Your sale price isn’t what lands in your bank account. Between the firm deal and closing day, a handful of costs come off the top. Most are predictable if you plan for them early. This guide walks through each one for sellers in Peterborough, the Kawarthas and the surrounding townships, so you can estimate what you’ll actually walk away with.
1. Real estate commission, plus HST
Commission is the largest selling cost for most people. In Ontario it is negotiable, and it’s set out in writing in your listing agreement before your home goes on the market. HST at 13% is added on top of the commission.
When you compare agents, compare what the commission includes, not just the number: photography, video, floor plans, staging advice, how the home will be marketed, and who handles negotiations and the paperwork to closing.
2. Legal fees
You’ll need a real estate lawyer to close the sale. Their account includes their fee plus disbursements (things like registration, courier and searches) and HST. Fees vary from firm to firm, so ask two or three lawyers for a written quote before you list.
3. Paying off your mortgage
Your lawyer pays off your mortgage from the sale proceeds. Two costs can come with it:
- A discharge fee charged by your lender to remove the mortgage from title, usually a few hundred dollars.
- A prepayment penalty if you’re breaking your mortgage before the end of its term. On a variable-rate mortgage this is often about three months’ interest. On a fixed rate it can be much higher, because lenders may use an interest rate differential calculation.
Call your lender early and ask for a payout estimate. If you’re buying again, ask whether you can port your mortgage to the new home, which can reduce or avoid the penalty.
4. Adjustments on closing day
Property taxes, and sometimes utilities or fuel left in the tank, are split between you and the buyer as of the closing date. If you’ve prepaid taxes past closing, you’ll get money back. If you’re behind, the difference comes out of your proceeds. Your lawyer shows all of this on the statement of adjustments.
5. Getting the home ready
These costs are optional, but they often pay for themselves in a stronger sale price:
- Small repairs and touch-up painting
- A deep clean, including windows and carpets
- Staging, or renting a few key pieces of furniture
- A pre-listing home inspection, so there are no surprises when the buyer inspects
- Storage for extra furniture and belongings while you’re showing
6. Rural, cottage and waterfront extras
Buyers of rural and waterfront properties around the Kawarthas usually make their offers conditional on the water and septic. You can make that smoother by having a recent water test, any septic pump-out and inspection records, and your survey ready to share. If you don’t have an up-to-date survey, ask your lawyer whether you’ll need one.
7. Moving
Get quotes from movers early, especially for spring and summer closings and month-end dates, which book up first. If your sale and purchase don’t close on the same day, budget for a short-term rental or storage, or talk to your lender about bridge financing.
8. Tax on a cottage or investment property
Selling your principal residence is generally tax-free in Canada. Selling a cottage, rental or other property that isn’t your principal residence can trigger capital gains tax. If that applies to you, speak with your accountant before you list, not after you sell.
What sellers don’t pay
In Ontario, land transfer tax is paid by the buyer, not the seller. There is no municipal land transfer tax in Peterborough or the surrounding townships.
Estimate your net proceeds
Start with your expected sale price and subtract: commission plus HST, legal fees, your mortgage payout (including any penalty and discharge fee), adjustments, and the costs of preparing and moving. What’s left is roughly what you’ll have for your next home.
The two numbers that matter most are your likely sale price and your mortgage payout. Our free home evaluation gives you the first; your lender can give you the second. Then we’ll sit down and work through the rest with you, line by line.
About this guide: written by McAuley Real Estate Group, a team at Bowes & Cocks Limited, Brokerage in Peterborough, Ontario. It’s general information, not legal, tax or financial advice. Confirm the figures for your situation with your lawyer, lender and accountant. Questions? Call or text 705-559-6116 or book a time to talk.
