How Much Does It Cost to Sell Your House in South Etobicoke?

For Home Sellers

When you’re selling your home, it’s easy to get caught up thinking about how much money you stand to make and how you plan on reinvesting it. However, you might also be curious about the selling process, and in particular, about just how much it’s going to cost you to sell your home before you ever see any ROI.

Assuming you’re going the traditional route, you’re probably already expecting costs like real estate agents’ commissions, lawyers’ fees, and moving day rates — however, there are also many other secondary costs involved in selling a home too.

So, how much does it really cost to sell a home these days? And, when, where, and to whom do you have to pay all of these supplementary fees?

To learn more about all of the costs associated with selling a home that you might not have already considered, here’s our breakdown of what you can expect to pay before cashing in on your sale.

1. Paying Capital Gains

If you’re selling a property that isn’t your primary residence — like an investment property, for instance — then you’ll have to pay what’s known as Capital Gains to the government once your property officially sells. But what is a Capital Gain, exactly? Here’s how the Canada Revenue Agency defines it:

“When you sell, or are considered to have sold, a capital property for more than the total of its ACB (Adjusted Cost Base) and the outlays and expenses incurred to sell the property, you have a Capital Gain.”

What this means, in essence, is that if your property went up in value over the time you owned it and then subsequently you sold it for more than what you paid for it (the Adjusted Cost Base), then the government will want its cut of profit you’re making.

The government takes their cut of your profits in the form of Capital Gains, which will be deducted when you receive your financial return from selling your home.

If you plan on selling your home in Alderwood or South Etobicoke, it’s always worth it to know what other homes have been selling for recently. If you’re curious to know what you should be getting for your South Etobicoke home, get answers to the question, “How Much Are Homes Selling For in Alderwood?” here.

2. Paying Mortgage Penalties

Remember way back when you first bought your current home and signed up for your mortgage, you and your mortgage provider structured a deal in which they’ll loan you a lump sum immediately in exchange for it back plus an interest rate?

That’s how mortgage lenders make their money, and while they count on their homebuying clients eventually paying out those mortgages in full, the only profits to be made for them are in those slow-returning interest rates.

However, when it comes time to sell your home, if you want to break your mortgage agreement early on so that you can cash in on your home’s current value, you’ll be taking away your lender’s profits from accumulating those long-term interest payments. So guess what? You’re going to have to compensate your lender for them.

This compensation comes in the form of a mortgage penalty fee — basically, a fee for breaking your mortgage contract to sell your home, which is to be paid to your original lender. How much will that fee run you? Well, that depends on a number of factors.

First, your lender will examine the date you first signed your original mortgage agreement, then determine your existing mortgage balance and mortgage rate. From there, they’ll reach their total in penalty fees through one of a few ways.

Generally speaking, if you’ve got a floating rate mortgage, you can expect to pay three months’ worth of your interest back to your lender. However, if you’ve got a very barebones mortgage with significantly low interest rates, you may be deducted a larger penalty, which can be up to three percent of the principal mortgage amount or six months’ worth of interest.

If you plan on breaking your mortgage agreement to sell your home, you can use Ratehub’s calculator here to figure out the exact amount you’ll have to pay.

3. Paying The Legal Fees

When your property sells, you’ll also need to account for the fees you need to pay your real estate lawyer to handle the closing for you. These lawyer’s fees include the cost of conducting a title search, which basically ensures that you as the seller have the legal right to sell your property and that there are no liens on the property.

In addition, your real estate lawyer is also responsible for distributing mortgage penalty funds to your original mortgage lender as well as paying out commission costs to both your real estate agent and the real estate representative of your home buyers.

While each lawyer will charge different rates for these services seeing as there really isn’t an industry-wide universally set fee. That being said, however, you can expect to have to pay your lawyer anywhere within the $1,200 to $1,500 range.

4. Paying The Real Estate Agent’s Fees

When you sell your home, you’ll also be responsible for paying the real estate commission fees to the agents involved in your transaction — both your real estate agent and your home buyers’ agent.

Typically, the overall cost of both commissions is about 5% of the final sales price of your home — plus HST, of course. Of that 5%, it’s typically divided equally among both agents, with 2.5% going to your listing agent and the other 2.5% going to the buyer’s agent.

It’s easy to think, wow, 2.5% is a lot of money going to my listing agent, but listing agents typically incur a lot of personal expenses in order to help you sell your home for as much money as possible. Things like marketing costs, professional photography and videography, social and traditional media advertising, and many other supplementary costs.

The fact is, there are a lot of costs that the listing agent will need to carry themselves just to get your home looking it’s very best before listing. And it’s definitely in your best interest for them to take on these expenses, as they’re essentially all proven to earn you, the seller, the best sales price possible for your home — the catch is, your real estate agent will want to be compensated for them.

But is it possible to negotiate that commission fee? Sometimes it is, and that always depends on the individual agent, but any negotiation over commission fees will likely only surround the listing agent’s fees. Lowering the commission on the buyer’s agent side is not a good idea as it may give buying agents less of an incentive to show your home to their clients, which in turn will reduce how much your home could potentially sell for.

If you’re concerned about the commission fees you’re being asked to pay to your listing agent, it’s best to ask what they plan on doing to your home as far as their marketing and enhancement efforts go. This way, you’ll know exactly how they plan on earning their commission by ensuring your home looks it’s best and gets maximum exposure in the buyer market.

While you certainly could use the services of a discount listing agent with a lower commission rate, it’s important to keep in mind that there’s a huge chance you’ll actually end up losing out on a large portion of your own profits anyway. Because these discount agents demand lower commission fees, they also tend to invest much less time, money, and effort in preparing and marketing your home, which results in a lower final sales price.

And you can’t blame them — by paying them lower commission rates, you’re essentially giving them less reason to spend their own money on preparing and marketing your home for sale. If you chose to work with a full-service agent that didn’t cut their commission and spent more time, money, and energy marketing your home well from the outset, it could actually save you money following your sale despite not initially getting a discount on agent commissions.

Eager to learn about what you can do on your own to help get your home in top shape before listing it for sale? Read through my tips on Preparing Your South Etobicoke Bungalow For Sale This Fall here to find out!

5. Getting Your Home Ready

Chances are, you’ll also need to have some money set aside in order to get your home ready for sale. This typically means paying to fix everything that you might’ve just come to live with as part of your day-to-day life. Things like a broken garage door, a fireplace that won’t start the first time you flip the switch, or those small holes in your walls that you never got around to patching.

You may have just lived with these things as you don’t think they’re a big deal, but potential buyers (and their agents) certainly won’t see them that way. Instead, they’ll be paying close attention to any damages or deficiencies in your home so that they can use them as reasons to negotiate your asking price down. That’s why if you want to receive the most amount of money for your home, it’s best to have these things repaired before you list your home on the market.

If you really want to earn some big-time ROI when selling your home, you can take your preparations one step further and invest in some more major improvements. Here are a few improvement projects that promise big returns:

6. Setting Aside Money For Miscellaneous Costs

Don’t forget, you’ll likely also have to set aside some money for the miscellaneous extra costs of selling your home too, like:

Moving Costs – Unless you plan on moving everything yourself, you’ll likely want to hire movers to help you safely transport all of your belongings from your old home into your new one. The fees for movers vary on the distance, the amount of items to be moved, and the amount of time they’re working. That’s why it’s most lucrative to do as much moving on your own as you can and make your movers’ jobs as easy and quick as possible.

Staging Costs – It’s possible that your real estate agent will suggest staging your home. If you do decide to stage and choose to hire a professional staging company, then you’ll obviously need to pay for it. Again, the fees here vary a lot based on the size of your home, how many rooms need to be staged, and how much furniture is needed to stage it properly.

7. Paying Land Transfer Tax

If you’re selling your home, you don’t need to worry about paying land transfer tax as part of the sale, but if you decide to buy another home afterward, then you’ll also have to pay the Land Transfer Tax as part of your purchase.

Hoping to sell your Etobicoke home? As an experienced and locally knowledgeable agent, I can help! To get started, call or text me at 647-239-7587 or you can click here to send me an email.


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