Something that often comes as a surprise for many home sellers is that they have to pay out some money upon the closing of the sale of the house. These are known as the closing fees. In some cases, they can be quite substantial and can come as a shock to the home seller.

What Fees Do You Have to Pay When Selling a House?

There are different categories of costs that are going to arise when selling a home such as,

  • The indirect costs for getting the home ready for the sale
  • The realtor costs
  • Additional  closing costs

What are Typical Closing Costs for Seller?



The real estate lawyer for the seller has to be sure that any bills that could be levied against the house are paid upon closing, which includes

  • Outstanding taxes on the home.
  • Any property taxes that are due on the home up to the date of closing have to be paid. If the seller has prepaid any of these taxes, then that portion will get applied to the new homeowner.
  • Payout of any existing mortgages
  • Any mortgages that are on the home have to be cleared before the new owner takes over the home.
  • Real Estate Fees
  • Real estate fees can vary in each province, but typically in Ontario, they range from 2.5% to 5%. These will be paid out to the realtor on closing day by the seller’s lawyer. They are taken from the funds that the buyer produces according to the sale agreement.
  • Lawyers Fees
  • The lawyer’s fees will vary depending on how complex the sale is and how much work the lawyer has to do. Included in the lawyer’s fees will be costs related to each of the transactions. For example, faxing, phone calls, payments etc. Then there are the costs for the lawyers time for reviewing all of the documents related to the sale like the purchase and sale agreement, and whatever additional documents may be necessary such as the mortgage documents for example.

Hidden Costs When Selling Your Home



The hidden costs when selling a home are usually those costs determined by the seller’s lawyer as they pertain to different things that need to be done to close the sale of the house legally. They may not apply to every house sale, but they are ones that the home seller should be prepared for in the event they are needed. These include;

Title Search of the property

The seller’s lawyer will do a title search of the property to make sure there are no liens against it. If there were, then these would have to be discharged before the sale of the house would be legal. In this case, the costs for this would be taken out of the money paid by the buyer upon closing.

Discharge of the mortgage

If there is a mortgage on the house, this has to be cleared before the buyer takes possession of the home. But, there can be extra fees attached to this such as the penalties for discharging the mortgage before the mortgage contract is up.

Utility bill readings as of date closing

As the current homeowner you are responsible for paying any of the utilities up to the date of closing. If you have prepaid any of these, they will be deducted from the costs.

Fuel  top-up

The home seller is expected to top up the fuel for the home but will receive reimbursement from the seller during the lawyer’s transactions.


For some of the expenditures that the lawyer has to pay out on behalf of the seller, there will be GST which can be substantial on some of the transactions.

Who Pays the Closing Costs on a Home Sale?

Both the buyer and the seller will have some closing costs that they are responsible for. As a seller, your real estate lawyer will make sure that all your responsibilities as the seller are met. The buyer’s lawyer will be responsible for what the buyer is obligated to pay for.

Can I Deduct the Closing Costs From the Sale of My Home?

If you are selling your principal residence, then you will not be able to deduct the closing costs from the sale of your home. But, at the same time, you will not have to pay capital gains on it either. That is if you meet the exemptions.

Indirect Costs of Selling a Home



There are some additional costs that can arise during the process of selling a home. Quite often there are some steps that need to be taken to get the home ready for a sale, and these cost money. Some examples are;

  • Minor repair costs such as painting and decorating
  • Garden and maintenance costs
  • Cleaning services to remove junk

All of these costs add up, but the majority of them will be deducted from the funds that your lawyer as the seller will receive on the day of closing from the buyer. Once all the costs and fees have been disbursed then the lawyer will release the balance of the funds to you. Once all the financial transactions have taken place the keys are released to the new owner.

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