As a real estate agent, I’m often asked what it costs to sell a house. If you’re thinking to yourself ‘it costs money to SELL your house!?’ – then this blog post is for you. It’s easy to forget that selling your home isn’t just about collecting money from buyers in exchange for your home. In reality, selling involves a lot of preparatory, precautionary and procedural costs.
1. Renovations
We’ve been talking a lot about cheap and effective ways to prepare your home for sale. Unfortunately, cheap isn’t free. Easy upgrades like painting and decluttering can still cost several hundreds or thousands of dollars – especially if you’d rather pay someone to do them for you.
For larger scale changes, like kitchen or bathroom overhauls, it’s easy for the budget to get out of control. The good news is, if you spend wisely, you’ll see a return on your investment as soon as you sell. It’s best to ask your realtor what upgrades are worth it, and what you should pass on.
2. Storage and Staging
A well-staged home goes a long way towards increasing the perceived value of your home. Professional stagers will swap out your furniture and decor in place for something more modern and suitable for your home’s architecture and floor plan. Depending on the size of your house, and how many rooms should be staged, this can cost anywhere from $3,000 to $12,000.
While your home is being staged, there’s a good chance some of your own furniture will need to go – this means finding a place to store it while your house is listed. The faster your home sells, the lower this cost!
3. Home Inspection
In today’s market, it’s pretty rare to find a real estate transaction that isn’t dependent on the results of a home inspection. If you’re hoping to close a sale quickly, this is something you’ll want to do in advance and offer to potential buyers instead of waiting for them to conduct one themselves (although some buyers will still insist on having their own home inspector do a report). On average, a home inspection costs $550.00
4. Commission and Legal Fees
The biggest cost associated with selling is the commission paid to the real estate agents. Depending on what services and experience you are looking for, there are a few options involving different commissions.
The least expensive option is to sell your home on your own. Unless you are well versed in the real estate market, the value of your home, and the legalities of home sales, this can be tricky. In this case, you’ll still pay some commission to the buyer’s agent.
Ontario realtors charge anywhere from 1-6% to list a home, the exact percentage depends on the agent’s experience and service offering. Many agents will include professional photography, marketing, and even staging as part of their services offered.
Legal fees are another sneak add-on to the cost of selling. Chestnut Park works with an incredible internal team and some of the best real estate lawyers in the city. General fees vary, but on average fall in the range of $1,500-$2,000
Perhaps the most overlooked cost is that of HST. Both the aforementioned services are subject to HST and can (easily) sneakily add five to ten thousand dollars to your bill.
5. Mortgage Penalty
If you have a mortgage on your current home, this is something to think about. Usually, you can apply the balance on your existing mortgage to your new mortgage, but in some cases, this isn’t possible. If you’re selling your home and do not buy a new one, or you fail to do so within 90 days or closing the sale of your current home, you will likely have to pay a penalty for repaying the mortgage prematurely. This can run you thousands of dollars, so make sure you read the fine print and understand the ramifications of moving your mortgage!
