Thinking about selling your house? Maybe you are rethinking your living situation for one or more of these reasons:
- More space – or less. With work from home becoming a mainstay for many Canadians, you might really want a home office. Or maybe your older kids have left your family home and you just don’t need the space anymore.
- New location. Are you thinking of leaving the city? Since commuting may no longer be a daily reality, living closer to work may be less of a factor than it once was. And you may want to cash in on your city home’s value appreciation and find a smaller market with more affordable housing.
- Multi-generational needs. Are you looking for a home to make space for your elderly parents or in-laws? This too is becoming more common due to long-term care facilities being in the news.
Whatever the reason, you may be selling your house for the first time, or the first time in a long time. Whatever the case, you can prepare for the costs involved in selling your house. This is especially important if you’re using the money from the sale to buy another house.
Here are questions you’ll find answers to by reading on:
How much can you expect to pay in realtor fees?
As a seller, expect to pay realtor fees anywhere between 3% and 7% of the price of your house. These fees depend on where you live and what you negotiate with your realtor. A 4% real estate commission on a house that sells for $500,000 will set you back $20,000.
In a hot market, you may be able to avoid this fee by selling your own house. But it’s still wise to hire an appraiser (starting at around $400) to put a value on your house. You’ll also need a real estate lawyer to draw up the paperwork.
You may also consider a low-cost or flat-fee realtor. This is an option mid-way between a full-service realtor and selling on your own. A flat-rate realtor charges a fixed, predetermined fee regardless of the final sale price. But means you have to do more work on your own, than you would with a realtor.
Want to make sure your decisions are aligned to your overall financial goals? An advisor can help you make sense of it all.
How much will you pay in legal fees when selling your house?
When it comes to legal fees, it’s a good idea to budget for at least $1,500. It could be more if your deal is complex.
How much does home staging cost?
What will it take to make your house appeal to potential buyers? If you were selling 30 years ago, tidying up and painting would probably have been enough. Today, if you look at real estate listings, you’ll see that sellers do a lot more. Painting, yes, but also moving out most of your furniture and even renting art. The cost for staging your house can range from several hundred to several thousand dollars. The cost will depend on how much fixing up your place needs. You may be able to save by doing the staging yourself. But prepare to potentially pay for things like storage space. Some real estate agents provide staging as part of their services.
Home staging doesn’t have to be extreme. Especially if you are still working from home and need to access your home office during the staging process.
Sometimes all it takes is a few touches to make your house ready for the market. At the very least, it’s best if you:
- declutter and clean to make your spaces feel bigger and brighter,
- remove personal belongings like family photos, and
- make sure it smells nice, by baking some cookies before showings or using room fresheners.
How much is land transfer tax?
If you’re buying a new house, land or property transfer tax can be a significant expense. The tax is a percentage of the purchase price of your house. Land transfer tax varies by city and province, ranging from .1% to 2.1% of the total property value.
How much does it cost to move?
Your moving bill will depend on where you’re headed and how much stuff you have to move. But you’ll likely need to factor in at least a few hundred dollars for moving expenses. That is, of course, unless you have your own truck and friends who will work for pizza and beer. However, hiring a professional, insured mover can help give you peace of mind that your stuff is in good hands.
Do you need mortgage insurance?
Are you taking on a bigger mortgage? Make sure your mortgage protection insurance (life insurance and critical illness insurance) will cover your additional needs.
Want to apply for your life or critical illness insurance online? You can, with Sun Life Go.
And be sure to update your homeowner's insurance policy. If your new home is bigger than your old one, expect your home insurance premiums to increase.
Need help saving for a new house? Need help with insurance?
Do you need help saving to buy a new house? Or maybe you need help to understand your mortgage protection options? Whatever the case, a Sun Life Financial advisor can:
- explain your options,
- answer your questions, and
- help you build a plan that meets your needs and goals.
Need an advisor?
This article is meant to only provide general information. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.