Cost of Selling a House in BC: Closing Costs Selling a Home in BC
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by Richard Morrison
- June 22, 2016
- Sellers
- 0
Selling a house can be an exciting venture but it’s important to understand the costs associated with doing so in BC, Canada. As an experienced real estate agent, I am here to provide you with key information on what expenses you should anticipate when selling your home.
The first factor that affects the cost of selling is the listing fees for services such as marketing and advertising. In addition, there may also be some hidden additional costs involved with preparing the property for sale, like repairs or staging.
Finally, after finding a buyer and closing the deal on your home – don’t forget about taxes!
Quick Summary
Here is a quick takeaway of the main costs to sell a $2 million home in British Columbia, Canada:
Main Costs to Sell a Home in BC:
- Listing Fees for Realtor Services: $60,000-$80,000 (3-4% of sale price)
- Legal Fees: $1,400-$2,500
- Home Staging: $2,000-$5,000
- Home Inspections: $300-$500
- Mortgage Discharge Fee: Varies
- Property Transfer Tax: $46,000 (1% of first $200,000 + 2% of remaining $1.8 million)
- Capital Gains Tax: Up to 26% of 50% of capital gains
- Decluttering/Cleaning: $300-$800
- Exterior Curb Appeal Upgrades: Varies
- Interior Painting: $50-$200 per room
- Prorated Property Taxes: Varies
Total Costs to Sell a $2 Million Home in BC: Around $90,000 – $140,000
Factoring in all potential expenses before listing the home allows sellers to set realistic expectations.
Keep Reading:
- Cost of Selling a House in BC: Your Complete List …
- Legal Fees To Sell A Home In British Columbia
- BC Real Estate Commission Calculator in Vancouver
- Legal Fees For Buying A House In British Columbia
- Closing Costs of Buying a Home in BC – A Detailed List
- Tips To Selling Your Home – Guide for Vancouver
Home Preparation And Staging
Selling a BC home is intimidating. With proper staging and preparation, you’ll be ready to find buyers! First, make sure your home’s interior and exterior look good for potential buyers.
- Preliminary Home Assessment: A home staging expert will accompany you on a tour of your house, offering advice on how to get it ready for sale. The price for this assessment can vary between $150 and $600.
- Staging Charges: The expenses associated with staging a house can fluctuate based on the property’s dimensions. Based on research findings, staging a property under 1000 square feet can cost approximately $2000 or even higher.
- If your home exceeds 1000 square feet, anticipate expenses ranging from $2000 to $2800 for a single-bedroom unit.
- Alternatively, another estimate indicates that a home seller might spend between $3500 and $5000 to rent out an entire house, depending on the room count.
Real Estate Commissions
After learning about condo and townhouse strata documents, you should understand BC real estate commissions. Listing a home in British Columbia requires commission.
- Most agencies charge 3-5% of the sale price as commission.
Most agencies charge by the transaction’s services. Market the property, negotiate offers, help with paperwork, coordinate inspections and appraisals, and more. Note that some agents may not offer all of the above services or charge extra for them. To ensure you understand your contract, ask questions before signing. With this information, sellers can choose the best agency to sell their home quickly and at a fair price.
Pre Listing Home Inspection
After staging your home, get a pre-listing home inspection. Before selling the house, this inspection will reveal any issues. This process protects you and the buyer when selling your property.
Pre-listing home inspections cost $300–$500 in BC, depending on location. After the inspection, major repairs must be factored into the sale price. Buyers should receive a detailed report from the inspector detailing any needed repairs.
Sellers should do this before listing their homes because it gives them more control over the sale price and peace of mind that there won’t be any surprises.
READ MORE: How to Find a Good Home Inspector
Strata Documents For Condos And Townhomes
Selling a BC home requires more than just selling it. Before selling, condo and townhouse owners must understand strata documents. I can help you understand these documents! Condominium and townhouse residents must follow Strata Documents.
- Documents can cost from $150 to $500 depending on urgency.
This includes building maintenance fees, pet policies, parking restrictions, and other unit-specific information. Buyers need to know these requirements before buying so they can decide if this house is right for them.
As an experienced real estate agent, I must make sure all potential buyers have this vital information to make an informed home purchase decision. Before closing, buyer and seller should review all required documentation.
Legal, Notary, And Lawyer Fees
Budget for legal and notary fees when selling a house in BC, Canada. Sellers usually pay these costs, but buyers may share them. Before hiring professionals, check prices in your area.
- Legal Fees: Lawyers charge $1400–$2,500 for title search and land title office registration.
- Notary fees are $1200–$2000 plus GST/HST.
- Lawyer Disbursement Fees: These include photocopying, long-distance phone calls, and courier charges for document preparation and execution.
Your home sale may incur additional fees or taxes. When selling a house in BC, Canada, financial planning pays off. Preparing thoroughly saves time and money!
Mortgage Discharge In Canada
Next, mortgage discharge in BC, Canada. Paying off your mortgage when selling a home. Lenders, real estate agents, and lawyers complicate it. Hire an experienced real estate agent who understands the lender’s requirements and BC mortgage laws to ensure all parties are satisfied.
They can guide you through this process quickly and legally. A good real estate agent will also work with your lawyer to quickly resolve discharge-related issues. A professional handles these complex issues to ensure a smooth sale, saving you time, money, and hassle!
Property Transfer Tax In Bc Canada
Selling a house in BC, Canada, may require Property Transfer Tax (PTT) if you are buying another home in BC. Understanding PTT’s function is crucial.
BC taxes property transfers with PTT. Sellers pay 1% on the first $200,000 of their home’s fair market value and 2% on anything above that. If your house is worth $500,000, you’ll pay 1% on $200K and 2% on $300K ($6,000 total). Before signing, check for exemptions for certain transfers or buyers.
This information can help you make decisions and set realistic expectations about BC home selling costs. An experienced real estate agent can answer your questions about BC PTT rates and regulations.
Keep Reading:
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- Real Estate Myths: Avoid Mistakes When Selling Your Home
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Capital Gains Tax On Investment Properties In Canada
Selling an investment property in Canada involves capital gains tax. This taxation has many rules, making it difficult for Canadians. Understanding these rules is crucial to maximizing profits when selling BC real estate.
| Capital Gains | Eligible Capital Gain | |
|---|---|---|
| Definition | Any profit made on sale | Half of total gain |
| Taxable Amount | Total amount less costs | From above calculation |
| Maximum Tax Rate | 26% | 50% |
Real estate agents know that capital gains tax is calculated by subtracting allowable expenses from the sale proceeds. Canada taxes “capital gains” like this. Half of the capital gain is eligible for 50% taxation.
Up to 26% is taxed as ordinary income. Before making any large-scale financial transactions, consult a qualified accountant or lawyer. Certain exemptions may apply.
2% PTT Tax on Residential Property Over $3 Million
If the value of a residential property in British Columbia exceeds $3,000,000, an additional 2% levy will be added to the total value of the property that is higher than $3,000,000. This is in addition to the regular Property Transfer Tax (PTT) rate of 1% on the first $200,000 of the purchase price, 2% on the part of the purchase price between $200,000 and $2,000,000, and 3% on the part of the purchase price above $2,000,000.
Cost Of Decluttering A Home
Removing personal items like photos and knickknacks will help buyers visualize living in the space.
- According to Airtasker, the average fees to have someone declutter your home range from $50 to $100 per hour.
- Thumbtack suggests that the average rate for a professional organizer is $65 per hour
These services cost several hundred dollars per room (or more if extensive repairs are needed). However, it’s worth investing in making your property stand out and attract top dollar offers.
Cost Of Deep Cleaning A Home
When selling a house in BC, Canada, consider deep cleaning costs. Professional cleaners usually clean carpets, floors, walls, and ceilings for homeowners. This service usually includes window and pressure washing.
- This service costs $300–$800, depending on your property size and needs.
Some real estate agents require sellers to have their homes professionally cleaned before listing them. There are cheaper ways to show off your home to potential buyers than having it spotless. Scrubbing surfaces yourself or asking family and friends to help can save time and money.
Cost Of Painting The Interior Or Exterior Of A Home
After deep cleaning, painting the interior or exterior of a house depends on its size and complexity. When selling a house in BC, Canada, this will boost its value.
Interior painting requires labour to remove wallpaper and replace window trim.
- Primer, drop cloths, tape, brushes, and rollers cost $50–200 per room.
- Depending on quality, paint costs $45-100 per gallon (3.8L).
- Sanding, pressure washing, and caulking before painting exteriors adds labour hours.
Remember that investing in good paint adds significant curb appeal, making it worth every penny if done correctly, when calculating these costs before listing your property.
Cost To Add Curb Appeal To A Home
Curb appeal is like painting a masterpiece. Creating an attractive exterior that attracts buyers before they enter the house takes time, money, and effort. Here are some exterior home improvement ideas:
- Paint or stain faded trim, shutters, and doors.
- Add colour with flowers and shrubs around the perimeter.
- Upgrade old light fixtures, doorbells, mailboxes, etc.
- Window boxes with fresh flowers add charm.
- Replace worn steps/walkways with new materials.
As an experienced real estate agent, I know first impressions matter, so it pays to invest a bit in sprucing up the outside of your property to stand out from other homes on the market. When selling your home, a few minor improvements can boost its value.
Property Taxes Prorated At Closing
BC property taxes are prorated when selling a house. The seller pays municipal and school taxes until possession. After buying, the buyer pays all taxes. Before signing anything, both parties should understand this arrangement.
Real estate lawyers use mill rates to calculate proration amounts at closing. Before distributing sale proceeds to either party, they’ll deduct any unpaid utility bills. Buyers and sellers can ensure fairness by understanding these calculations.
Agent vs. Private Sale
For 2023, real estate agents are selling over 93.1% of BC homes.
An experienced agent can help you sell your home for top dollar. An agent can help you price, stage, negotiate, and market your home.
Agents charge a commission based on your home’s selling price. Depending on services and local custom, this is usually 3–5%. Legal fees for sale contracts and documents are additional costs.
Frequently Asked Questions
Q: What are closing costs?
A: Closing costs are the fees and expenses that are associated with the final stages of the home selling process. These costs can include legal fees, realtor fees, mortgage discharge fees, and other expenses.
Q: How much are the legal fees when selling a home?
A: The legal fees when selling a home can vary depending on the complexity of the transaction and the lawyer or notary you choose. On average, you can expect to pay around $500-$1,000 for legal fees.
Q: What are the costs associated with selling a house in BC?
A: The costs associated with selling a house in BC include legal fees, realtor fees, mortgage discharge fees, and other expenses. These costs can vary depending on the sale price and location of the property.
Q: What is a mortgage discharge fee?
A: A mortgage discharge fee is a fee charged by your mortgage lender to remove the existing mortgage from the property title. This fee is typically around $200-$400.
Q: How much are the moving costs when selling a home?
A: The moving costs when selling a home can vary depending on the distance of the move and the amount of belongings you have. On average, you can expect to pay around $1,000-$3,000 for moving costs.
Q: What are the typical costs of selling a home?
A: The typical costs of selling a home include closing costs, realtor fees, legal fees, and moving costs. These expenses can vary depending on the size and price of your home.
Q: How much does it cost to sell a house in Vancouver?
A: The cost to sell a house in Vancouver can vary depending on the price of your home and the services you require. On average, you can expect to pay around 5-6% of the home sale price in total costs.
Q: Do I need to hire a real estate agent when selling a home?
A: While it is not required to hire a real estate agent when selling a home, it is highly recommended. A real estate agent can help you navigate the selling process, market your home, and negotiate with potential buyers.
Q: What are commission fees when selling a home?
A: Commission fees are the fees paid to the real estate agent for their services in selling your home. These fees are typically a percentage of the final sale price and can vary depending on the agent and location.
Q: Should I hire a notary or a lawyer when selling a home?
A: The decision to hire a notary or a lawyer when selling a home is up to you. Both can assist with the legal aspects of the transaction, but a lawyer may provide additional expertise and protection. The fees for hiring a notary or lawyer can vary depending on the complexity of the transaction and the professional you choose.
Is It Worth It To Hire A Real Estate Agent To Help Sell My Home?
Realtors understand market trends and the complicated home-buying and selling process. They advise on pricing, paperwork, marketing, and buyer negotiations. They’re also well-connected locally and can offer insights into local neighbourhoods and upcoming listings that may fit your needs. A smoother transaction means more money in your pocket at closing.
Hiring a real estate agent provides financial security and peace of mind. When you hire experienced professionals like myself, I’ll make sure your move goes smoothly no matter where you are in Canada.
Can I Use Sale Proceeds to Cover Some Home Selling Costs?
Closing costs or broker fees may be paid from buyer settlement funds. Most governments require one party to pay taxes when buying or selling a house. Alternatively, both parties can deduct these taxes from settlement proceeds.
To keep more cash after closing, consider all factors when deciding how much money you’ll need upfront versus later.
Are There Any Tax Implications For Selling My Home?
Selling your home may have tax consequences. Asking is crucial! As an experienced real estate agent, there are several factors:
Capital Gains Tax
Possible Property Transfer Taxes
- Provincial/federal taxes
Consult a real estate and tax accountant. They can tell you how much capital gains tax may apply to the sale proceeds.
Is There A Minimum Amount Of Time That I Am Required To Live In My Home Before I Can Sell It?
In British Columbia, Canada, there is a 1 year requirement so that the owner does not have to pay income taxes on the entire amount of the value of the home.
Conclusion
Selling a home in BC, Canada can be a daunting task. But with the right preparation and help from an experienced real estate agent, you can make the process much easier for yourself. It’s important to understand all of the costs associated with selling your home, so that you can plan accordingly. Additionally, take into account any tax implications or minimum living requirements before putting your house on the market.
In many ways, selling a home is like taking a journey – it requires careful planning and thoughtfulness throughout every step of the way. Think of each cost as a stepping stone; once crossed, it will bring you closer to reaching your ultimate goal: a successful sale!
At the end of the day, when all is said and done, selling a home in BC isn’t easy but it certainly isn’t impossible either. Now that you know what to expect going forward, I’m confident that if you put in enough hard work and dedication, you’ll be able to achieve success in no time at all!
Sources:
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax
Ready to turn your real estate dreams into reality? Contact Richard Morrison, Vancouver’s top realtor with 20+ years of experience. As a Medallion Club member and RE/MAX Hall of Fame award winning agent, he’s the expert you need on your side. Whether buying, selling, or investing, Richard’s personalized approach and deep market insights ensure a successful transaction. Reach out to Richard today at (778) 900-2235 and make your real estate journey seamless and rewarding.
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