I’m selling a home in Toronto. What are the costs?

Selling

I’m selling a home in Toronto. What are the costs?

Listing. Check.
Staging. Check.
Marketing. Check.
Virtual open house scheduled. Check.

Your Toronto home is officially up for sale. In other words, you and the realtor you’ve selected are in the process of selling what is likely to be your largest asset. It’s an exciting time – and it can also be a little overwhelming. The more prepared you are, the better! That’s why I’ve put together this handy list of closing costs so you know exactly what to expect, and when to expect it.

Preparing your property

You’ll likely want to bring your home up to tip-top status. This might include painting, gardening, minor repairs and professional cleaning.

Depending on how good your decorating skills are, you may need minimal décor-focused staging or top-to-bottom complete staging services. This can cost up to a few thousand dollars, but sometimes REALTORS® cover this on their end so be sure to ask. Don’t even think about letting this one slide though, because these days, buyers expect to see a nicely staged home and it might mean the difference between a stale listing that isn’t getting any bites and a hot listing with multiple offers. What can I say? People like the sleek visual representation.

Getting your condo status certificate or pre-listing home inspection

In a condo? Prepare your condo status certificate – this is the group of documents that outline the legal and financial health of your building’s condo corporation. As a condo owner in Toronto, the cost to acquire this is usually about $100.

In a house? It has become more and more common to obtain a home inspection prior to listing your property on the market. A typical Toronto home inspection is usually $400-$600. Not only does this enable you to do recommended repairs proactively, but it also shows buyers you have nothing to hide. Once you present the report to an interested party, they may even decide not to do their own home inspection – and that means a faster sales process for you.

Compensating your REALTOR®

Tallying anywhere from 1-6% of your sale price, this cost is likely to be your largest. REALTORS® are varied far and wide on their number, so make sure you do your due diligence and determine exactly what each is offering you and for what percentage.

Paying your mortgage penalty and bank fees

Check into this one! Depending on your mortgage and the timing of your sale, you might need to pay a penalty to break out of the loan early. Find out ahead of time what the terms are for your mortgage and be prepared to pay the penalty if it’s required.

Banks also charge what is called a “discharge fee” to end the mortgage, which is minimal (usually $200-270).

Engaging a real estate lawyer

You cannot sell your home in Toronto without a real estate lawyer. The cost to close on your home depends on the legal firm you decide to use as well as the price of your property. On average, legal closing costs are somewhere in the vicinity of about $1,500.

Owing capital gains tax

If you’re selling your principal residence, you can ignore this one. Score! On the other hand, if you’re selling an investment property, you’ll be subject to capital gains tax which is 50% in Toronto. This means you are required to include 50% of your capital gains as income on your tax return.

Tidying up the odds and ends

Just like any other large transaction, there are often a few odds and ends that must be addressed. These extra closing costs might include outstanding property taxes, utilities or condo fees. And let’s not forget about your furry friends. Have a pet? Make the smart decision to house your pet somewhere else while your home is on the market. You don’t want to turn off your buyers with your dog’s chewing bones lying around the living room or smelly litter boxes in the basement.

When you’re prepared financially, you’re that much further ahead. And that means a sales process without any unwanted surprises.

Have questions about closing costs in Toronto?