Your Comprehensive Cost List for Selling
If you’re thinking about selling your home, you’ve most likely thought about the cost of selling a house in BC and what that calculates to exactly. This article helps to break down the cost of selling a home so that they can estimate what your take away profit will be after everything.
Home Preparation and Staging
You only get one chance to make a first impression, and in real estate first impressions are everything. In a hot market, like we have in BC, there are many buyers that only get to see a home once at an open house before they put an offer on it. Many buyers are seeing 10-12 homes on average per showing day, which means you have to stand out from the crowd. Sprucing up the home before you take photos of it will help to ensure that it shows great both online and in person. Home preparation and staging will make all the difference when it comes selling for top dollar, and the majority of sellers need to invest both time and money into home preparation:
Pre-Listing Home Inspection
A pre-listing home inspection is a great idea in a tough market like this. It will give you leverage as a seller, and an opportunity to fix a number of issues that come up in a home inspection [and believe us, there’s always something] prior to listing your home for sale. If you receive an offer that is subject to a receiving and approving a home inspection, you’ll already have an idea of what the inspector will uncover and what concerns the buyer may have. This will cost anywhere between $300-$800 depending on the size of your house, and may be an included service by your realtor.
Strata Documents (for Condos/Townhomes)
Strata documents are something that the buyers of your strata property are going to want to review at some point during the offer process. 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 $30-$250 depending on if it’s a rush order or not. At Kamloops Property For Sale, this cost is one that we cover ourselves.
Real Estate Commissions
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 and 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:
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 does not create the same first-impression as full service brokers. Full service agents will most likely pay for professional photography, videography, virtual tours, floor plans, online marketing and facebook ads, print marketing, full colour flyers, professional cleaning, pre-listing home inspections, staging, and more.
Realtors in the Greater Vancouver area will typically charge anywhere from 1-4% to list a home for sale, and this amount depends on the agent’s experience and results, included services like staging and professional photography, and the amount offered to the agent who brings the buyer.
Of course there is always the least expensive option, which is to sell your home yourself without the help of a professional real estate agent. This is also known as the For Sale By Owner (FSBO), and requires that the seller has an excellent grasp on the real estate process, real estate contracts, determining market value, and experience in sales and marketing. While some are successful in selling their homes on their own [typically past realtors, developers, or builders], others spend many frustrating months on the market with little action and end up hiring a realtor. Case in point: Founder of the ForSaleByOwner website Uses a REALTOR to Sell his Own House.
Keep in mind that like all things in life, you get what you pay for. With your home most likely being your largest asset, you’ll want a realtor that has the experience and skills to make sure that you result in the highest profit and are contractually and legally safe. While some realtors may be more expensive commission wise, their experience and skill set will return a higher profit to you than a discount broker. Related Article:
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. If you are buying and selling, it is best to keep the same notary or lawyer for both transactions. 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.
For a sale only you’re looking at about $660-$950, and if you’re also looking to purchase you’re looking at about an additional $950-$1400. Keep in mind that with these notary and lawyer prices they are very much subject to your situation and the complexity of your transaction.
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.
Other Costs to Sell
While the above accounts for the majority of 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.
And last but not least, a 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 or text at 250-319-5896 or email email@example.com 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.