Closing Costs For Sellers

So your closing day has finally arrived, and you can't wait to get your hands on that cheque that's coming your way. But before that happens you have to deduct closing costs from the money thats owed to you. Closing costs are fees owed on or by closing day that must be paid to complete the sale of your home. Some common closing costs are listed below to give you a general idea of what to expect.

Your Realtor's Commission - This fee covers all the legwork, marketing and advice provided by your Realtor, as well as commission to the buyer's Realtor (the seller pays both). Commission fees are usually around 5% of the home's sale price, but they may be negotiated.

Legal Fees and Disbursements - Dealing with such a large financial transaction requires a legal professional to make sure everything is in order. Your lawyer will make sure that the buyer has followed through with all the terms outlined in the Offer to Purchase, and that you have met your legal obligations so the deal can close. Legal fees will vary from lawyer to lawyer and will also depend on what services are being provided. You are also repsonsible for paying for disbursements - any costs related to handling your file, such as long distance calls, photocopies, courier service, travel, etc.

Utility and Property Tax Adjustments - This might not necessarily be a cost for you - it will depend on how your property tax and utility bill payments are scheduled. If you prepay these expenses then the buyer will have to refund you the difference by closing day. But if you don't pay these expenses in advance, you will have to pay the buyer for the amount accumulated prior to the possession date. Your lawyer will calculate the exact amounts.

Mortgage Prepayment or Discharge Fees - If you plan to pay off your mortgage with the proceeds from your home sale, your bank may charge a fee for closing your account and a penalty fee if you've paid it off early.

Moving Expenses - Be sure to put money aside for costs associated with moving - moving company, utility hookups, storage, packing boxes, etc.

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