If you’re thinking about selling your home in Newmarket, the first question is usually, “How much is my home worth?” The next question is just as important: How much will I have left after the sale?
The sale price is only part of the picture. Depending on your mortgage, the condition of your home and your plans for moving, there may be several costs to consider. Here’s a guide to help you plan.
1. Real estate commission
For most sellers, real estate commission is one of the largest costs. The amount is agreed upon between you and the brokerage and set out in your listing agreement. There is no commission rate fixed by the government or the Real Estate Council of Ontario.
When discussing commission, ask what is included, such as photography, video, marketing, staging advice, negotiation and support through closing. HST generally applies to real estate commission in Ontario, so remember to include it in your estimate.
2. Mortgage balance and possible penalties
If you have a mortgage, the outstanding balance generally needs to be paid from the sale proceeds unless you arrange another option with your lender.
A prepayment penalty may apply if you pay off a closed mortgage before the end of its term. The amount depends on your contract, lender and circumstances. Your lender may also charge a mortgage discharge fee.
Before deciding when to sell, ask your lender for your current balance, an estimate of any penalty on your expected closing date, whether you can transfer your mortgage to another home and any discharge or administrative fees. See the Financial Consumer Agency of Canada’s guide to selling a home for more information.
3. Legal fees
Your real estate lawyer handles the legal work needed to complete the sale. This can include preparing documents, dealing with the mortgage and transferring the property to the buyer.
Legal fees vary depending on the transaction. Ask your lawyer for an estimate that includes fees, HST and disbursements.
4. Preparing your home for sale
Every home is different. Some are ready to photograph after cleaning and decluttering. Others may benefit from painting, small repairs or staging. Possible costs include landscaping, storage, furniture rental and other work needed to prepare your home.
Before starting a major renovation, talk to your real estate agent about whether it makes sense for your home and timeline. Simple changes such as better lighting, fresh paint and a tidy entrance can make a strong first impression.
5. Moving costs
Moving costs are easy to overlook when you’re focused on the sale. Depending on your plans, you may need to budget for movers, packing materials, storage or temporary accommodation. If you’re downsizing, allow time to sort through furniture and belongings you no longer need.
6. Adjustments and other expenses
Your lawyer will prepare a statement of adjustments for closing. Depending on what has already been paid, you may receive a credit or owe an amount for items such as property taxes or condo fees.
If you’re buying another property, remember that the purchase has its own costs, which may include land transfer tax, legal fees and moving expenses.
You should also report the sale of your principal residence on your tax return. Whether any tax applies depends on your situation. If the property was rented out or used for business, speak with an accountant. Read the Canada Revenue Agency’s principal residence guidance.
How to estimate what you’ll have left
Estimated sale price minus your mortgage balance, commission and applicable HST, any mortgage penalty and discharge fees, legal fees, preparation and moving costs, plus or minus closing adjustments, equals your estimated amount remaining.
This is a starting point. The final amount will depend on your sale price, closing date and actual expenses.
Thinking about selling your Newmarket home?
Whether you’re moving to a larger home, downsizing or just curious about your options, we can help you understand what similar homes are selling for and prepare an estimate of your selling costs.
Contact Nikolay and Tatiana or call 647-833-3287. We’re happy to talk through your plans and answer your questions.