Just as with buying, it is important to budget for all the expenses related to the sale of your house. Like with anything else, the devil is in the details and there are a number of incidentals that can really add up on your way to closing day.
Here is a list of some typical costs associated with selling a home. Depending on your unique circumstances and location, other costs may apply and the amounts will vary.
Obviously you aren’t going to forget about this one, but it’s here for the sake of thoroughness. Unless you plan on renting or have other arrangements, you’ll need a new house once you’ve closed the deal on your current home. This will be your biggest expense by far, but hopefully the proceeds from selling your old house will augment the cost of the new house. If you still owe on your current mortgage, you may be able to transfer it to your new home, pay it off early, or have the buyer take it over.
When you’re involved in a financial transaction like the sale of your home, you will want to be sure you are protected. Your real estate lawyer or notary will ensure that the buyer has made good on all terms outlined in the offer to purchase, and that you have met your legal obligations so that the deal may close. Legal fees vary, and the total cost depends on the extent of services provided. Typically they are around $600- $1000. You will also be responsible for disbursements (any costs related to handling your file, such as long distance calls and travel). Our fee charged to sell your property is 7% on the first $100,000 and 2.95% on the balance.
This might not be a cost for you, depending on how your property tax and utility bill payments are scheduled. If you prepay these expenses, then you can expect the buyer to refund you the difference by closing day. If, however, you don’t pay these expenses in advance, it will be you paying the buyer for the amount accrued prior to possession date. Your real estate lawyer will calculate the exact amount.
Although this is entirely optional, many sellers choose to commission a professional house inspection before the buyer’s inspection (and sometimes even before the house is put up for sale). This protects you from any unpleasant surprises uncovered by the buyer’s inspector that might jeopardize the sale. A little advance notice gives you time to repair these issues. Expect to budget around $500.
When it comes time to show your home to prospective buyers you want your house looking its best. Some renovations can actually return your investment in the value they add to your selling price. Other fix-ups are expenses that you’ll just have to absorb in order to make your house attractive to buyers. Too many serious issues left unfixed may make a home unsellable.
We can advise you on a professional and reliable moving company.
All lenders have different ways of calculating mortgage penalties. It is important to speak with your mortgage advisor prior to listing your home to have an idea of the cost to expect. Some penalties can be thousands of dollars and it is important to know in advance of selling. Variable mortgages typically have a 3 month interest penalty and fixed term mortgages will have the greater of either a 3 month interest penalty or the interest rate differential (the difference between the rate of your existing loan and current interest rates for the remainder of the mortgage term). For more information on penalties, please speak with you mortgage advisor or contact the Mike and Will Team.