What Does it Cost to Sell Your House?

8 Things That Affect Your Bottom Line:

If you’re a spreadsheet kinda ‘gal like me, you’re going to want to take notes!

We’re talking about all of the costs associated with selling your home or condominium in Toronto. In today’s hot Seller’s market, you know you’re to sell. For how much? Hard to know to the penny until you have a firm offer in hand. But how much did you net after your costs to sell? We’re going to try and help you sort that out in advance. They don’t call it the bottom line for ‘nothin!

Outlined below are Eight Frequently Asked Questions that we discuss with our clients related to the costs involved in selling their home or condominium:

1/ How much will it cost to prep my home for sale?

What you need to do to prep your home for sale is mainly dependent on your home’s condition. Often, it’s not worth renovating your property before you sell it – but there are some “must-dos” that we recommend as an out-of-pocket expense before a “For Sale” should hit the ground.

Fox Marin’s Top Seven Tips to Improve the Value of your Home without a Major Renovation Include:

1. Painting Top to Bottom in a Fresh, Neutral Colour
2. Swapping Out Standard Builder Light Fixtures
3. Upgrading the Kitchen Counters & Backsplash
4. Installing Built-in Closets in the Front Hallway & Master Bedroom
5. Replacing Generic Hardware in Washrooms & Kitchen
6. Light Landscaping Front & Back (homes)
7. Window Washing & Power Washing (homes)

Of course, we would need to see your property’s size, scale, and condition to estimate what these costs would work out in total.

If you would like to work off a dollar amount, we wouldn’t recommend spending more than 1-2% of your property’s value on prep work.

For example, if you owned an $800,000 condo – your prep budget should be $8,000 – $16,000 or less! Where you land in this range is largely dependant on the condition of your property.

We are always happy to make recommendations and introduce you to dependable, hardworking and trustworthy trades! We all know that painting walls with your significant other can end in a divorce. Am I right?

We put together a short video about Improving the Value of your Home on a Budget that may prove helpful:

2/ How do real estate commissions work?

When you hire a real estate agent or broker, there are fees associated with the services rendered.

It is commonplace for a seller to pay a 5% commission on their property’s final sale price in Toronto. Typically, the commission is evenly split between the listing agent and the buyer’s agent – 2.5% to the listing agent and 2.5% to the buyer’s agent. All amounts set out as commission are payable, plus applicable taxes (HST) on said commissions when the transaction closes. Real estate commissions come out of the proceeds of the sale, and they are negotiable.

If you would like to read more about Commissions in more detail, we invite you to read How Do Real Estate Commissions work in Ontario.

3/ Who pays for home staging?

We are obsessed with home staging in this neck of the woods! Why?

• On average, a staged home will sell for 18% higher than a non-staged property.
• 83% of buyers’ said that a staged home made it easier for them to visualize the property as their future home.
• Most buyers form an opinion about a home within the first 7-10 seconds of arriving.
• Does home staging cost you anything? Generally, yes.

At Fox Marin, we include Staging & Styling in our commission fees. We have an in-house designer and carry a considerable inventory chock-full of furniture, art, area rugs, bedding, decor items and more! However, not all agents are equal, and not everyone can offer complimentary design services. If that is the case, a staging company will need to be outsourced, which ain’t always easy on the pocket! Sometimes, your agent will absorb these fees, or the staging costs are shared between the Seller and Agent.

As Toronto expects more and more from their real-estate brokers (as they should), it is expected that your home is staged and styled too. In light of this, home staging and styling companies in high demand can charge a premium. A solid litmus test is $1,000 per room plus a consultation fee if you’re looking to work out some simple math in advance.

4/ Should I get a Pre-Inspection?

A thorough Pre-List inspection of your property by a licensed home inspector is highly recommended. This report can give assurance to buyers contemplating submitting an offer on your property. Pre-inspection reports tend to be priced between five to seven hundred dollar range depending on your home’s size. In addition to providing the potential buyer’s confidence about your home’s condition, it also protects you, the Seller – as you have hired a third-party expert to provide a written opinion about the condition of your property before listing it for sale.

We are always happy to make arrangements on behalf of our Sellers to facilitate a pre-list inspection. However, this is an additional upfront cost you should be aware of as you’re working through your spreadsheet!

To read more about Inspections, take a look at our Home Inspection 101 Blog Post that covers Inspections for Buyers and Sellers in more detail!

5/ Who orders a Status Certificate?

One of the most important aspects of a condo sale is the Status Certificate. Essentially, when purchasing a condo, you are not just buying a property. Instead, you are becoming a part-owner of the condo corporation. As such, buyers want to ensure that the corporation is in good financial health.

A Status Certificate is ordered through the Property Management company and can take up to 10 days to produce. In light of the preparation time, we recommend that Condo Sellers order this in advance of listing their property for sale. The cost for a Status Certificate ranges between $100 – $200 depending on the building.

It’s essential to have this upfront for the following reasons:

• Ensure your Listing Details are accurate and match the content of the status certificate (maintenance fees, legal description, parking spot #)
• Flag any issues with the building in advance of your listing, including the reserve fund, pending lawsuits, Kitec plumbing or pet restrictions
• Many potential purchasers will have the Status Certificate pre-reviewed by a lawyer before they offer on your condo. Consequently, you are likely to attract more clean (condition-free) offers.

In most instances, we at Fox Marin order and pay for the Status Certificate to make sure it’s handled in a timely manner and it’s not forgotten!  One more thing off the prep checklist that we’re happy to take care of.

6/ How much are lawyer fees when Selling a property?

You will need a real estate lawyer to act on your behalf in the sale of a home as well. Legal fees for a home’s sale are significantly less than on a home’s purchase. Legal fees range between $1,000 – $3,000, depending on the value of your property.

7/ How much is the penalty to break my mortgage?

If you have to discharge your mortgage upon completion of your sale, you may incur a discharge penalty from the mortgagee to do this. Talk to your mortgage broker or bank to find out what these costs may be. Even open mortgages can incur a processing fee to be discharged! Please get this information upfront, so there are no surprises as closing!

8/ Will I have to pay capital gains tax?

If you are an investor and not an end-user, you may be exposed to Capital Gains Tax. It would help if you discussed this with your accountant so you know what your tax exposure may be in advance. Remember, this is only applicable to investments – tenanted or vacant properties are good examples.

In Summary:

• Prepping Your Home to Sell (1-2% of Property Value or Less)
• Commissions & Service Fees (5% + HST but negotiable between 0% – 6%)
• Home Staging & Styling (Complimentary to $1,000+ per room > fees and quality vary greatly)
• Pre-List Inspection for Homes ($500 – $700 + HST approximately)
• Status Certificate for Condos ($100 – $200 + approximately)
• Lawyer Fees ($1,500 – $2,500 + estimation)
• Mortgage Penalty (be sure to ask your lender)
• Capital Gains Tax (be sure to ask your accountant)

If there’s one thing we can say from experience, it takes hard work to sell your home. But, hard work pays dividends. Especially when you have the right partner in your corner, you get the results you want. When you sell your home with Fox Marin, we are that someone to help you navigate through the selling process. To put it differently, you can trust that we’ll do the heavy lifting in order to maximize results. No matter the size, shape or value of the property, you’re getting a best-in-class team with you every step of the way.

Of course, if you have additional questions or comment please reach out. Contact Us (We’re Nice)!

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This article was written by Kori Marin, Managing partner here at Fox Marin Associates.  For high-energy real estate aficionado Kori Marin, a well-lived life is achieved by maintaining an “all-in” attitude that realizes every last ounce of one’s full potential. This mindset has driven successful results in every aspect of her life – from her corporate sales and account management experience to her international travels, to her years of fitness training and leadership – and is the hallmark of the exceptional work that she does on behalf of her clients in the residential real estate sector in downtown Toronto.