# Cost of Selling a House



## Phalene (Apr 3, 2009)

I'll be moving in 2013 and will be selling my condo. I've never sold a house before and am getting very confused trying to figure out what costs are involved. Can anyone help? 

These are the costs I've come up with:

1) Minor repairs, paint, etc (prepping the house for sale)
2) Realtor fees - these seem to typically be between 6-7% of the selling price
3) Penalties associated with breaking the mortgage - either IRD or 3 months of interest

What am I missing? Do sellers need to worry about legal fees or closing costs?


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## Dana (Nov 17, 2009)

Legal fees? 
Moving fees? Could be the costs associated with hiring movers or the cost of pizza and beer for friends who help you move.

If you are purchasing another home, there will be more legal fees, land tranfer taxes (depending where you live) and incidental costs to make the new home livable (window coverings, paint, etc)


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## Rico (Jan 27, 2011)

1) remember to "stage" the property for photos/showings and as much as you can, remove personal items/clutter. Nobody wants to see your stuff in pictures . . . they want to see the empty shelves/counters/areas and imagine their stuff in those places. 

2) Where I lived, realty fees were 6% on the first 100,000 and 3% on the remaining sale price. I'm not sure how this changes depending on province/region/etc.

3) You have a closed mortgage? Then yes, penalties can apply. However, if are you buying another place you could port the mortgage over to the new place and avoid the penalties.

4) Closing costs - legal fees, yes; and there will likely be prorated property tax adjustments to cover as well. These costs are usually taken care of in the Statement of Adjustments for the sale (prepared by the lawyer, they pay everybody, keep their cut, and give you a cheque . . . unless you're porting the mortgage over to another bank, then the bank gets the money).


On a side note: are you moving more than 40km away for work or school? If so, you can claim moving expenses and the above fees on your taxes (against income at the new job/school).


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## Plugging Along (Jan 3, 2011)

Rico said:


> On a side note: are you moving more than 40km away for work or school? If so, you can claim moving expenses and the above fees on your taxes (against income at the new job/school).


Just one minor point, you cannot claim for moving for school. It's when you are moving for a job closer by at least 40k.


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## Rico (Jan 27, 2011)

Plugging Along said:


> Just one minor point, you cannot claim for moving for school. It's when you are moving for a job closer by at least 40k.


It has to be post-secondary and you have to have income (e.g., scholarships) to claim against (see from guide below) but you can claim it if it's over 40km - unless I'm missing something here? Good point about 40 km CLOSER for a job. 

*Full-time students*
You can only deduct moving expenses if you move to study
courses as a full-time student at a college, university, or other
institution offering post-secondary education. However, you can
only deduct these expenses from the part of your scholarships,
fellowships, bursaries, certain prizes, and research grants
required to be included in your income.
If your eligible moving expenses are more than the scholarships,
fellowships, bursaries, certain prizes, and research grants income
you report for the year, you can deduct the unused part of those
expenses from the same type of income you receive and report on
your return for the following years.
You can claim moving expenses you incur at the beginning of
each academic period when you move to the educational
institution, as long as you meet the 40-kilometre limitation
outlined on Form T1-M and have income earned at the new
location. You can also claim moving expenses when you move
back after a summer break, or a work semester if you have income
earned at the new location.


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## Four Pillars (Apr 5, 2009)

Realtor fees are probably less than 6-7%.

One thing to remember is that GST is charged on the realtor fee. Not sure about the new HST thing.


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## GeniusBoy27 (Jun 11, 2010)

Four Pillars said:


> Realtor fees are probably less than 6-7%.
> 
> One thing to remember is that GST is charged on the realtor fee. Not sure about the new HST thing.


It's HST if it applies to your province.

You do have to pay the legal fees associated with selling a place. And the realtor fees are typically 5-6%, if you go through a realtor.


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## GoldStone (Mar 6, 2011)

Phalene said:


> 2) Realtor fees - these seem to typically be between 6-7% of the selling price


NOOOOOOO!!!!! 6-7% is WAY too high.

Phalene, I see that you are in Ottawa. The standard fee here is 5%. Typically the commission is split 2.5% / 2.5% between sellers agent and buyers agent.

The fee is negotiable. It's not too hard to bring it down to 4.5%. One of the two agents has to settle for 2%. It's in the seller's best interest to keep buyer agent's commission at 2.5% (so their incentive to bring you the buyer is not reduced).

A number of discount brokerages have sprang up recently. They charge 3% or less. Some brokers will put your house on MLS for a flat fee. It's up to you to decide how much you are willing to pay the buyer's agent.


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## mcu (Dec 6, 2009)

negotiate the realtor fees! We just sold our place and paid 4%. You will get some guys that offer you 3%, but be careful. Agents split their commission with the buyer's agent. If you offer less than 2-2.50% (4-5% split between both agents) to the buyer agent, he will just refer his client's to the next house. I have bought and sold many homes and believe me this really does happen.

You can also try listing it online for free or a one time fee, but I have had no luck with those and attracted people that wasted my time.


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## GoldStone (Mar 6, 2011)

mcu said:


> If you offer less than 2-2.50% (4-5% split between both agents) to the buyer agent, he will just refer his client's to the next house.


Yes, it's important to offer the buyer agent the standard 2.5%. If you offer less, they will find a way to steer their clients away from your property.

To save on fees, pay less to the listing agent (aka seller's agent). As I mentioned in my previous post, some brokers will list your property on MLS for a flat fee. You will be expected to do the legwork yourself (schedule appointments, etc).


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## Guest (Mar 31, 2011)

mcu said:


> negotiate the realtor fees! We just sold our place and paid 4%. You will get some guys that offer you 3%, but be careful. Agents split their commission with the buyer's agent. If you offer less than 2-2.50% (4-5% split between both agents) to the buyer agent, he will just refer his client's to the next house. I have bought and sold many homes and believe me this really does happen.
> 
> You can also try listing it online for free or a one time fee, but I have had no luck with those and attracted people that wasted my time.


Yes, you are absolutely right, choosing the right realtor while selling a house is definitely important. The commission should be discussed prior the sale and it should be nominal. Nowadays there are lots of real estate brokers who are genuine, skilled and experienced, going online will help you find the best realtor.


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## dogcom (May 23, 2009)

I just sold and bought in BC and for me it is 5.5% for the first $100,000 and 2.5% for everything after that. Then you have to pay HST on that fee. After that if you buy a house you have to pay the rip-off BC transfer tax which is 1% on the first $200,000 and then 2% on everything after that.


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## MikeT (Feb 16, 2010)

So the guy across the street from me had his house on the market less than 3 weeks and paid $28,000 to the realtor. Ya that's fair.


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## Berubeland (Sep 6, 2009)

it's just such bad value for consumers...


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## kcowan (Jul 1, 2010)

A house is priced as a lifestyle expense. It assumes that number of purchases will be small. That is why the frictional costs are so high.

And land transfer tax is a pure tax on value (no service).


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## GoldStone (Mar 6, 2011)

kcowan said:


> A house is priced as a lifestyle expense. It assumes that number of purchases will be small. That is why the frictional costs are so high.


The frictional costs are so high because the industry uses an outdated pricing model. 5% commissions made sense at the times when nominal houses prices were below 50K. They don't make any sense now, when houses cost 500K and up.


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## m3s (Apr 3, 2010)

MikeT said:


> So the guy across the street from me had his house on the market less than 3 weeks and paid $28,000 to the realtor. Ya that's fair.


Dude could have sold privately and offered a $14,000 discount to the buyer. Would have sold even faster!

Assuming he can meet with potential buyer's agents, fill out that simple declarations form, and find a lawyer on his own


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