Real Estate Commission
This is usually the largest cost and is typically split between the listing and buyer agents. It is negotiable, but most Toronto sellers budget for a percentage of the sale price. Commission is paid at closing out of the proceeds, so you do not need cash up front for it. Ask your agent to explain exactly how the split works and what services are included before you sign a listing agreement.
- Negotiate the rate before listing
- Ask what marketing is included
- Confirm HST is added on top
Legal Fees and Disbursements
A real estate lawyer will handle the paperwork, discharge your existing mortgage, and make sure funds are transferred correctly. Expect a flat legal fee plus disbursements for things like title searches and courier costs. In Ontario this step is not optional, so build it into your budget early rather than treating it as an afterthought near closing day.
Mortgage Discharge and Penalties
If you are paying off your mortgage before the end of its term, your lender may charge a prepayment penalty. This can be a flat fee or calculated based on interest rate differential, and it varies a lot between lenders. Call your lender or your mortgage broker well before listing so you know the exact number and can factor it into your pricing strategy.
Moving and Staging Costs
Professional staging, cleaning, minor repairs, and the actual move all add up. Some sellers spend a modest amount on staging because it can help a home sell faster and closer to asking price, especially in a competitive Toronto market. Get a few quotes for movers early since good companies book up fast during busy seasons.
Land Transfer Tax Rebates You Might Miss
Sellers do not pay land transfer tax, but if you are buying your next home at the same time, remember that Toronto charges both a municipal and provincial land transfer tax. First time buyers may qualify for rebates on the purchase side, which can offset some of the selling costs on the other end of your move.
Frequently asked questions
- Do I have to pay tax on the sale of my Toronto home?
- If it was your principal residence for the years you owned it, the sale is generally tax free under the principal residence exemption. Talk to an accountant if you rented out part of the home or lived elsewhere for part of the ownership period.
- When are commission and legal fees actually paid?
- Both are usually deducted from the sale proceeds by your lawyer on closing day, so you rarely need to write a separate cheque for them.
- Can I estimate my net proceeds before listing?
- Yes, ask your agent for a net sheet that lists expected commission, estimated legal fees, and your mortgage payout amount so you know roughly what you will walk away with.