There are many reasons people choose to sell their homes: a job relocation, the purchase of a new property with a partner or growing family needs. Regardless of your reason for selling, it’s essential to be aware of the costs involved.
Despite what you might expect, selling your house does come with expenses. Although it might not be the most enjoyable subject, it’s important to consider these expenses carefully.
1. Presale inspection
Before listing your house on the market, you should consider hiring a building inspector to identify any necessary repairs, improvements, or corrections needed for your property.
Although a presale inspection is not mandatory, it is a valuable tool for identifying issues that need to be addressed to achieve your desired selling price. Hiring a building inspector typically costs between $450 and $750, but this investment can be particularly advantageous if you aim to sell your home quickly.
2. Element testing
Following the initial inspection, the inspector might recommend additional tests to confirm the presence of issues such as pyrite or vermiculite.
To test for pyrite, a standardized procedure is required to assess the type of stone in your soil and determine if it has potential to expand. This test typically costs around $350.
For detecting vermiculite, you will need to hire an expert to collect samples of your insulation. The total cost for this test is approximately $1,500, which included $400 for sample collection, $800 for analysis, and $300 for the written report provided to you.
3. Renovations
Unless your home is newly built, you’ll likely need to invest in some renovations to enhance its appeal. This could involve updating insulation or electrical systems, optimizing space, replacing plumbing, or remodeling rooms.
While some improvements might be minor, others, like roof repairs or fixing a severely damaged kitchen counter, can dissuade potential buyers because of the high repair costs.
The costs of these renovations will vary depending on their nature and extent. You essentially have two options: handle the repairs yourself or lower your asking price. Either way, be prepared for a potential decrease in profit due to the necessary updates and repairs.
4. The certificate of location
As required by law, it is the seller’s responsibility to provide the certificate of location to the buyer. The document must accurately reflect the property's status, and if it does not, a new certificate must be obtained.
If the seller’s certificate is outdated, the seller must cover the cost of obtaining a new one. However, if a new certificate is issued and shows no changes from the previous one, the buyer is responsible for covering the costs. Typically, you can expect to pay around $1,500.
5. Moving expenses
When selling your home, you’ll need to arrange to move your belongings to your new place. While some may choose to rely on the help of friends or family to assist with the move, others might prefer to hire professional moving services.
The cost of hiring movers will vary depending on the volume of items being transported. To give you a rough estimate, a standard move typically costs around $1,200.
6. Early repayment costs
If you’re selling your home before fully repaying your mortgage, you may face an early repayment penalty, as outlined in your mortgage contract.
Calculating this penalty can be complex, but it generally follows to methods:
- Three-month interest estimate: This method estimates the penalty as the interest for three months on the remaining mortgage balance. For instance, if you have $150,000 left on your mortgage at a 5% interest rate, the penalty would be approximately $1,875. This is calculated as follows: $150,000 x 5% ÷ 4 (representing three months).
- Interest rate differential: This method calculates the penalty based on the difference between the original mortgage rate and the current rate. For example, if your initial rate was 4% and the current rate is 2%, the differential is 2%. If the remaining mortgage balance is $150,000, the penalty would be $3,000, calculated as follows: $150,000 x 2%.
Typically, the penalty will be the higher amount from these two calculations.
7. Clearance fees
When selling your property, the notary will need to cancel your mortgage and update the land register. This procedure generally involves clearance fees ranging from $450 to $750.
8. Brokerage fees
Unless you choose to sell your house on your own, you’ll likely work with a real estate broker and pay a commission.
These fees are typically calculated as a commission rate of 4% to 7% of the property's sale price, and the broker only charges this fee if your property is successfully sold.
The commission covers expenses related to advertising your home, contributions to the Organisme d'autoréglementation du courtage immobilier du Québec, as well as expenses for research, office rental, and other associated activities.
9. Advertising costs
If you choose not to work with a real estate broker, you'll need to handle and cover the costs of advertising your property yourself. The fees can vary based on your property’s location.
In areas with low demand, you might need to invest more in advertising to attract buyers. Conversely, if your property is in a high-demand area, advertising costs may be lower.
On average, you can expect to pay between $1,500 and $2,500 for advertising.
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