Understand the Costs of Selling Your Home.Get Clear Insights!
When selling a property, it’s important to be aware of associated costs such as agent commissions, legal fees, and any applicable taxes. Knowing these expenses in advance helps you plan your budget..
Various Selling Costs Borne by the Seller
Legal Fees
Legal fee is paid to the lawyer who handles all the legal work for you during the selling process. The legal activities include the Agreement of Purchase and Sale, resolving title issues, preparing closing documents, discharging your existing mortgage, and handling the final exchange of funds. It is the duty of a lawyer to ensure the transaction is legal and that no fraud is involved. This fee is mandatory, and it protects the seller’s interests.
Commission
Commission is the fee paid to a real estate agent who provides various services and facilitates closing the deal. A real estate agent reviews the offers, negotiates with the buyers, handles counteroffers, prepares documentation, and executes the deal smoothly. He protects the seller’s interests and maximizes the selling price.
Taxes
There are certain types of taxes that sellers need to in Ontario. Among these taxes, HST is the most common one, which applies to the real estate commission and legal fees. CRA governs additional taxes, paid on newly built, renovated, and investment properties. There are exemptions on capital gains tax for principal residents, but rental or investment properties are an exception to this.