There are more costs involved than just the purchase price, so like any contract, make sure to read the purchase contract carefully. A lot of fees are disregarded at the outset of the transaction, with the responsible party thinking that they will cross that bridge when they come to it. The fact is, the seller needs to be prepared from the outset and ensure that the budget reflects the reality.
It is all very well to head in a general direction, but we need detailed plans when dealing with decisions as important as the sale of a home. Once your house is sold, what is your next move? Are you going to rent for a few months? A year? Have you already purchased a new home? Do you need bridge financing if the purchase completes before the sale? A lot of sellers who become new buyers think they are playing a simple game: Sell high, buy low, like the stock market. Unfortunately, reality can be quite a bit more complicated.
Now for the fees. When you sell your property, this is your investment, your nest egg and your pot of gold. It is usually worth a lot in value, so using a lawyer as a professional to make sure all the I’s are dotted and all the T’s are crossed is a good idea. Resist the urge to find the cheapest legal professional out there to handle the sale. You must be well represented. Your lawyer will charge fees for time spent on the file, and disbursements will be charged on top of fees. Disbursements include costs such as property searches, long distance phone calls, the cost of discharging a mortgage or other charges from title, etc. Real estate commissions are payable by the seller, and the fee to sell your property will be the standard 7% on the first $100,000 and 2.5% on the balance of the sale price.
Property tax and utility adjustments must also be considered. If you sell before you have paid your property taxes for the year, you will need to reimburse the buyer for the time during the year that you lived in the home, as the buyer will be required to pay this in July. If you sell after you have paid your taxes, the buyer will be required to reimburse you for the amount of time during the year that they live in the home. Your legal representative will calculate this for you.
You may want to consider a home inspection. Being a wise seller is key in this market. Having a home inspection prior to selling your house may be great negotiation power. You should raise this topic with your REALTOR® and see if it works for you. The cost varies from property to property.
Then there’s the costs of making it beautiful. It is usually a good idea to spend a little bit of money on needed repairs and inexpensive touches. By giving a fresh coat of neutral paint throughout your home (same colour/tone) it may give it a facelift (light colours are optimal). The KISS strategy here is great (keep it simple silly): maintain your yard, weed the lawn, clean your windows, replace light bulbs, clean floors etc. Its not always recommended to revamp kitchen or bathroom, but you should consider making it show ready.
Moving costs are sometimes an “oops, I forgot about that”. Do what you can to keep costs low but at the end of the day, let the pros lift the grand piano. A helpful tip: label the boxes. Trust me, its worth the extra 2 seconds.
There may be other costs to consider depending on your situation. I can help you be prepared for any costs that may come up.