Closing Costs When SELLING a House or Condo

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If you’re thinking of listing your house or condo for sale in Toronto and want to know what costs to expect today I’m going to answer that question for you. 

1- Realtor’s Commission:

The most obvious fee that Sellers will have to pay are the commission fees of the Realtors. Keep in mind that the Seller pays both the Listing Agent and the Buyer’s Agent. 

However, you aren’t double-billed. You’ll agree to one total fee and the Listing Agent (who you hire to sell your home) will pay an agreed portion of that total fee to the Buyer’s Agent who ultimately brings the Buyer. 

The total commission is usually 5% of the sale price. 2.5% goes to the Listing Agent and 2.5% to the Buyer’s Agent. 

If you’re doing your research now to determine how much cash you’ll need on-hand then keep in mind that you don’t actually write the Realtor a cheque. The fees are deducted from the proceeds from the sale of the home. And as much as I’d like to say otherwise, HST is added to these fees.

If you’re wondering if you can get a Realtor to list for less than 5% total, be sure to check out my video post called: “The Real Estate Commission Dilemma”

2- Legal Fees & Disbursements: This total can range anywhere from $850 (usually) to $1,500 (again usually) so you can ask your Real Estate Lawyer about those specific fees.

3- Mortgage Discharge:

If you have a “closed” mortgage (vs. an “open” mortgage) and you’re selling your home before you mortgage comes due then you’ll possibly need to pay mortgage penalties and discharge fees to your bank or lender. 

For a variable rate mortgage the penalties are usually three months of interest, plus a discharge fee of $200 to $600, depending on the lender. 

For fixed-rate mortgages the penalties can be much higher, so you should call your bank or mortgage broker and ask them how much it will cost you to break your mortgage early. 

Keep in mind that if you’re buying another property, depending on the lender you might be able to transfer (port) your existing mortgage to a new property at a reduced fee.

As a very important side note, I’ve seen many clients burned when they deal with the banks directly because the banks got them to sign a specific “type” of mortgage that didn’t allow for reduced fees if porting the mortgage. 

That’s why I ALWAYS ALWAYS ALWAYS recommend a highly knowledgable, honest, and professional Mortgage Broker instead of dealing with the bank directly. 

If you’re wondering about the difference between dealing with a Mortgage Broker vs. dealing with your bank directly, make sure you check out my video post: “Mortgage Brokers vs. Banks: What’s The Difference?” where I outline advantages, disadvantages & some critical differences between a Mortgage Broker vs. dealing with a Bank directly.

And if you want the name of the best Mortgage Broker just let me know and I’d be happy to share their name and contact information with you. 

4- Movers & Moving Fees: Some people try to save money by doing it themselves. But you might need to hire movers if you have a lot of heavy things or if you need to complete the move quickly. 

Local movers will provide you with an estimate based upon the size of your current home and the location of the new home. Based on a starter home to mid-size property it moving fees can cost between $1,500 – $3,000 for professional movers. Obviously more for larger properties.

5- Personal Preferences Costs: 

Some people like to pay for doggie daycare or pet sitting for a few days during their move. 

Some people like to pay the post office to have their mail forwarded for a period of time from their old address to their new address.

Some people hire Professional Cleaners to clean the home or need to buy new cleaning supplies if you intend to clean it yourself.

Utilities, Property Tax, & Maintenance Fees:

Finally there are some other costs that might either be pro-rated to the date  of sale. Or if you haven’t paid your most recent instalments you’ll have to settle your account(s) in full. 

Examples might be if you owe any of your Utility providers money on your account, if you still owe Property Taxes, and/or if you live in a condo managed property you will have to ensure your monthly maintenance fees or condo fees are up-to-date and paid in full. 

If you’re thinking of selling a home and want to talk more about how to do it safely and smoothly I’m always happy to chat.

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