Selling Your Regina Home: Understanding the Expenses

Selling Your Regina Home: A Clear Look at the Costs Involved

Last week, we discussed how your relationship status can impact your homeownership in Regina. This week, we're shifting our focus to the other side of the real estate coin: selling your home. Many sellers, even those who have been through the process before, can be surprised by the various expenses involved. Understanding these costs upfront is crucial for accurate financial planning and a smooth transaction.

What are the Common Expenses for Sellers?

While buyers bear the responsibility for registration costs, sellers have their own set of expenses. The most common costs you can expect when selling your home in Regina include:

1. Real Estate Commissions: This is typically the largest expense for sellers. The commission is paid to your real estate agent (and often the buyer's agent) for their services in marketing your home, negotiating offers, and facilitating the sale. Commission rates are usually a percentage of the sale price and are agreed upon in your listing agreement.
2. Mortgage Penalties or Discharge Fees: If you have an existing mortgage on your property, you may incur penalties or discharge fees when you pay off your mortgage early due to the sale. These fees vary depending on your mortgage terms and lender. It's wise to contact your lender early in the selling process to understand any potential costs.
3. Property Tax Adjustments: Similar to buyers, sellers will also have property tax adjustments at closing. If you've paid property taxes beyond your possession date, the buyer will reimburse you for their share. Conversely, if taxes are due before your possession date and you haven't paid them, your lawyer will ensure these are accounted for in the final adjustments.
4. Legal Fees: You will need a real estate lawyer to handle the legal aspects of your sale, including preparing documents, reviewing contracts, and ensuring a proper transfer of title. While generally less than buyer's legal fees, these are still a significant expenses.
5. Repairs and Renovations: Depending on the condition of your home and the current market, you might choose to invest in repairs or minor renovations to enhance your home's appeal and maximize its sale price. While not always mandatory, these can be strategic expenses.
6. Staging Costs: Professional home staging can help your property stand out and attract more buyers. This can involve renting furniture, decluttering, and depersonalizing your space.

Are GST and PST Payable on Real Estate Services?

Yes, in Saskatchewan, both the Goods and Services Tax (GST) and Provincial Sales Tax (PST) are payable on most services related to your real estate transaction. This includes:

• Real Estate Commissions: The commission paid to your real estate agent will be subject to both GST and PST.
• Legal Fees: The fees charged by your real estate lawyer will also have GST and PST applied.
• Other Professional Services: Any other professional services you engage, such as home staging, professional photography, or appraisal services, will likely be subject to these taxes.

It's important to factor these taxes into your overall budget, as they can add a significant amount to your selling costs.

Are Legal Fees Paid from Sale Proceeds?

In most cases, yes, your legal fees and other closing costs are typically paid directly from the proceeds of your home sale. This is a common practice that simplifies the financial aspect of selling your home. Your real estate lawyer will receive the sale proceeds, deduct their fees and any other agreed-upon expenses (like outstanding mortgage amounts or property tax adjustments), and then disburse the remaining balance to you.

This means you generally don't need to have cash on hand to pay your lawyer at the time of closing, provided there are sufficient proceeds from the sale to cover all costs. Your lawyer will provide a detailed statement of adjustments, outlining all the financial transactions involved in your sale.

Understanding these expenses is a crucial step in preparing to sell your home in Regina. By being informed, you can make confident decisions and ensure a successful and financially sound sale.