Mary Pinelli

Your Home Sale Expenses

Before putting your home or condo on the market, you need to know what costs to expect on closing. As a listing agent, I always review these items with my clients and I'm surprised to learn how many agents don't!

1) First, find out what your outstanding mortgage balance is on the property. You may view this amount via your online banking account or contact your lender directly.

2) Call your lender to find out what your penalty fee is, if any, to discharge your mortgage upon selling. This amount will vary depending on the remaining term of your mortgage. It usually amounts to the equivalent of 3 months' mortgage interest but it's imperative to double check in order to avoid an unpleasant surprise.

3) Verify whether you or a joint owner has any outstanding home equity lines of credit. Those would be paid out upon the sale.

4) You do not need to commit to a real estate lawyer at this time. However, call two local real estate law offices to inquire about their fee to handle a sale transaction. Remember to ask for their fee INCLUDING disbursements and HST. There is a separate fee for your purchase and for your sale.

5) Real estate fees charged are usually 5% of the total sale price, however this is negotiable and varies depending on the services offered by your listing agent. Real estate fees, like lawyer fees, are subject to 13% HST.

You now have the 5 main expenses incurred upon selling a home or condo. Take the expected sale price and subtract from it the above mentioned expenses. This would generally be the amount you are left with in your pocket. Knowing what you'll end up with after the sale will help you determine what you can afford when you move.

If you or someone you know needs to move, I'm happy to help.