Personal Finance

Costs of selling house

  • Last Updated:
  • Jul 2nd, 2015 10:57 am
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[OP]
Deal Addict
Jun 6, 2015
1435 posts
233 upvotes

Costs of selling house

Real estate agent (if you use one) - maybe 5% or 1%
Lawyer fees $1000-1500
Any discharge fees eg. mortgage break penalty if applicable
Moving fees $800

What else?
7 replies
Member
User avatar
Jun 26, 2012
456 posts
81 upvotes
canada
Lawyer fees vary, I just threw out 1000 as a ballpark guestimate in another thread. On a small condo purchase I paid only 300-400 dollars legal fees..

REMEMBER TO CONSIDER YOUR MOVING COSTS! don't ignore it.. and your storage costs if you have to temporarily store furniture
[OP]
Deal Addict
Jun 6, 2015
1435 posts
233 upvotes
Good point moving costs, opening post updated
Deal Addict
Jul 11, 2010
1282 posts
320 upvotes
Toronto
If you have a mortgage not only is there a discharge fee ($300) but the breakage penalty which can be low or very high depending on how long is left in the term and whether it is 3 month's interest or the IRD
Doug Boswell
intelliMortgage Inc. Brokerage #12326
FSRA #MO09002332
Sr. Member
Mar 27, 2009
543 posts
67 upvotes
I just read an article on financial post (I think it was) and the cost to move to a new home can be 10% of the price of the home!

Quite a large sum of money. They broke it down using an example of a 400,000$ home in Toronto.
Deal Expert
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Aug 2, 2010
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Here 'n There
Ancillary to that is the land transfer tax you had to pay when you bought the home. Most people forget about this when they figure out their gain as it is not mortgageable nor does it show in the Agreement of Purchase and Sale so they forget.

On the average price of a single-family detached home in Toronto as of May 2015 of $1.15M that is $38,200.
Sr. Member
Sep 12, 2012
913 posts
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Toronto
If you are selling because you purchased a new home, on top of the Land Transfer Tax there is also the cost for registration fees (approx. $150), title insurance (approx. $750 depending on the price of the house), and prepaid property tax to the previous owner for your portion from the time you take ownership of the home.
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Jan 2, 2012
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Toronto
Carebra wrote: Real estate agent (if you use one) - maybe 5% or 1%
Lawyer fees $1000-1500
Any discharge fees eg. mortgage break penalty if applicable
Moving fees $800

What else?
If you are porting a mortgage from 1 property to the next, then there should be no fees from the mortgage company (but depends on what kind of mortgage product you have). Lender should institute a new blended mortgage rate based on the increased mortgage you require (if porting to a more expensive home) based on current market rates. If there is an gap between sell and buy closing dates while you temporarily own 2 properties, then you can factor in bridge financing costs as well.

If using the same realtor to sell your current place and buy new place, you should not pay more than 1% as a selling commission, since your realtor is already making 2.5% on your purchase. I would budget 1% selling + 2.5% offer to buying agent = 3.5% total for commissions (based on Toronto).

Then as mentioned the lawyer fees and land transfer tax on new purchase are the next biggest costs to consider. Assumed no CMHC fees are applicable since you would be carrying at least 20% equity into the new home.

Smaller fees to consider are if utility companies (cable, internet, phone, gas, hydro, etc) will charge any fees to transfer or set-up new accounts for you at new property.
hamandcheese wrote: and prepaid property tax to the previous owner for your portion from the time you take ownership of the home.
I wouldn't consider that a cost of buying, it's simply an ongoing cost of being a home owner. If you are also selling a home then conversely you would be getting a rebate of the property tax you've paid out in advance, from the new owner buying your place.

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