Based on the municipality, province, and region in which your home is located, several third-party expenses are involved in selling your home or any real estate property. If you are working with a real estate agent, they can come in as very handy here as they will be able to guide you on everything that would or not be required when closing your home’s sale.
Home Stager
It is well-known that every company, big or small, spends enormous money marketing their product right to make it saleable and lure a large consumer base. Similarly, an excellent visual merchandising of one of your most essential assets, i.e., your home, can attract more buyers as your home will be competing with several others available on the market. Also, staging might help you achieve a better deal with a buyer than a non staged house. Moreover, it allows buyers to imagine themselves living in your home better.
Lawyer
A lawyer plays a crucial part in any real estate transaction, from reviewing the documents to dispute resolution. Seller’s lawyer is required to review all agreement of purchase and sale documents, survey certificates, adheres to everything according to contract dates, handle tax and clear liens and verifications and transfers the property title to new ower and so forth. The seller’s lawyer also works 1-1 with the buyer’s lawyer if any question arises. A lawyer is vital to verify the legality of the whole transaction. Hiring a lawyer is not optional.
Survey
Legally seller is not obliged to pay for a land survey, but based on conditions in an agreement of purchase and sales buyer might require the latest survey to verify the size and extent of the seller’s ownership and be paid by the seller. If the seller has an old survey handy, they can share that and refuse the buyer’s request to provide the new survey at the seller’s expense. So depending upon the situation and need, the seller might have to factor in the cost of the survey.
Mortgage
Before putting the house on sale, the seller should reach out to their lender and share their plans. If the seller is discharging the mortgage before expiry, the seller might be required to pay a discharge penalty. Hence, expert advice is necessary for them to decide or find a way to transition smoothly. Therefore, a mortgage specialist’s advice is required in a couple of other scenarios, such as seller take-back mortgage, transferring the mortgage to other property after selling, and so forth.
Capital Gain Tax
For any home or real estate property that’s being sold, if it sells above the price than what the seller purchased it for initially, then according to tax implications, this difference in money is considered as a capital gain. But if this home being sold is the seller’s primary residence, and they usually live there, then it’s exempt from capital gain tax. This capital gain tax amount is not due at the closing but is paid by the seller on their next income tax return. The best approach is to consult with your accountant to avoid any discrepancies.
Land Tax
Seller is responsible for paying the property tax of property being sold from January 1 of the current year up to the transaction’s closing date. After the closing date, this responsibility falls upon the buyer. If the seller has prepaid the whole year’s property tax, on validation by lawyers seller will be credited for the amount paid from the closing date up to the end of the year.
Commission
Seller is responsible for paying out the remuneration(commission) owed to a brokerage(s) involved in the transaction. This commission amount is split between the seller’s agent and the buyer’s agent. Seller’s brokerage receives the whole commission at first and then shares the owed amount to the buyer’s brokerage. If you list your home as for sale by the owner and don’t hire a real estate agent, you still can be required to pay out to the buyer’s agent hired by the buyer to purchase your home.
Moving Expense
Selling a home can involve hiring a moving company move your belongings from the home you are selling to your new home or to the storage facility, which comes with storage expenses. Additionally, this will require address change on your passport, driver’s license, vehicle permits, etc. Moreover, if the house had rental pieces of equipment like a tank, furnace, heater, etc., the seller must pay off the associated charges or any outstanding balances.
