When most people think of the costs to sell their home they only think of the marketing efforts which are usually covered by the Realtor up front. Often times sellers forget about capital gains, legal fees, and the maintenance and repairs that occur prior to marketing the home. Here is a breakdown of all the costs you should anticipate during the transaction before, during and after the sale of your home:
De-Cluttering, Packing & Storing
Depending on the size or condition of your home, cleaning supplies may go beyond just a few bottles of dish soap and sponges. You may need to clean the carpets, power wash the front steps, and discard of any junk materials that have accumulated over the years such as scrap wood in the garage or old projects. The Majority of buyer’s don’t want to buy a project, and that includes one they have to thoroughly clean. Spend the money now and save thousands later, during offer time.
Once you’ve thoroughly cleaned and purged the home you’ll likely be left with your most cherished possessions. Our advice is to pack up the things you don’t use on a regular basis in preparation for the move to your new home. You are moving aren’t you, that’s why you’re listing your home? Why not start by packing now. One company we recommend for this is U-Pak. They’ll drop off a small storage container in your driveway which you can fill yourself, and they’ll pick it up and store it for you. This service usually costs around $185 or so + the additional per month storage fees after that.
Pre-Listing Home Inspection
I highly recommend that seller’s get a pre-listing home inspection done on their home. There may be some deficiencies you choose to fix before it hits the market, or factor in to the asking price. At the very least a pre-listing home inspection ensures there are no surprises when you receive an offer from a buyer who discovered there was an oil tank buried in the back yard. Be aware that these types of home inspections range from $300-$500+ depending on the size of your home.
Depending on the outcome of the inspection – and if there are any issues with the home – you may either choose to tackle this before listing your home by fixing the issues or factoring them in to your asking price.
Depending on the time of year the sale completes you may owe money for property taxes during the time you lived in the home. This will be dealt with during the closing period of the sale.
Real Estate Brokerage Service Fees
If you hire an agent they will likely be paid through a commission – a percentage of the sale price – which will be agreed to in the listing contract. It’s typical for this money to be split 4 ways, through the Seller’s Agent, the Buyer’s Agent, and both of their respective real estate brokerages.
Legal & Conveyancing Costs
Lawyer’s fees will vary greatly depending on details of the transaction and might cost you anywhere from $500-$1500 or more. Do not think you are saving money by using a notary. — they cannot offer legal advise whatsoever.
Depending on your lender’s policy and your mortgage contract, you might have to pay penalties if you’re planning on paying off the mortgage entirely or porting it over to a new property you are purchasing.
When you sell your home, you may realize a capital gain. If the property was solely your principal residence for every year you owned it, you do not have to pay tax on the gain. If at any time during the period you owned the property, it was not your principal residence, or solely your principal residence, you may have to report all or part of the capital gain. If you sold property in 2017 that was, at any time, your principal residence, you must report the sale on Schedule 3, Capital Gains (or Losses) in 2017 andForm T2091(IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust). See Sale of a principal residence for more information.