It’s not easy to move out of your forever home. Your family’s home.
It’s been your home for a long time: through career changes, raising your family, and now into retirement or semi-retirement.
However, the house and property may now be becoming too big of a responsibility. It’s simply more house than you’d like to manage.
If you’ve come to this decision and you’re ready to downsize the family home, there are many things to consider. In addition to planning your timing and strategy and choosing your next location and home, it’s important that you understand the costs associated with your sale.
Here the costs to consider when selling your forever home:
- Preparing Your Home for Market Expenses
- Real Estate Commission Fees
- Lawyer Fees
- Taxes
- Mortgage Penalties
- Moving and Packing Expenses
Preparing Your Home for Market Expenses
To best prepare a home to sell, there are many upgrades and small repairs a home owner can complete that will help maximize your resale value. Usually repair and painting expenses are the home owners responsibility (and costs will vary depending on the condition of the home and local market) but your agent will be able to guide you about which repairs are necessary and the most likely to yield a high return on investment.
For some homeowners, they will elect to simply sell their property as is. Sometimes the effort or expense of repairs is too overwhelming. For anyone looking to get the best possible returns who is open to upgrades, here are some recommendations.
To start, the best way to convince potential buyers that they need to see inside the home is to make the outside look its best! Investing in landscaping of your property will significantly enhance curb appeal and increase your chances of receiving multiple offers. This can include gardening, edging, fresh soil and mulch, as well as exterior painting.
Once the curb appeal has been maximized, it’s time to focus on the interior. A fresh neutral paint is one of the surest ways to increase property value. Repairing small visible defects, ensuring appliances and the home’s mechanics are functional, upgrading hardware and light fixtures and decluttering are helpful upgrades.
Real Estate Commission Fees
When hiring a real estate agent to sell your home, most commonly in Ontario, the seller will cover the listing brokerage and buyer brokerage’s commission. The commission percentage depends on the agent’s experience, the services offered and delivered; however, you can expect a range of 4-6%+HST of the selling price. The higher the commission, the more you can expect a full service approach and inclusion of listing expenses like staging, marketing as part of the commission.
Legal Fees
This cost varies based on the law firm and the price of your home. In Toronto, you can expect to pay anywhere from $1800-$2500.
Taxes
Depending on the status of your home as your primary residence, there may be taxes owing during your sale. Primary residences are exempt from capital gains but it’s best to speak to your accountant and financial planner to ensure there are no surprises.
Also note that if you’re purchasing a downsizer home, there will be a land transfer tax on purchase.
Click the combined City of Toronto and Provincial Land Transfer taxes to calculate an estimate. The rates are similar for Ontario and the City, ranging from 1% for homes up to $250K, 2% for homes over $400K to $2M, and 2.5% for homes exceeding $2M in sales price.
Mortgage Penalties
If you have paid off your mortgage, you’re in the clear. However, if you still have a mortgage, regardless of its size, consult with your bank or lender before making any decisions to sell your home. Some pre-payment penalties can add up to thousands of dollars, so it’s worth investigating the restrictions that may exist on your mortgage lender agreement.
Moving and Packing Expenses
These costs can be highly variable depending on how much assistance is needed, how far you’re moving and how much decluttering needs to be done. Consider these expenses:
- Hiring a moving company (usually a few thousand dollars)
- Hiring a support with packing, decluttering, and home organization (usually around $60 an hour)
- Disposal charges for junk removal
- Boarding animals during the moving period
There is also the emotional cost to selling your home. Selling the home where you raised your family or built a life can stir up a lot of emotions. The physical move is one part—but the emotional transition matters just as much. This is where trusted, personalized guidance makes all the difference. It’s important to find an agent who is experienced as well as:
- Supportive and patient
- Clear and proactive
- Focused on protecting your interests, every step of the way
The costs to begin downsizing the family home can add up quickly, but if you’re prepared, you’re less likely to be surprised or unable to handle a particular expense.
In Part Two of our Downsizing the Family Home, we’ll look at your options on where to live after you sell!
Are you ready to move to the next stage? Let’s chat. Send me an email (hillary@hillarylane.ca) or text/phone (416-882-4707).
