Expenses & Costs
Home selling costs you
might be overlooking
As you prepare to put your house on the market,
it is tempting to imagine how you’ll spend
the proceeds. Of course you’ll put the bulk
toward your new house, and you’ll have to
cover the real estate agent fee. But what if you
turn a little more profit than you anticipated?
That might have you thinking of a backyard hot
tub, new wardrobe or tropical vacation.
But hang on a second. Before you start packing
for Honolulu, be sure you’ve budgeted for
all the expenses related to the sale of your house.
Like with anything else, the devil is in the details
and there are a number of incidentals that can
really add up on your way to closing day. Set
the swimming goggles aside (temporarily, anyway)
and find out about the other home selling costs
you might not have thought of.
Here is a list of some typical costs associated
with selling a home. Depending on your unique
circumstances and location, other costs may apply
and the amounts will vary.
The cost of a new house
Obviously you aren’t going to forget about
this one, but it’s here for the sake of
thoroughness. Unless you plan on renting or have
other arrangements, you’ll need a new house
once you’ve closed the deal on your current
home. This will be your biggest expense by far,
but hopefully the proceeds from selling your old
house will cover the cost of the new house. If
you still owe on your current mortgage, you may
be able to transfer it to your new home, pay it
off early, or have the buyer take it over.
Legal fees and disbursements
When you’re involved in a financial transaction
as big as this, you will want to be sure you are
protected. Your real estate lawyer (or notary
in Quebec) will ensure that the buyer has made
good on all terms outlined in the offer to purchase,
and that you have met your legal obligations so
that the deal may close. Legal fees vary widely,
and the total cost depends on the extent of services
provided. You will also be responsible for disbursements
(any costs related to handling your file, such
as long distance calls and travel).
Utility and property tax
This might not be a cost for you, depending on
how your property tax and utility bill payments
are scheduled. If you prepay these expenses, then
you can expect the buyer to refund you the difference
by closing day. If, however, you don’t pay
these expenses in advance, it will be you paying
the buyer for the amount accrued prior to possession
date. The exact amount will be calculated by your
real estate lawyer.
Although this is entirely optional, many sellers
choose to commission a professional house inspection
before the buyer’s inspection (and sometimes
even before the house is put up for sale). This
protects you from any unpleasant surprises uncovered
by the buyer’s inspector that might jeopardize
the sale. A little advance notice gives you time
to repair these issues.
Repairs and renovations
When it comes time to show your home to prospective
buyers you want your house looking its best. Some
renovations can actually return your investment
in the value they add to your selling price. Other
fix-ups are expenses that you’ll just have
to absorb in order to make your house attractive
to buyers. Too many serious issues left unfixed
may make a home unsellable.
Following the sale of your house, you’ll
have to clear out your stuff and send it to your
new home. So budget for the moving company, utility
hookups and all the incidentals involved in buying
and moving to a new home.
Once you’ve tallied up your total costs
you’ll have a better idea of whether you
can afford to jet off to the sunny South - or
settle for a piña colada on the patio.
Royal LePage sales representatives are your residential
real estate experts. For helpful advice about
selling your home, contact
Korinne Peachey from your local Royal LePage
real estate office.