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So you’ve decided to move to a bigger or better home…hooray! Below, we look at how to be financially ready for buying and selling and share some tips for reducing upsizing costs.

Costs to Buy & Sell

Upsizing or upgrading your home is expensive. Here are the costs you should be ready for:

Costs to Buy

  • Home Inspection ($400-$600) or condo status certificate ($100)
  • Appraisal or Mortgage Broker Fees
  • CMHC Mortgage Default Insurance (if less than 20% downpayment)
  • Title Insurance (approx $250)
  • Land Transfer Tax (see our calculator)
  • Legal Fees + HST ($1,500+)
  • Adjustments for pre-paid condo fees/taxes/utilities paid by the Seller
  • Utility set-up fees
  • Moving Costs

Costs to Sell

  • Home Prep and Cleaning
  • Staging
  • Pre-listing home inspection or condo status certificate
  • Babysitting and Pet Boarding
  • Mortgage Penalty (if unable to port your mortgage)
  • Bridge financing costs (if your closing dates don’t coincide)
  • Real estate commission + HST
  • Legal Fees + HST ($1,500+)

Read More: Costs to Buy

Read More: Costs to Sell

Costs of Timing Decisions

The decision to buy or sell first may give rise to unexpected costs. Make sure you consider:

  • Bridge financing costs – If you aren’t able to perfectly align the closing dates of the sale of your current home and purchase of your new home, you may be on the hook for bridge financing costs, to cover the bank’s costs of lending you money until your current home closes.
  • Changes in interest rates – If you decide to sell first, interest rates may increase before you’re ready to buy. Avoid surprises by locking in an interest rate with your lender and renewing your pre-approval every 90 days. If interest rates go down, you’ll still be eligible for the lower rates.
  • A lower sale price than expected – If you buy first, what happens if your home doesn’t sell for the price you’re expecting or need? Make sure to underestimate the value of your current home when planning your budget. The only guarantee of how much a home is worth is an offer from a Buyer.
  • Fluctuations in the real estate market – In an ideal world, everyone would sell when the market is hot and buy when it’s not, but you’re just as likely to buy high and sell low. Be ready for volatility in the market and make sure you have a Plan B.

Read More: Should You Buy or Sell First?

The Ongoing Costs of Your Upgraded Home

Most home upgraders fall into one (or more) of the following categories. They want to:

  1. Move to a bigger home;
  2. Move to a home with better finishes;
  3. Move to a different style of home (eg condo to a house);
  4. Move to a home in a better neighbourhood
  5. Do any combination of the above

Bigger, better or both? You’ll almost certainly be looking at higher ongoing costs too.

  • Home Price: Chances are, the price of your next home is more than you’re current one and that higher price tag comes with bigger mortgage payments and higher property taxes too.
  • Upgrading for size? Be ready to spend more money on utility bills, repairs, cleaning, snow removal, gardening and furnishings.
  • Renovations: Make sure to budget for renovations too, and not just the new shiny kitchen or bathroom. At some point, every homeowner spends unsexy money too, whether that’s putting in new drains, a new roof or replacing the furnace – and almost every Buyer has at least one unplanned surprise expense to contend with at their new home.
  • The Condo to House Upgrade: If you’re moving from a condo to a house, you’ll need to budget for garbage, water, higher home insurance premiums and utilities (if they weren’t including in your condo fees). While you might be excited to not have to pay condo fees anymore, owning a house is almost always more expensive than ongoing costs to own a condo.

Read More: Toronto Real Estate Prices by Neighbourhood & Type of Property

Read More: 10 Reasons to Move to a Bigger House

Strategies to Reduce Upsizing Costs

If you’re looking to reduce the expenses of your Big Upsize, consider the following tips:

  • Focus on Your Sale While most upgraders focus on the Buy more than the Sell, it’s important to squeeze every last dollar out of the home you’re selling. That means investing time (and probably some money) preparing and repairing your home, professional cleaning and staging. You’ll want to make sure you hire a top REALTOR too, who’ll guide you on price and negotiation strategy, market your home to as many potential Buyers as possible and help with staging.
  • Shop for Mortgage Rates Make sure to talk to a few different lenders when planning financing – don’t just the bank that holds your current mortgage. It might be worth paying a penalty to break your current mortgage if it means you’ll benefit from years of lower interest rates and lower payments.
  • Change Neighbourhood If you need more space but don’t have much extra budget, consider moving to a different neighbourhood where prices are lower. That might mean being further away from downtown, moving to a transitioning neighbourhood or moving to the ‘burbs.
  • Have a Plan B Sometimes, things don’t go as planned when you buy and sell at the same time, so make sure to be ready for the unexpected. What could happen? You sell your home for less than you counted on and don’t have enough money to close on your new home. You don’t get an offer on your current home, the bank won’t give you bridge financing and you need to find a downpayment to close on your new home. Your closing dates don’t line up and you find yourself homeless for a few weeks until you take possession of your new home. Appraisals come in below what was paid. Lots can happen and temporary accommodations and private money can get expensive. If you’re working with a great REALTOR, they’ll prepare you for the worst-case scenarios

Thinking of a Buying a Townhouse?

Ultime Guide for Buyers

Our most useful articles and resources for home Buyers in the GTA.

Ultimate Guide for Sellers

Our most useful articles and resources for home Sellers in the GTA.

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