Closing costs are the fees that are paid to finalize the sale of a home. These costs are typically paid by the seller and can vary depending on several factors, such as the price of the home, the location of the home, and the type of financing used.
Here are some of the most common closing costs associated with selling a home:
Real estate agent commission: Real estate agents typically charge a commission on the sale of a home, which is a percentage of the sale price. The commission rate is typically negotiable, but it is typically around 5% of the sale price.
Legal fees: Lawyers are responsible for drafting and reviewing the legal documents associated with the sale of a home. Legal fees can vary depending on the complexity of the sale, but they are typically around $1,000 to $2,000.
Title insurance: Title insurance protects the buyer from any unexpected liens or encumbrances on the property. Title insurance typically costs around $200 to $400.
Property transfer tax: The property transfer tax is a tax that is paid to the provincial government when a property is sold. The amount of the property transfer tax varies depending on the province, but it is typically around 1% to 2% of the sale price.
Disbursements: Disbursements are miscellaneous fees that are paid to third parties, such as appraisers, home inspectors, and surveyors. Disbursements can vary depending on the sale, but they are typically around $500 to $1,000.
Here are some tips for reducing closing costs:
- Negotiate your real estate agent’s commission. The commission rate is typically negotiable, so be prepared to negotiate with your agent.
- Shop around for legal fees. Legal fees can vary depending on the lawyer, so it is a good idea to shop around and get quotes from multiple lawyers before choosing one.
- Consider title insurance. Title insurance is not required in Canada, but it can protect you from any unexpected liens or encumbrances on the property.
- Factor closing costs into your asking price. When setting your asking price, be sure to factor in the closing costs that you will be responsible for paying.
Closing costs can be a significant expense when selling a home, but it is important to remember that these costs are a necessary part of the process. By following these tips, you can reduce your closing costs and maximize your profits from the sale of your home.
This article is for general informational purposes only and is not legal advice. Contact us today to discuss your specific situation