So you’re planning to put your home on the market, ready to make your next move in the real estate world. You’ve gone through the buying process once, but selling your home is a whole other undertaking. You likely have a few questions, such as: how much does it cost to sell a house or condo in Toronto? Let’s break down the many costs affiliated with selling a property so you can best prepare.
WHAT ARE THE COSTS ASSOCIATED WITH SELLING A HOME?
Home Preparation Costs
The costs affiliated with selling a house or condo will depend on how you want to approach listing your property. If you want to make sure you’re striving for the best possible outcome when your property hits the market there are some things you can do to prepare your home to sell that can go a long way.
Some of the minor costs would be to hire a handyman to make minor home improvements like recaulking the bathroom, fixing screen doors, swapping out hardware, and giving your walls a fresh coat of paint.
Then there are the larger investments you can make that will help improve your home’s appeal on the market and hopefully boost its resale value. These costs include things like upgrading any old our out outdated appliances or, in the warmer months, hiring a landscaper to boost your home’s curb appeal.
Listing Preparation Costs
If you’re selling a house, you may consider paying for a home inspection to try and avoid any conditional offers, especially if your agent wants to do an offer date for your listing. The cost of a home inspection will depend on the size of the property but they range between $300 to $500.
The condo equivalent to a home inspection is getting a status certificate. These cost $100 and provide interested buyers with a look at the overall standing of a condo building. It’s like looking at a person’s health records, credit score, and values all rolled into one. You can learn more about Status Certificates here.
You will also want to have your home cleaned ahead of listing and showings. This will vary depending on the size of your home or condo and is sometimes included in your realtor’s commission.
Realtor Fees and Closing Costs
When selling your home, especially in a market like Toronto, you’ll want to use a professional to make sure your home sells for a competitive price. The average realtor fee in Toronto is 5% of the sale price plus HST. This means if you sell your home for $800,000, you are paying your realtor $45,200.
The best real estate agents will spend much of their commission towards successfully marketing your property in order to sell it for top dollar. Each realtor will have different services included in their commission so it’s important to ask your realtor what they offer. These things can include things like home staging ($2000 – $5,000), listing photography ($500), and marketing your listing ($100 – $1,000), which can really add up.
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Beyond your realtor commission, the only other official closing expenses you will need to budget for are the legal fees, which are typically between $1,500 and $2,000. However, when buying a property you will have a few additional closing expenses, you can learn more about closing expenses here.
WHEN SELLING A HOUSE WHO PAYS FOR WHAT?
Whether you’re selling a house or a condo, it is the seller who pays the commission. While you may be forking over the 5% to sell your home, you won’t have to pay any commission buying your next property.
Earlier we mentioned home inspections and status certificates. Sellers aren’t obligated to pay for these up front, but are sometimes encouraged by their realtor depending on their listing strategy.
DO YOU PAY TAX ON ANY PROFIT FROM HOUSE SALE?
If the home you’re selling is your principal residence, you don’t pay any tax on the profits earned from the sale. However, if you’re selling an investment property you will pay 50% Capital Gains Tax on the net profits.
POTENTIALLY OVERLOOKED COSTS AFFILIATED WITH SELLING A HOME
One expense that shouldn’t be overlooked is the cost of moving. Whether you’re hiring movers or doing it yourself, you’ll need to budget accordingly. The cost for movers will depend on the size of your current place and the distance you’re traveling. If you’re doing it yourself, you’ll need to budget for boxes, packing supplies, and likely a rental van, plus gas and mileage.
One thing to be mindful of if your new property closes before your current home sells, you may need to get a bridge loan. This type of loan exists to help those who need access to the equity in their home for the down payment on their new property. You can learn more about bridge financing here.
SO, HOW MUCH DOES IT COST TO SELL YOUR HOME?
Now that we’ve gone through the many costs that are associated with selling a home or condo, you can see there are many variables to consider. Though we can’t provide a concrete answer to the cost to sell a house it’s important to be mindful of these potential expenses along the way:
- Home repairs and improvements
- Home inspection ($300-$500) or condo status certificate ($100)
- Realtor commission (5% of sale price and may include below items)
- Staging expenses ($2,000-$5,000)
- Listing photography ($500)
- Marketing ($100-$1,000)
- Legal fees ($1,500-$2,000)
- Cleaning ($150-$300)
- Moving Expenses ($300-$3,000)
The best place to start is to get a home valuation on your property to see how much your home is worth in the current market.