Seller's Costs

During the home buying process, especially for the first-time sellers, unexpected costs may come into play that wasn't planned for. The list below outlines the extra costs involved in selling a home. These factors should be considered when putting together your home selling budget.

Legal (Notary/Lawyer) Fees

Every transaction that happens in real estate requires legal representation, whether it’s a notary or a lawyer you’ll need to choose someone to assist you with completion. Legal costs will include the following, lawyer service costs plus disbursements (additional costs for preparing, researching, and conducting a title search, etc...) Typically on an average single-family home sale, the costs will range from $800 to $1100. They could vary based on the size of the property; or the lender charges to arrange and register the mortgage; as well as the complexity of the title transfer process.
They will be the ones to draft up a statement of adjustments for you, in which you will know how much money is due upon completion and what the exact closing costs are to complete. In the case that something goes wrong, they will be your representation to ensure things are smoothed out. Ann & Julia will get you 3 quotes from a lawyer/notary for you to choose from.

If you are also looking to purchase budget an additional $1,000 to $1,500. It is best to use the same lawyer/notary for both the Sale and Purchase.

Strata Documents (for Condos/Townhomes)

If you own Strata Property - Strata documents are something that the law requires the Seller provides to the buyers of your strata property. By law, you must provide 2 years of meeting minutes, current bylaws and rules, current budget and financials, a depreciation report (if available), insurance certificate, and a Form B. Ann & Julia are there to help you obtain and organize these documents ready to hand over to the buyers. It is within your best interests to have these documents ready sooner rather than later, because if a buyer can review them in advance then it is more likely that you’ll receive a subject-free offer. This is an order that you’ll need to place with the property management company and can cost anywhere from $100-$500 depending on if it’s a rush order or not. Ann & Julia Thompson are happy to say that we cover this cost ourselves.

Mortgage Discharge

When you sell your home, depending on your mortgage agreement and the fine print then your lender may charge you a penalty if you sell the home during the mortgage period. Most traditional lenders will allow you to apply the remaining mortgage balance to the mortgage of your new property (provided that it is purchased within a certain ‘recent’ time after closing). If you’re only selling and not purchasing, then you will most likely have to pay a pre-payment penalty which can often amount to thousands of dollars. To estimate how much this is, you’ll want to talk to your lender or mortgage professional before you list your home for sale so that you have a full understanding of the discharge details regarding your mortgage.

Penalties and Taxes

One thing that homeowners often forget when it comes to selling their Vancouver property is any penalties and taxes that they might incur. The most common of these is a mortgage breaking penalty (referred to above) indeed 60% of Canadians will break their mortgage early during the process of a sale. As a seller, you might also be subject to Capital Gains Tax. This is applicable if the home you are selling is not your principal residence, however, in some cases, you might also be liable to pay taxes when selling your principal residence. There is also the Speculation and Vacancy tax and if you live in Vancouver the Empty Homes tax – Often offers will require that you prove that you have claimed the exemption for these taxes (so that the new buyers are not liable)

Municipal Property taxes: Your share for the year of the transaction

Goods and Services Tax (GST) – there is GST on all services - on the real estate commission and on the legal fees. While they have no way of impacting the fees and penalties you pay, a good realtor will certainly be able to flag things that you should consider as a seller.

Realtor’s fees

Due to the principles outlined in the Canadian Competition Act, there is no fixed commission that is charged in BC by real estate agents. Instead, the province’s real estate industry follows the idea of fair and open competition, with agents deciding for themselves what they charge clients.

Real Estate commissions and the cost of these commissions is often the largest expense for most sellers’ however when calculating the cost of selling a house in BC it is important to look at which option will give you the most profit – not which one will cost the least. Cost and profit are two very different things. In the Greater Vancouver area, there are a variety of services and commission options to choose from, and with over 14,000 realtors to choose from each will offer a differing experience, set of skills, inclusions, and results.

When you hire a real estate agent to sell your home, the commission you pay is generally split four ways:

the agent who works for you, the Seller (aka the Listing Agent)
the Listing Agent’s brokerage
the agent who brings the Buyer (aka the Buyer’s Agent)
the Buyer’s Agent’s brokerage

From the listing agent’s commission also comes included services – such as marketing. Discount agents and brokerage don’t include many services, and as a result, their marketing and online presence do not create the same first impression as full-service brokers. Full-service agents will most likely pay for professional photography, virtual tours, floor plans, online marketing and Facebook ads, print marketing, full-color flyers, strata documents and more.

Ann & Julia Thompson's rate of commission is for full service and we charge 7% on the 1st $100,000 of the sale price and 2.5% on the balance over $100,000 (+ 5% GST). These monies will be paid out by the lawyers/notary from the sale proceeds on Completion of your home sale (no up front fees). Our goal is to exceed our customers’ expectations.

Other Costs to Sell

While the above accounts for the majority of the cost that you’ll need to cover when selling a house in BC, the below are additional tidbits that you’ll want to consider as well.

Strata move in move out fees [if strata – typically $100-$300]
moving truck
professional cleaners (carpet cleaners or house cleaners)
pet boarding costs [in case your pets need a place to be temporary]
extra keys cut or fobs purchased for your realtor and/or possession

And last but not least, a piece of good news

The Buyer is responsible for paying property transfer taxes, so that’s one cost you won’t have to budget for!

-

Now that you have a rough idea of the cost of selling a house in BC, your next step will be determining the market value of your home. If you’re interested in a free market evaluation, then give us a call at 604-618-7142. Prefer text? 604-618-7142 or email julia.thompson@c21.ca to start a conversation. We’re here to help, and we can provide you with a comprehensive pricing strategy and an estimate on the amount that you can get for your home in today’s market.

If you hire the right realtor then their commission won’t be a cost, it will be an investment. The right realtor won’t just represent you, they will actively market your property, driving as much interest as possible in a bid to deliver the best possible results for you.

In this ever-changing market where buyers have an increasing number of options available to them, it’s more important than ever to have a good realtor who knows how to market your property. Your home needs to be presented at its best and be available to show at a moment’s notice in order to stay competitive.