Here is a brief summary explaining some of the costs you may incur when you are selling your property.
1.Real Estate Commissions
Real estate commissions are usually in the range of 4% - 7% GST of the sale price of the property. However, this could change depending on the nature of the agency relationship shared between the purchaser's agent and the purchaser. If the transaction is one of property rental, the commission is generally one month's rent, plus GST.
2. Survey Costs
In some cases the offer to purchase will state that the seller must provide a survey within so many days following the date of the offer. If you have a current survey in your possession, and nothing has changed since it was conducted, this will usually suffice. However, if you are obligated to provide a new survey, the cost will generally be approximately $700 - $1,000 in town, and possibly more in the country. Country surveys vary in price due to size of the area and the terrain. If the survey is old or poor, it would be a good idea to get a quote from a surveyor before an offer appears.
3. Legal Fees
There are 2 fees; one for the lawyer (plus GST) and their service and one for the disbursements. Ask for quotes for both. The fee may be higher if there is a mortgage being discharged on the sale. If you do not have a lawyer, we suggest interviewing three (3) and pick the one you feel comfortable with and whom you will feel will do excellent work on your behalf.
4. Mortgage Discharge
If your mortgage is being discharged prior to its maturity, there could be a penalty for early discharge, often 3 months interest or an interest differential penalty, whichever is greater. Also, a lot of mortgage companies require a discharge fee of between $100 and $200 to cover their administrative costs. Call your bank and ask for a mortgage discharge statement in advance of selling. This will minimize any "surprises".
In the case of an institutional lender, many mortgages provide a "portability" feature, which means in effect that the interest penalty may be waived if the seller transfers the mortgage from the home they are selling to the home they are buying, if in fact that is the case.
A REALTOR® can verify all this data in a "mortgage verification form" sent to your lender.
5. Other Expenses
All your final bills from utilities and suppliers should be fully paid up at the time of closing or shortly thereafter. These could include realty taxes, phone, hydro, oil, gas, cable TV, renovations, alterations, snow removal - all the bills which have to do with the house. Make sure all the companies and organizations involved are informed of the date of closing to ensure all final billings are made, and you are no longer responsible for any utility or tax charges subsequent to the date of closing.
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