Achieving your goals when selling your home
all starts with one thing: Knowledge!
Once you have determined a fair market price for your home, you can calculate your bottom line. This is the amount that you will net (get a cheque for) after paying all of the expenses associated with selling a home. Remember, by selling your home yourself, the only cost you avoid is the real estate agent's commission. You will still have to pay all of the other closing costs, just like any other seller.
Closing costs vary from area to area and also depend on how each individual contract is structured. The following are items that you may need to deduct from your sales price to determine your net proceeds:
- MORTGAGES OR LOANS - Any first, second, etc. loans, or mortgages. Also any liens that occurred if you used your home as collateral. Call or write your lender and ask for the amount to pay the loan in full (often not the same as the principal balance).
- ATTORNEY FEES - There will be disbursement fees, courier fees , faxes, letters, postage, and transfer fees etc...
- APPRAISAL FEES - If the buyer is obtaining new financing for the purchase, the lender will require a professional appraisal on the house. This is another negotiable item, but is often paid by the seller in some areas.
- STRUCTURAL / GENERAL INSPECTIONS - Professional independent inspection services are required by law in some areas and often requested by buyers to make them more confident about the purchase. It's often a good idea to have your own inspection done first to discover any potential problems before they become an issue with he buyer.
- TITLE INSURANCE FEES - Title insurance protects the buyer and lender against issues of improper ownership or transfer. The title insurance company will research the title to make sure there are no liens, judgements, or clouds on the title that would effect the ownership rights. This is primarily done in the United States market but is becoming more common in Canada.
- PREPAYMENT PENALTIES - Many private and some conventional loans have specific monetary penalties if the loan is paid off prior to a certain date.
- RECONVEYANCE FEES - This fee may be charged by an attorney or notary to clear off the lien on the title when your existing loan is paid off at closing.
- ASSUMPTION FEES - Loans that are being assumed by the buyer often have an assumption fee charged by the lender.
- HOME WARRANTY COVERAGE -Depending on the plan, a home warranty covers items in the house (plumbing, electrical, appliances, etc.) for a period of usually one year.
For a list of specific charges, you can contact a mortgage lender, or a real estate attorney. Of course, I would be happy to provide you with a net proceeds analysis at no cost or obligation.
After completing the first two steps in the process, it is entirely possible that you may decide not to sell after all. Perhaps the market values are not what you had thought, and you won't be able to net enough money on the sale to be able to accomplish your next goal.
The important thing is to accept the realities of the market.
If the timing isn't right for you, nothing will make it right!
Brian Rooney 604-888-7424
#201 20999-88th Avenue, V1M 2C9
HomeLife / Benchmark Realty Corp.