If you're thinking of selling your house to take advantage of the market you will probably agree it is best to be prepared!
Now, although it would be great to sell your home and walk away with the difference between your mortgage and sale price as a profit, it doesn't quite work that way. There are costs involved to sell your house as well as considerations when buying your next home.
So, let's focus on getting you prepared for all of the costs involved so you can work out your budget on your next home!
Have a quick watch of this video, then start getting your documents ready.
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Costs to Sell
Here is a list of the most common costs to sell your home, though there can be additional expense, these are generally the most common.
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Real Estate Commissions
Your chosen real estate professional and the agent who brings the buyer will share the commission of anywhere from 3-7% of the total purchase price. This is money that you will pay from the proceeds of your sale. Now, although you can in some cases negotiate commissions, often in real estate if you're dealing with a true professional you will often receive what you pay for. A real estate professional who commands a higher commission should be able to in turn sell your home for more money, faster and with less work on your behalf which generally results in a better experience. For a list of our recommended realtors in your area please contact us and we will recommend one in your area.
It will cost you approximately $500 in legal fees. There is also the cost of disbursements, such as registration fees and related expenses, that may cause this number to increase.
Mortgage Penalty or Fee's
If your mortgage is closed you will likely be paying a discharge fee on top of potentially a penalty to break your term. These penalties can vary from 3 months interest to varying IRD (interest rate differential) penalties. It's best to contact your lender to find out what your penalty is and then contact your Mortgage Broker to do a comparison for you. Lastly, in some cases you can actually port your mortgage from one property to the next without a fee. Again, it is best to have your broker look into the numbers to make sure it makes sense for you.
Painting, housing repairs, cleaning. These are just some of the costs you may need to consider to get your house ready to sell for top dollar. Also, you may wish to consider having your house staged, again this will be between you and your real estate professional to determine.