By Brenda Spiering and the Sun Life team
Are you ready to sell your house and move? Be sure to budget for all costs. Here’s what you might have to pay if you sell your home.
Are you thinking of selling your house? You are not alone. Due to the pandemic, many rethink their situation and sell their homes. There are various reasons for this:
Want more space. Is your house starting to seem small for your family? The confinement has made many want a bigger home with a more oversized yard.
I need a change of scenery. Are you working from home and thinking about leaving town? With the increase in telecommuting, many families are thinking of moving. Travelling to work may no longer be part of everyday life, so proximity will be less critical.
Want an intergenerational house. Are you looking for a place to welcome your parents or in-laws? This is being done more and more, given the bad press from long-term care facilities.
Pandemic or not, this may be the first time – or the first in a long time – that you’ve sold your home. Either way, you can prepare for the costs associated with the sale. This is even more important if you use the money from the sale to buy another house. Here are some expenses to plan for.
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How much will the fees of the real estate agent or broker be?
You should expect to pay the agent 3% to 7% of the price of your home. The amount depends on where you live and what you have negotiated with your agent. A 4% commission on a house that sells for $500,000 will amount to $20,000.
In a hot market, you may be able to avoid these fees by selling your home yourself. It is still wise to hire an appraiser ($400) to determine its value. You will also need to hire a notary who knows about real estate to draft the documents.
You can also use an agent or broker who offers low or flat fees. Between an agent who provides a full service and selling yourself, you have a compromise. A fixed-rate real estate agent has a set fee independent of the final sale price. Therefore, you are more involved in the sale than if you had an agent who offers full service.
How much will I pay in notary fees?
Ideally, you should budget at least $1,500, or even more if the transaction is complex.
How much does property development cost?
What does your home need to attract potential buyers? Thirty years ago, a little tidying up and a lick of paint would have sufficed. You only have to look at the ads today to see that sellers do much more than that. Of course, we redo the colour, of course, but we also refurbish and sometimes even rent works of art. The costs to show off your property can be several hundred dollars or several thousand. Everything will depend on the extent of the improvements needed. By making them yourself, you could save money, but be prepared to assume various expenses, such as storage, for example. Be aware that some real estate agents offer enhancement services.
The idea of doing all of this amid a pandemic can seem daunting. Primarily if, like many people, you work or study at home. But to showcase your property, there is no need to exaggerate. Sometimes it doesn’t take much to get your house ready to sell. At a minimum, you should:
declutter and tidy up to make the home appear bigger and brighter;
remove your items, such as family photos;
make the house smell good by baking cookies or using an air freshener before visiting.
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How much is the land transfer tax?
If you buy a new home, the transfer tax can be very high. They correspond to a percentage of the purchase price of your home. In addition, they vary from 1 to 2.1% of the total value, depending on the city and province.
How much does the move cost?
The amount of the moving bill depends on the destination and the amount of stuff you are moving. You will probably need to budget at least a few hundred dollars to cover these expenses. Unless you have a truck and friends willing to take care of it for beers and pizza, be aware, however, that hiring insured professional movers will give you the certainty that your belongings are in good hands.
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