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You already understand the importance of hiring a REALTOR®, but what are the fees that you will incur? As a seller you don’t pay for any inspections requested by the buyer or a land titles transfer fee but there are a few costs that you will encounter.
Commissions
This is the big one. As a seller you pay both the buying and selling agent’s commissions. When you purchase a home, you won’t have this cost. This will come out of your proceeds at the end from the lawyer. Commissions are typically a percentage of the sale price of the home and most often you will see a percentage that looks like 6/4/2. This means that the commission is 6% of the 1st $100,000, 4% of the 2nd $100,000, and 2% of any remaining balance. I also can offer a flat fee commission. I find that helps with those who are sticking to a strict budget and need to know the amount they will be paying upfront. Remember, I only get paid if your house sells.
Legal
There are also legal fees associated with the sale of your home. Although it’s less than if you were purchasing, they will cost you usually between $700-$800 + GST + PST
Penalties
There may be a payout penalty on your mortgage if you are planning on selling and paying out the mortgage before your term is up. The penalty is usually 3 months of interest or the interest differential with your rate and what the current rate- whichever is higher. If your mortgage has a portability clause and you are planning on buying something after you sell, that is a great way to avoid the penalty altogether.
Miscellaneous
If you are planning on hiring cleaners to do a deep clean pre-sale, hiring a carpet cleaner, or hiring someone to do repairs, these will all have to be accounted for in the budget.
These costs and fees may seem like a lot of money but they are designed to ensure that you will achieve the most money once your house does sell and some are unavoidable. It’s better to know up front what these costs will be and will make budgeting for the new house that much easier.
