your pets will hasten your sale.
And last but not least, a piece of good news: the Buyer is responsible for paying land transfer taxes, so that’s one cost you won’t have to budget for!
If you’re wondering how much the costs to sell your house or condo will be and are looking to hire one of the best teams in Toronto to help, get in touch.