Ready to sell your home? Once everything is said and done, you won’t get exactly what the buyer paid for it—you’ll need to factor the closing costs into your profit margins. There are a few additional fees associated with selling a home, from closing costs to real estate commission.
In 2021, the average home sale price in BC rose to $927,877 (that’s up 18.7% from the previous year!). It’s a seller’s market, but you’ll still need to cover a few costs before you can transfer ownership of your property.
We’re going to cover all the costs associated with selling a home. By the end of this article, you’ll have a clearer picture of what your profits will be after a sale.
Closing Costs
Closing costs are what you pay to sell your home. They’re typically deducted from the total cost of your home. When selling your home, the closing costs you must pay include:
Legal Expenses
When you’re transferring ownership of your property, you’ll need to cover the notary or lawyer fees. Having a real estate lawyer is essential when selling a home; you can ensure everything is done by the books. Costs vary depending on the complexity of your property sale.
Here’s the good news: As the seller, you won’t have to pay the property transfer tax; that responsibility falls to the buyer.
Have you already paid your property taxes for the year? The seller will need to reimburse you for the remaining balance of any prepaid taxes.
Commissions
Working with a realtor? You’ll need to pay commission fees; the percentage will vary depending on the selling price of your home.
When you’re selling your home, you’ll need to cover the buyer’s agent and seller’s agent fees. The exact commission fees will vary depending on which realtor you work with.
To get around commission fees, some buyers decide to sell their homes privately. But this approach has drawbacks of its own. If you’ve never sold a home before, having the expertise of a realtor is an invaluable asset; they’ll help you along each step of the process, from determining your asking price to closing a deal.
Mortgage Discharge
If your mortgage isn’t paid off completely, you’ll need to cover the costs of cancelling it. This is assuming you have a closed mortgage; if you have an open mortgage, you may not need to pay a discharge fee.
With a closed mortgage, you usually pay a fee for selling your home during the mortgage period. The exact amount will vary based on your mortgage broker or lender. However, if you’re buying another property, you may be able to use the remaining balance of your mortgage towards it.
Strata Documents
Strata ownership is a bit different than traditional property ownership. If you’re selling a strata property (such as a condo or townhouse), you’ll need to get your strata documentation in order first.
The buyer will need to review this information before they can make a decision. Documents include general information about the strata owners and lot, such as:
- Financial statements regarding the repairs and maintenance of the building
- Minutes from strata council meetings
- The corporation’s rules and bylaws
In most cases, you’ll need to order these documents from your property manager. The cost of this will vary depending on the lot owner, but on average, it ranges from $50-$250.
Marketing
Need help attracting buyers to your property? Before you can close a deal, you’ll need to entice potential buyers through strategic marketing. Depending on which approach you take, your marketing costs will vary.
We recommend getting your home in a clean and presentable state before advertising it. Take photos after it’s been professionally cleaned and staged. You’ll likely need to pay a professional photographer for high-quality photos.
When you work with Leo Wilk, you’ll have access to high-quality marketing services. Reduce the time it takes to sell your home with a professional realtor.
Staging
It’s surprising what a difference staging your home makes. You know that making your home clean and presentable makes it more appealing to buyers. But a professional home stager knows what will make it sell.
Why is staging your home so effective? For one, it creates a strong first impression. Emotions play an essential part in selling a property—if the home doesn’t feel right to the buyer, they won’t be interested. But if they can envision their lives in it, they’ll be more likely to buy it. That’s why staged homes spend 73% less time on the market than un-staged homes.
When you factor in these benefits, it makes the cost of this service well worth it. You can sell your home faster and potentially increase its property value.
You can pay a professional to stage your home for you. Staging involves the following:
- Removing personalized items from the space (family portraits, pet toys, and awards)
- Rearranging furniture and setting up new décor
- Cleaning your home to remove any dust
Before you host an open house, we recommend staging it first. It can significantly increase the home sale value of your property.
Other Costs
We’re going to cover a few expenses that may not be directly related to the sale of your home but can arise around the same time:
- New down payment. If you’re selling your current home, chances are that you’re about to buy a new property. Most sellers set aside a portion of their net proceeds to buy their next house.
- Costs related to a home inspection. Depending on what they discover, the buyer may request that you fix certain issues before they agree to a deal. This could be a new HVAC system, electric panel, or roof repair.
- Painting. A fresh coat of paint does wonders to improve your home. Update the interior with a colour scheme that’s modern, airy, and fresh.
Looking for a Real Estate Agent in Vancouver?
The total closing costs come as a surprise to some sellers. But in the end, it’s always worth it to work with a realtor when selling a property. Even though you’ll need to pay a few fees, you’ll often get a higher selling price for your home. That means you’ll make more money off the sale of your home.
If you’re ready to sell your home, condo, or townhouse in Vancouver, contact Leo Wilk. As one of the top realtors in Vancouver, Leo Wilk specializes in residential and luxury real estate. To discuss the sale of your property, contact us today.