Despite how it may look on television, selling your home is never as simple as deciding on a price, tidying and putting up a sign in your front yard. Whether you’ve outgrown your neighbourhood, need to downsize/upsize, or are looking for a fresh start, there are a lot of steps you’ll need to take before you’ll be ready to sell your home. Part of the process will also involve budgeting as there are plenty of costs associated with selling your home in Canada that you may not be aware of. Learn more about the types of costs you’ll encounter and what you can expect to pay as part of the selling process so you’re prepared to take the leap and list your house.


The biggest fee you’ll have to pay when you sell your home, is the commission fees of the REALTORS® involved with the sale of the property. Your REALTOR® fees will depend on where you live and what you negotiate. As an estimate, you can expect to pay between 3%-7% of the price of your home in REALTOR® fees. In Canada, generally the seller pays the commission to both the buyer and seller agents. The fees are first paid to a lawyer, who will then pay out the commissions to both the buyer and seller agents after the transaction for your home has been completed.

If the market is hot, you may be able to sell your home without a real estate agent to save on these fees, but if you go that route, you won’t want to do so without getting your home appraised professionally and seeking out a real estate lawyer to draw up your paperwork.

To put these fees into perspective, if you purchase a $400,000 home and have to pay a 4% REALTOR® fee on the sale, you’re looking at $16,000.

Legal Fees

The term “legal fees” sounds very broad and encompassing so it’s important to understand what it refers to and how much it’ll set you back when you sell. On average, Canadian sellers will likely have to pay around $1,500 in legal fees but what exactly are these fees being paid toward?

Title Search

A lawyer will perform a title search to look through public records to confirm a property’s legal ownership and determine what claims or liens are on the property. This is an important part of the process you won’t be able to do on your own.

Letter Of Direction

To put it simply, a Letter of Direction is a letter the lawyer will write on your behalf that provides direction or instructions to the buyer. Because you’ll be obligated to provide clear title to the property to the buyer on closing, your lawyer will create a Letter of Direction on your behalf agreeing to use the proceeds from the sale to discharge any outstanding financing and property tax debts.

Statement Of Adjustments

A statement of adjustments is similar to your monthly bank statement. This document includes a list of various debits and credits with a balance at the end. In the buyer’s statement of adjustments, the debits represent amounts already paid, such as the deposit, while the credits include the purchase price of the home and any fees or utilities the seller has prepaid. The total amount in the credits column (purchase price + prepaid items) minus what’s in the debit column (the deposit) is what the buyer will owe you on closing day.

Closing Date Fund Transfer

On your closing date, your lawyer will receive the required money from the buyer’s lawyer to close the transaction. Your lawyer will then proceed to send the Land Titles documents for registration and ensure you get the funds deposited into your account.

Home Staging Costs

Taking the time to make your home appealing to potential buyers is a great idea, but it can set you back a few thousand dollars in the process so be sure to do your homework. The cost you’ll pay for home staging will be determined by what exactly your home needs. You may be able to do the staging on your own to save some money, but you’ll want to budget for storage space regardless as it’s doubtful that all your current possessions will make the cut when it comes to staging a clean and modern home.

Home staging doesn’t have to be a dramatic or complicated process. It can be as simple as decluttering/cleaning to make your spaces feel bigger and brighter, removing personal belongings like family photos and making sure it smells nice, by baking some cookies before showings or using room fresheners. 

Land Transfer Taxes

In Ontario, buyers of houses and condos pay land transfer tax when they purchase a property, not the sellers, so this is a fee you’ll encounter only if you choose to buy a new house/condo after selling your current one. Your lawyer will arrange for land transfer taxes to be paid when the deed to the new home is transferred in your name on closing day. To calculate what fee you’ll likely encounter when purchasing a new home, you can use a land transfer tax calculator.

Mortgage Insurance

Your home is most likely the biggest purchase you’ll ever make in your lifetime and having mortgage insurance can help you protect it in case something happens to you. If you don’t have mortgage insurance through a current life insurance policy, you can explore mortgage insurance options through your financial institution.

Mortgage insurance differs from life insurance coverage as it only covers your outstanding mortgage balance. The money would go directly to the bank or mortgage lender, not your beneficiary. This means that there’s no cash, payout or benefit given to your beneficiary in the event that something should happen to you.

The cost of mortgage insurance will differ depending on your loan value and other factors so it’s important to investigate your options in advance to be prepared for these monthly payments should you decide to pursue it.

Sales Tax On Real Estate Commissions

In each province, real estate commissions are subject to the applicable sales tax rate. For example, Ontario’s sales tax rate is 13%. You’ll want to calculate this in advance, so you’re prepared to pay the sales tax on your real estate commissions and don’t get caught off guard with a charge you weren’t expecting.

Cleaning Fees

As a seller, you’ll want to ensure your home is clean and ready for new owners. Do some research into cleaning costs in your local area to determine what services you’ll need and how much they’ll set you back so you can factor that into your overall budget. On average, the cost of a cleaning company in Canada will come in around $216, with most homeowners spending anywhere between $150 – $304. Cleaning companies usually charge by the hour or by square footage so do your calculations in advance to give you a better idea of how much space you’ll need covered. Per hour costs can range between $64 – $116 and this cost often includes multiple cleaners.

Mortgage Prepayment Penalties

If you end your mortgage before it matures, you can expect to pay penalties and discharge fees. How much you pay will be determined by which type of mortgage you have (fixed or variable). For a variable rate mortgage, the penalties will be the equivalent of three months’ worth of mortgage payments, plus a discharge fee of $200-$600, depending on the lender. For a fixed rate mortgage, the penalties can be much higher so it’s advised to contact your lender in advance for more information on what costs you’ll incur should you break your mortgage agreement. If you’re looking at a high penalty to break your mortgage, you may be able to transfer it to a new property for a significantly smaller fee.

Preparing to sell a home in Canada is a complex process, but it doesn’t have to be stressful. Understanding the costs you’ll incur and how the process works, will help you streamline your experience. Reach out to our team to learn more about how to sell a home in Canada and why you should plan out your next steps in advance.