Understanding Closing Costs: What Every Seller Should Know

Don't let selling costs catch you off guard! When selling your home, it’s easy to focus on the sale price—but don’t forget about the closing costs. Hidden fees can add up quickly, and being prepared can help you avoid surprises. Here’s everything you need to know about closing costs when selling your home.

1. Adjustments

Adjustments are common in real estate transactions and will be settled on closing. If you’ve prepaid certain expenses—like property taxes or utility bills—the buyer will reimburse you for the portion covering the time after they take possession. For example, if you’ve paid six months of property taxes and the buyer closes with three months remaining, you will receive a reimbursement for that amount at closing.

2. Legal Fees

Legal fees are required to handle the sale of your property. In addition to legal fees, you’ll be responsible for your lawyer’s disbursements (out-of-pocket expenses) such as administration and search fees. These costs vary depending on the property and the legal firm handling the transaction. HST is also applied to both legal fees and disbursements.

3. Real Estate Fees

Real estate fees are always subject to HST. A portion of the fee is allocated to the co-operating brokerage (if applicable), while the remainder goes to brokerage you're working with. This fee covers:

• Professional home staging

• Videography and photography

• Marketing and advertising

• Administrative support

• Your Real Estate Agent

Staging, videography, photography and marketing services are all included with Faris Team at no extra cost.

4. Capital Gains Tax

If you’re selling your principal residence, you won’t have to pay capital gains tax. However, if you’re selling an income property, vacation home, or investment property, capital gains tax may apply. Consult your accountant or financial advisor for personalized advice.

5. Mortgage Penalties (If Applicable)

If you’re breaking your mortgage before its maturity date, you may face penalties. The amount varies based on your lender and mortgage terms. Speak with your mortgage specialist to understand potential costs.

6. Other Costs to Consider

Beyond closing costs, additional expenses can arise when selling your home:

• 🚛 Moving Expenses – Hiring movers, renting storage, or professional cleaning services can add to your budget.

• 🛠️ Repairs & Touch-Ups – Buyers notice small details, and last-minute fixes, fresh paint, or minor repairs can increase your home’s appeal.

• ⚖️ Carrying Costs – If your home sits on the market longer than expected, you’ll still be responsible for mortgage payments, utilities, and property taxes until it sells.

Thinking of Selling? 🏡

Selling a home is more than just the final sale price—it’s about knowing the costs involved and preparing in advance. The earlier you plan, the better equipped you’ll be to navigate the selling process smoothly.

Get in touch early so our trusted sales partners can help break down costs, maximize your home’s value, and guide you through the process stress-free.

✅ Book a Free Home Evaluation – Discover what your home is worth in today's market & talk to a local real estate agent to get expert insights.