One of the things I get asked about most is closing costs. These are the expenses that have to be paid before a real estate transaction is considered final. While the costs to buyers are fairly well known, sellers aren’t always sure about those they’ll have to cover. That’s too bad, because seeing the full financial picture can help you budget for every step. Fortunately, by familiarizing yourself with the expenses you’ll have to pay, you can help ensure that the selling process is smooth!
If you’re preparing to put your property on the market, here are some of the closing costs you can expect…
Commission
Typically, sellers are responsible for paying commission to not only their own agent, but the buyer’s as well. The full amount, which will be split between both professionals, is usually between 4 and 6 per cent of the home’s purchase price. In a sense, the buyer will actually be paying this cost, since it’s usually part of the sale price. That said, you’ll want to factor it in when you’re figuring out how much you’ll be walking away with.
Status certificate
As a unit owner, you already understand what makes a status certificate so crucial. What you may not know is, the seller is usually expected to provide a copy of this document during a condo sale. There’s a good chance that the buyer will even include a condition that makes their purchase contingent on a successful status certificate review. Fortunately, obtaining one through your condo corporation should only set you back $100.
Mortgage prepayment penalty
Depending on the terms of your mortgage, you may be charged a prepayment penalty if you break your contract or pay off your loan early. This amount is typically either a percentage of your overall financing or the equivalent of a specific number of monthly interest payments. If you’ll be wrapping up your mortgage ahead of schedule as part of your home sale, consider speaking to a financial expert beforehand.
Legal fees
You’ll need a lawyer to review your agreement of purchase and sale, mortgage and title documents, and any other paperwork pertaining to your deal. They’ll ensure that you’re able to meet your obligations, and that the buyer tranfers all funds before the deed is released. On top of the services they provide, you may have to pay some out-of-pocket disbursements. Your total legal costs will likely fall within the $500 to $1500 range.
Repairs
During the negotiation process, sellers will often agree to pay for repairs to their property. In many cases, the buyer will get an estimate from a local contractor for the agreed-upon improvement. Once you’ve come to an arrangement, be sure to factor the amount you’ll be paying for that leaky roof or cracked foundation into your overall budget.
Moving costs
It may not technically be a closing cost, since you don’t have to pay it before completing your transaction. That said, you’ll want to make sure you account for moving costs. The amount you’ll pay will depend on factors such as how far you have to move, and whether you hire professionals to help or simply rent a truck. Either way, you can ensure that you find the best rates possible by doing your homework online!
Ready to sell your condo? I have the expertise to guide you through every step of the process—from submitting worksheets to closing the deal. Call or text to learn more: 416-500-5360 / Email: info@rashidnotash.com
