Selling Your Home in Canada? Here’s What You Need to Know About Fees! 🏡💰
Thinking of selling your home? One of the first questions you may have is: What are the fees involved in selling a house in Canada? And more specifically, who pays for real estate lawyer fees when selling a home?
Selling a home isn’t just about finding a buyer and signing the paperwork—it comes with costs you need to be prepared for. From mortgage penalties to home staging and legal fees, understanding these costs upfront will help you budget wisely and maximize your home’s sale price.
At Ragona Sisters, we believe in making real estate easy for our clients! Let’s dive into the key expenses you should expect when selling a home in Canada.
💰 Common Fees When Selling a House in Canada
When you sell a home, your lawyer handles the distribution of funds on closing day. Typical costs include real estate lawyer fees, mortgage penalties, land transfer taxes, home staging, and possible repairs.
Here’s a detailed breakdown of the fees associated with selling your home:
🔥 Mortgage Pre-Payment Penalties
Do you still have an outstanding mortgage? If you sell your home before your mortgage term expires, you could face pre-payment penalties.
Why Sell Before the Mortgage Term Ends?
• Job relocation
• Expanding family or downsizing
• Change in financial situation
The amount you’ll pay in penalties depends on your mortgage type.
🏠 Open Mortgages – No Penalty!
An open mortgage allows you to sell your home anytime without penalties. These mortgages provide flexibility but often come with higher interest rates.
🏡 Closed Mortgages – Expect a Penalty!
Closed mortgages lock you in for a set term with lower interest rates. If you sell before the term ends, you’ll need to pay a penalty—either:
✅ Three months’ interest OR
✅ Interest Rate Differential (IRD)—whichever is higher.
Let’s crunch some numbers 📊:
Suppose:
• You have a fixed-rate closed mortgage of 5.99%
• You owe $400,000
• You have 30 months left on your term
📌 Three-Month Interest Calculation
Outstanding balance: $400,000
Annual interest rate: 5.99%
Monthly interest: ($400,000 × 5.99%) ÷ 12 = $1,996.67
Three months’ penalty: $1,996.67 × 3 = $5,990.01
📌 Interest Rate Differential (IRD) Calculation
Current market rate for a 3-year term: 3.89%
Rate difference: 5.99% - 3.89% = 2.10%
IRD amount per year: $400,000 × 2.10% = $8,400
IRD for remaining term (30 months): ($8,400 ÷ 12) × 30 = $21,000
🚨 Penalty to break your mortgage: $21,000 (since the IRD is higher than the three-month interest).
👉 💡 Pro Tip: Before listing, check with your lender to determine your pre-payment penalties. You may be able to port your mortgage to your new home!
🏡 Home Inspection Costs
While buyers typically pay for a home inspection, some sellers choose to get a pre-listing inspection to attract more offers.
💰 Cost: $400 – $900
A pre-inspection report helps:
✅ Buyers feel confident making an offer
✅ Identify issues before listing
✅ Speed up the sale process
💡 Rental Equipment Buyouts
Do you rent a water heater, furnace, or AC unit? Buyers may refuse to take over the rental contract. In that case, you’ll need to pay it off before closing.
💰 Cost to buy out HVAC system: $2,500 – $10,000+
📌 Buyers often prefer homes without rental contracts because they can negotiate better terms directly with providers.
🎭 Home Staging – Does It Really Work?
Yes! Professionally staged homes sell faster and for more money.
🏡 According to real estate studies:
✅ Staged homes sell 30% faster than non-staged homes
✅ Homes staged for just 1% of the list price sell for 5–15% more
💰 Cost of Home Staging:
• Consultation: $250 – $500
• Full staging: $2,000 – $6,000
• Virtual staging: $30 – $150 per image (great for empty homes!)
📌 💡 Tip: Staging doesn’t have to be expensive! A simple refresh—like decluttering, painting, and rearranging furniture—can work wonders.
🔹 Want expert advice on staging? Contact Ragona Sisters today!
⚖️ Real Estate Lawyer Fees – Who Pays What?
Both the buyer and seller are responsible for their own legal fees.
What Does a Seller’s Lawyer Do?
✅ Reviews the Agreement of Purchase and Sale
✅ Ensures mortgage and debts are paid off
✅ Handles title transfers
✅ Prepares closing documents
✅ Gives the keys to the buyer’s lawyer
💰 Seller’s Lawyer Fees: $1,500 – $3,000
What Does a Buyer’s Lawyer Do?
✅ Conducts a title search
✅ Confirms property tax payments are up to date
✅ Registers the new owner with the government
✅ Arranges title insurance
💰 Buyer’s Lawyer Fees: $1,800 – $3,500
🏡 Selling a Home in Canada is Expensive – But Worth It! 💰
Selling your home is a big financial decision, and it’s important to plan for the costs involved. From mortgage penalties and lawyer fees to home staging and inspections, knowing what to expect helps you budget wisely and sell your home for top dollar.
👉 Thinking of Selling? Let the Ragona Sisters Help!
✅ Expert advice on pricing & marketing
✅ Professional staging tips to maximize value
✅ Seamless, stress-free home-selling experience
📲 Call or DM us today for a FREE home evaluation!
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