What does it cost to sell a home in Canada?

Selling a home brings a bill as well as proceeds. Knowing the costs in advance lets you set a realistic target and avoid a surprise on closing day.

The short version: costs often reach 3% to 5% of the price or more. The biggest is real estate commission. Ask your agent for a net sheet showing what you will actually receive.

Real estate commission

The biggest cost is usually real estate commission, which is negotiable and often totals roughly 3% to 5% of the price, plus sales tax on the commission. It is commonly split between the listing agent and the buyer's agent, and a common structure is a higher percentage on the first $100,000 and a lower one on the rest.

Other costs

• Legal fees to handle the transfer and discharge your mortgage, often a thousand or two dollars.
• Mortgage penalty if you break your mortgage early, which can be thousands of dollars.
• Repairs, staging, cleaning and photos.
• Moving costs.
• Adjustments for property tax and utilities with the buyer.
• Capital gains tax, if the property is not your principal residence.

Example: a $700,000 sale

• Commission at 5% on the first $100,000 and 2.5% on the rest: $20,000, plus sales tax (about $2,600 at 13% HST).
• Legal fees and disbursements: about $1,500 to $2,500.
• Mortgage penalty: from $0 to several thousand dollars.
• Repairs, staging and moving: varies.
• Together, costs often reach 3% to 5% of the price or more.

What you take home

If the same home has a $400,000 mortgage balance, the proceeds before penalty, repairs and moving are about $700,000 minus $20,000 commission, $2,600 tax, $2,000 legal fees and $400,000 mortgage, or about $275,400.

How to lower the cost

• Compare agents' commission terms.
• Time the sale near your mortgage renewal, or ask about porting.
• Do small repairs and cleaning yourself.
• Do not over-spend on renovations just before selling.

Do not choose on commission alone

Price, marketing and negotiation affect what you earn. A lower commission is not a saving if the home sells for less. Ask each agent for a market analysis, a marketing plan and references.

Ask for a net sheet

Ask your agent for an estimate of what you will actually receive after all costs. Our Property Calculator can help you start with a reference value.