When you decide to sell, the sale price isn't what actually lands in your account. There are several costs deducted along the way, and knowing them ahead of time saves you surprises on closing day. Here's each one, with a real example so you can see the full numbers.
The typical commission in Ontario is around 5% of the sale price, though the exact percentage is always negotiable, since no government body sets it. It's usually split between my commission as your agent and the buyer's agent's commission, around 2.5% each. HST of 13% is added on top of this commission.
Closing your sale requires one of our lawyers, who reviews the contract, prepares the transfer documents, and handles discharging your mortgage from the property registry. Legal fees for selling are usually between $1,500 and $2,000 plus HST, depending on the complexity of your case.
When you sell, your lender charges a fee to formally discharge your mortgage from the property registry, known as a mortgage discharge fee. This fee is usually between $200 and $400, depending on your bank. If your mortgage has a fixed rate and you discharge it before the term ends, a prepayment penalty may also apply, which is worth confirming with your bank before listing your home.
If your property is a condo, the buyer typically requests a status certificate from the condo corporation. This document can cost up to $100, and in many cases the seller covers it as part of the sale.
I want to clarify something that confuses many of my clients here: the land transfer tax is paid by the buyer, not the seller. As a seller, you don't need to budget for this cost.
For an $800,000 home: the commission at 5% plus HST would be approximately $45,200. Legal fees, with HST, would run around $1,900. The mortgage discharge fee would be around $300. In total, you'd be budgeting around $47,400 in selling costs, before any repairs or moving expenses.
No, it's negotiable. 5% is just a common market reference, but the exact percentage is agreed directly with me.
No. That tax is paid solely by the buyer, not the seller.
The outstanding balance is paid directly from the sale proceeds on closing day, along with the mortgage discharge fee. If your mortgage has a fixed rate, check with your bank whether a prepayment penalty applies for discharging it early.
If you want us to calculate together what you'd net in your specific case, send me an email with your question at contact@nataliarendon.ca.