Perhaps you’ve heard the news that if you’ve owned a house in Toronto for even just a few years, you’re likely sitting on a goldmine! Is now the time to cash in and move up to your next home? It is true, your house is likely worth much more than what you paid for it, and while you will make a profit on the sale, you also will have some fees to pay that you might not be aware of or prepared for. Here we break down the cost of selling a house in Toronto.
The one fee we all know about is the real estate commission.
Real estate commission is part of doing business, it’s how we as realtors get paid. An all inclusive real estate commission is 5% as a standard. The breakdown of this is 2.5% to the buyer’s agent and 2.5% to the seller’s agent. These fees should always include the following services:
- A home consult where you are advised on necessary and nice to have improvements to ensure you get the most out of your home sale as possible. A realtor will tour your home with you and discuss what needs to be done, and hopefully also recommend excellent tradespeople to help you achieve the end result
- Full home staging. Each room should be meticulously designed and staged with the target buyer in mind. A professional stager will know what colours and accents to use where and how. Trust us, this has the single biggest impact on how much a home will sell for, We know, we’ve seen it first hand time and time again.
- Professional real estate photography. This is very necessary to complement the online marketing strategy. Professional photos will be used on the MLS data sheet, the property website and all social media campaigns. In addition, these photos will be used for print marketing as well. Handouts at your open house, packages for potential buyer’s agents interested in your home etc.
- A complete online marketing package. Creating a professional property website, with every piece of relevant information about your listing. A complete social media campaign including paid and promoted ads across a variety of social media platforms during the listing period.
- A pre-list home inspection. Having a home inspection before you list, then having the results of that inspection available on the property website ensures that any potential buyer’s will have all the necessary info about your home when they make an offer. This often can lessen or even eliminate conditions on closing, as there will be no surprises after the offer has been made. A potential buyer knows exactly what they are getting. The pre-list home inspection saves everyone a lot of time and a lot of stress. Who wouldn’t wan that?
With all of the above covered in the commission rate, there should be no additional home selling costs to the seller. These points bear consideration when interviewing a potential realtor. If you hire a discount realtor, you will likely be paying for these extras out of pocket. It is even possible you will not even be advised on the above and will miss out on valuable information that will lead to a higher sale price and less stress for you.
★ For more on the process of selling your home read:
- Selling Your Home In The Age Of Online Marketing
- Top 5 Staging Tips To Help Sell A Home For More Money
Pre-sale home improvements
Before you list, it is advised to spruce up your home so it can be shown at it’s best. Sometimes this is just a coat of paint, and quick repair here or there, but other times it could be a much larger project, if the seller is interested in doing more updates to maximize the sale. An experienced realtor will be able to give you a detailed list of what’s worth doing and what’s not and based on the cost and time of these, you can decide what you are willing to tackle. Ideally you’d like to get the most out of your sale, so it is advisable to take on as much as you can handle before you list your home for sale these projects before you list. A well-connected realtor should also be able to offer you a list of trusted trades to help you get your house ready in a timeley, and cost-efficient way.
It often doesn’t occur to sellers that during the staging and selling period, they will be required to relocate. The home is staged to perfection, so it is imperative that no one is living there during the listing period. This is also a requirement at the moment with the current pandemic related restrictions. It is safer for everyone to have the home empty. Our recomendation is to stay with family or an air bnb in town. A seller should plan on being out of the house for an average of 14 days, depending on the listing and offer strategy.
★ For more on listing and offer strategies read: How To Successfully Price And Sell Your Home
Penalty on current mortgage
If your existing mortgage is not portable, then you are breaking your mortgage contract, and will have to pay a penalty on the amount owing. Check with your bank to ensure you understand the terms of your mortgage and what fees you might be incurring.
When you sell your home you will most definitely need to enlist the services of a real estate lawyer. A lawyer will facilitate your entire closing and over see every detail of the sale to ensure it is all meeting the legal requirements in Ontario. A real estate lawyer will usually cost anywhere between $1200 to $1500 for services rendered on a standard residential closing.
★ For more seller’s resources read:
Capital gains tax – for investment properties
This one won’t apply to everyone, but it is still worth considering. Many Toronto home owners do have income properties and if the home is not your primary residence, you will pay a 50% capital gains tax on the difference between the original purchase price and what the home sold for. This is a significant factor with the considerable jump in Toronto real estate prices over the last 10 years. We are seeing homes purchased in 2004 for $300,000 selling for over $1.3million today.
Yes, actual moving costs. Let’s be real, we’re all past the point of buying our friends some pizza and beer to help you move. Hiring professional movers is not only necessary, it’s also smart. A professional moving company will wrap your furniture to prevent scuffs and scratches, as well be incredibly efficient with loading and unloading your possessions. Moving day is probably the worst part of buying or selling a new home, hiring professional movers can at least shorten the time frame, and hopefully lessen the pain. A full day of movers can cost anywhere between $800-$1200 depending on the amount of furniture you have, stairs into and out of each home etc. These are costs you need to factor in when calculating your profit from the sale of your home.
There are quite a few costs associated with selling a house in Ontario but now you know and can be more prepared in the end. Of course there are always unforeseen costs in any major transaction, however we hope this blog post at least tipped you off to a few you can plan for along the way!