Once you decide to sell your home, you may think that all you have to do is list it for the price you want. However, it’s not uncommon for homeowners to spend thousands, even tens of thousands of dollars when selling their homes. Being aware of these “hidden costs” can help you boost your bank account when deciding to sell and determining the price of your property. Here are some of these elusive costs you need to know about.

This could be one you’re anticipating, but perhaps the amount is where the shock comes into play. Real estate commissions, paid to both real estate agents, run between 5% and 6% of the home’s sale price.  If your home sells for $2,000,000, that in itself is up to $120,000 you’ll pay out to agents. There may be opportunities to negotiate this cost down, but that’s hard to do.  On top of that, you may also have municipal and provincial taxes to pay on top of the commission rate.

Staging your home is a big process. It often involves removing as much clutter and personal belongings as possible and setting up the home in the most attractive way possible to encourage buyers to see themselves in that space.  You want to depersonalize the space so that the would be buyers can see them in your home, as opposed to them seeing your home the way you want it decorated.  The average cost of home staging ranges from $900 to $4,800 if you hire a professional. You could do the work yourself if you have appropriate furniture to use to get the best results. Staging takes skill and experience to get just right, though.

The amount owed on your existing mortgage must be paid in full at the time of the sale. Most commonly, the amount received for the sale covers most of those costs. However, prorated interest on the mortgage can be a factor. The lender may stipulate that you need to pay a prepayment penalty/discharge fee if you are paying off the mortgage within a specific timeframe of purchasing the home.  Find out from your lender if there is a prepayment penalty since this could amount to thousands of dollars.

Title insurance is a type of protection from claims made against the ownership of the home. It’s common for the seller to pay the buyer’s title insurance cost. If there are concerns with the title of the home, this insurance helps cover the buyer’s losses.

You may owe real estate taxes for the time you’ve lived in your home. In many provinces, these are paid in arrears, which means after time passes. If you paid taxes in January for the previous six months but sell your home in March, you may owe property taxes for three months (January through March) of the current year. In short, what you’ll pay is based on the length of time you’ve lived in the home.

You’ll need to prep your home as a part of the process of preparing it for sale. This could include tasks like cleaning the carpets, power washing the driveway, paying for updates to the exterior, trimming trees, and even a few coats of paint indoors. Even if you do the actual work yourself, you still have to consider the cost of materials and supplies to make these upgrades. The hope here is that any money you put into the home comes back to you in terms of a higher sales price, however, you will still need to outlay the money before the sale.

The photos you use in your home’s listing are one of the most powerful marketing tools you have. Ensuring they are done well and showcase your home positively is critical to getting people to come to see the property in person. That’s why it is typically worth paying a professional fee for this service instead of doing it yourself or using your agent. The costs depend on size and location but can range from $500 to $1,000 and video will run you anywhere from $1,000 to $2,500 depending on the size of the home and the scope of the video you want to see.

It’s your responsibility to pay for the utilities you use until the day the home transfers to the new homeowners. You may not realize it initially, but that could mean added costs even if you’ve moved out. For example, you’ll need to keep the air conditioning and heating on even when your home is empty. You also may need to pay for water, sewer, and electricity for those final days.  Just because you have moved out, doesn't mean it isn't your responsibility.

A capital gains tax is a fee levied on the difference between the amount you spent to buy your home and the amount you sell it for, minus improvements you’ve made to the home. There are a lot of exemptions to this tax that could reduce how much you actually have to pay. It’s worth having a conversation with a tax professional before you decide to sell your home. You wouldn't want to sell your home with an expectation of a certain profit only to find out you are in a shortfall because of the taxes owed.

Then there are the homeowner’s association or maintenance fees to consider. You may owe these fees, or a portion of them, for the month in which you’re leaving. These monthly dues are the same ones you’re already paying month-to-month to help cover maintenance and upkeep costs in and around your community.

Attorneys typically review and implement the sales contracts and any other terms and conditions of the sale. Their fees are almost always in addition to your real estate agent’s fee and are another unexpected cost of selling a home. It’s not unusual to spend $1,000 to $2,000 on attorney costs, especially if you’re not using a real estate agent.

There may be additional costs associated with the sale of the home if you agree to seller concessions to satisfy what the buyer requests. The seller may agree to pay a portion of the buyer’s closing costs as a part of the deal. This could be a part of the negotiations you do with the buyer to come to an agreement. Also, note there could be repairs or upgrades that your buyer has worked into the sales contract. For example, you may agree to pay to reduce the overall price of the home to account for the cost to repair a broken sewer pipe. Instead of doing the work yourself, you’ve reduced what the buyer has to pay to you so they can handle the repairs later.

Selling your home comes with a lot of hidden costs. In addition to these costs to sell the home, there are a number of additional expenses you need to factor in. These can include the costs of moving into a new home, including paying movers, using a storage unit for a short time, land transfer tax, buyer attorney fees and buying new furniture, just to name a few. Knowing what to expect can help you eliminate money stress and get on top of these costs so they don’t surprise you.

The best way to combat the high fees and stress of buying and selling your home is to reach out to Young Realty Inc. for all of your real estate needs.