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Hidden Costs of Selling a Home

Hidden Costs of Selling a Home

By

David Doe
*

Published in

Real Estate
*

04 Dec 2021


You've spent years accumulating equity and improving your home, and now it's time to sell. You might expect to be handed an extensive, fat check when you sell your home, but don't get your hopes up. The costs of selling a home can quickly add up. Before selling, there are different fees and expenses to consider. These additional fees and taxes should account for 10% or more of your final sale price. Here's a quick rundown of the hidden costs associated with selling a home in Canada. You may not be aware of several hidden home selling costs if you sell your home. These expenses can reduce the amount you expect to earn or put down on your next home. You will get the most out of your home sale if you carefully know these fees and budget. Are you all set to sell your home and relocate? Make sure to factor the costs into your budget. Find out how much you can expect to get for your home when you sell it !

lawyer fees

Lawyer Fees

If you're dealing with a property exchange, you'll need the assistance of a professional lawyer to ensure everything goes smoothly. Your lawyer will clear the utilities, discharge the title and mortgage, and handle the home transfer from you to the new buyer. A lawyer's services will cost you between $500 and $1,500. Keep in mind that you'll have to pay for the cost of filing paperwork with the government, as well as disbursement fees and administrative costs like mailing documents.

real estate agent fees

Real Estate Agent Fees

Remember to factor in the cost of real estate agent commissions if you plan to sell your home through a real estate agent. These commissions typically range between 3% and 7% of the final sale price. So even if you list your home yourself to save money on a discount listing agent or negotiate a lower commission, you'll almost certainly have to pay a buyer's agent in the range of 3% to 4%, which means you're not saving as much as you think. You'll have to do the entire grunt work yourself if you sell FSBO (for sale by owner). This includes determining the appropriate selling price, hosting open houses, and negotiating with potential buyers. Even then, it would help if you offered a buyer's agent commission to encourage real estate agents who have ready-to-buy customers. Consider your time and skill level when deciding whether or not to work with a real estate agent for your listing. Otherwise, you risk investing too much time in the property to make up for the cost savings.

staging a house

Staging a House

If your home is vacant or you're selling the home of an elderly relative, staging it could help you sell it. A staged home appeals to buyers because it gives them the impression that it has been lived in. The cost of staging a home can run into thousands of dollars, but it is usually money well spent. In addition, it can attract more and more buyers to your house, resulting in a higher sale price if bidding is being placed. So make sure to give time to stage your home properly before selling for a better & faster sale !

Mortgage Penalties

Mortgage Penalties

You may be bound to your mortgage for a set number of years. You'll have to pay the penalty if you pay it off early or remortgage with another bank. The disadvantage is usually calculated by multiplying the amount owed by the number of days left on loan. If you don't have the funds to pay for it, 24Cash.ca can help you with a quick personal loan. This will provide you with some fast cash that you can repay later. It's a good idea to call your bank and ask how much it will cost to pay off or terminate your mortgage. If you're buying a new home right away, you might be able to get your bank to waive the penalty if you get a new mortgage from the same lender. If not, look for a bank or mortgage broker that offers flexible prepayment and other scenarios options.

Substantial Repairs

Substantial Repairs

You may be required to make significant repairs before putting your home on the market. For example, if your roof is leaking, you will need to replace it. Many buyers will be turned off by a home that requires extensive repairs. If significant issues are discovered after your home has been sold, you may be responsible for paying a professional to fix them. If you sell your house "as is," on the other hand, you can disclose any problems you are aware of and avoid any repair costs. A home sold without a legal warranty, on the other hand, will have a lower total cost and value. The buyer understands no guarantees and accepts the home's potential flaws. The seller typically receives a lower price for the house but is not legally liable for future repairs.

Property Assessment

Property Assessment

A home must be professionally measured before it can be sold. This will provide the actual square footage of the house and property, which many mortgage companies require. If the property hasn't been surveyed in a long time, the transaction may need to be notarized. A detailed document is being prepared, and the sooner it is updated, the easier it will be for potential buyers to move forward with their mortgage applications. Depending on the size of your lot and other factors, a professional property survey can cost anywhere from several hundred to a thousand dollars. There are also legal costs to consider when selling a home. Depending on where you live, these costs may differ. The seller usually pays for the notary of the seller's choice. The cost of notarizing a home sale is around $1,000.

Property Taxes & Capital Gains

Property Taxes & Capital Gains

You'll have to pay your share of property taxes, as well as a 1% to 2% land transfer tax that varies by province. The amount varies depending on the time of year you sell and the tax collection procedures in your region. For example, if you haven't paid your taxes for the previous year, you'll have to do so before the sale is completed. If the house isn't your primary residence and it sells for more than you paid for it, you'll have to pay a 50% capital gains tax on the difference between the purchase price and the selling price.

You can prepare and budget for some of the home selling hidden costs now that you're aware of them. It's a good idea to have some extra cash on hand to cover such costs. If you are looking to sell your home in Canada and find a real estate agent you can always contact us !

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