Thinking of selling and wondering how it may impact your finances? Wondering what costs you will be responsible for?
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Costs Associated with Selling Your Home
Often times, people associate closing costs with buyers instead of sellers and find themselves face-to-face with some unexpected payments come closing day. The cost most people are familiar with is REALTOR® commission paid out to both the buyer and seller agents. These fees, plus HST, are negotiated in the initial listing contract and are typically paid out of the sale price of the home and dealt with by the lawyer.
If you currently hold a mortgage on the property you are selling, you will be responsible to pay fees to the bank or mortgage company. You can expect a mortgage discharge fee (typically between $250 and $350), a mortgage discharge penalty, usually equal to the greater of 3 months interest rate or the interest rate differential, as well as a fee to register the mortgage discharge on title. These fees are property and lender dependent, so please consult your mortgage agent.
Prior to closing, your lawyer will prepare closing adjustments, which may result in you being owed money from the buyers, or you owing them. Typically these consist of items like property taxes or utilities that are pre-paid at set increments.
In the event that you are selling a secondary property, such a cottage or income property, capital gains tax will need to be paid to the government.
Finally, your hard working lawyer will want to get paid! You can expect the fees to range from $500-$1,500 plus HST, along with any possible disbursements not covered above.