By Cesia Green
Most people are aware that they will have some extra costs when they buy a new or resale condo. However, there are also some important costs to keep in mind if you are selling a condo.
The condo closing document will typically include these four components:
Adjustments
If you are selling near the beginning of a tax installment period, you may receive an adjustment back from the buyer. If, instead, you are selling near the end of a tax installment period, you may have to give money to the buyer. It all depends on whether you have paid for more or fewer days than you have owned the condo on the day of closing. Your lawyer will be able to tell you this. You will also have to adjust for condo fees. The closer you close to the beginning of the month, the more of a reimbursement you will get.
Fees and disbursements
Most residential real estate lawyers will charge a flat fee (plus HST) for their services. In addition, there are fees for disbursements – items that your lawyer paid for on your behalf, which you must reimburse your lawyer for. On a sale, there are generally few disbursements, but there will be some and you can often get an estimate on disbursements from your lawyer.
Registration fees
These are government fees charged on the transfer of property. Registrations are $71.30 each, for the transfer of title and the registration of the buyer’s mortgage, and are almost always paid by the buyer. However, you will have to pay a registration fee to discharge your mortgage. Sometimes this is included in the fee paid to your lender, but sometimes it has to be paid separately. Again, your lawyer will be able to let you know this.
Real estate commission
This is applicable only if you used the services of a Realtor in the sale of your condo. This must be paid out of your sale proceeds before you receive any money out of the deal.
Additional Considerations
Although you won’t find this outlined in your condo closing documents, you’ll want to be sure to factor in some moving costs, especially if you plan to move at a busy time of year.
It is important to properly budget for selling your condo beyond the actual purchase price. While generally there is sufficient money to cover closing costs out of the sale price, it can be very distressing to realize that you don’t have quite enough to close.
Hints & Tips: You should speak with your lawyer early on to determine exactly how much you can expect to receive out of your sale so that you know whether you need to set aside a buffer in order to be able to close.
Cesia Green is a partner at Wall-Armstrong & Green (www.wall-arm.ca) in Barrie, where she practices in the areas of residential real estate, estate planning and estate administration for clients in Barrie and the Greater Toronto Area. You can read the real/estate blog at www.wallarmstrong.wordpress.com or follow Cesia at twitter.com/cesiagreen.
