Transparency is hard to come buy when looking at the closing costs involved in buying or selling a residential property. I just went through the process of both, selling a condo and buying a townhouse. Through this, I got to discover some of the hidden fees involved in the process. Below I’ll go through all of the costs I incurred and discover the real cost of selling a house (or condo or townhouse).
Selling my property
For my process of buying a new home, I sold my condo before buying my new property. I wanted to be able to put 20% down on my new townhouse to avoid additional CMHC fees. I’ll cover these fees more in Part II: Closing Costs for Buying a Home in BC. I used the profits of my condo for the down payment on my new townhouse. A few things to note:
- Sometimes people’s situations vary, and you could see different fees than I experienced. You also may not have some of the fees that I was charged.
- The closing costs below are for my specific property, and based off its selling price. Selling for more or less can change the fees.
- On each of the fees talked about below, there are avenues to shop around and lower them as much as possible.
Let’s break down the fees and costs involved in this process of selling my home.
When selling a property, you typically incur the full cost of realtor fees for both sides of the deal. This is great as a buyer and hurts a little bit as the seller. I went with a realtor with a typical fee structure for my area.
Don’t forget about the sales tax that you’ll be charged on top of the percentage that the realtor charges you.
This fee was split between my selling realtor team and the buyer’s realtor team. It is possible to shop around to try to find a lower realtor fee. You can also look at selling your property privately. For the amount of work and assistance my realtor team provided me, I think it was well worth it. My team did the following:
- took great photos
- provided a staging consultant (free of charge)
- created a fantastic and interactive listing
- provided market comparisons and helped me get the best price for my condo.
When I started the process of selling my condo, I put a $40,000 value range in what I expected to get for my place, based on my own research. With the help of my realtor team, I sold my place for the very top of my range.
Another big hit when selling a property is the lawyer or notary fees associated with the sale and transfer of the property. These fees will always be different, and for me were broken up into fees and disbursements. I won’t cover everything these fees pay for as I’m certainly no lawyer myself, but it covered things such as title searches, document retrieval, and the lawyer’s time to create the contracts etc. For me the fees looked like this:
Again, this is a service that you can shop around a bit and possibly find cheaper fees. Going with a notary instead of a lawyer may lower these fees. I was happy with the service my lawyer provided. If a sale didn’t go as successfully as you hope and issues arise, you want to have someone with the proper knowledge and skill on your contracts.
Property Tax Catch Up
Since I have paid property tax for the year already on the condo, I was reimbursed by the seller for the portion remaining in the year. This came out to a $270 credit paid by the new buyer.
After consulting with my mortgage broker, we determined it was best to break the current mortgage that I had on the condo (instead of porting it), and moving to a different loan agent for the new townhouse. As part of breaking my current mortgage, a fee had to be paid based on the terms on my mortgage contract. Again, this will look different based on the mortgage each individual has, but for me, it amounted to the following:
Storage and Staging
To get the best price for your property, you need to make it as appealing as possible to potential buyers. For me, this included de-cluttering and sprucing up. De-cluttering involved moving nearly half of my stuff into storage to make the 1 bedroom look as spacious as possible. Don’t underestimate what these can cost, but how much they can benefit in the end.
I didn’t spend a lot to improve my home before selling. A bit of paint here, a few nice pillows there, can really go a long way. I also spent some money on cheap art from HomeSense. It was art I liked enough to put up in my new place after all was said and done, too.
Total Cost to Sell My Home
When you add it all up, there is a pretty major cost associated with selling a property. The majority of the cost comes from the realtor fees, but you can see it adds up in other places as well.
That covers the costs for selling my property, but what about the fees associated with buying my new home? Check back soon for part 2, where I will cover all of the closing costs associated with buying my new townhouse.