Selling a house in Ontario usually costs about 5% to 8% of the sale price, and the real estate agent’s commission makes up most of that. On a $900,000 home, that works out to roughly $45,000 to $72,000. Your own number depends on your commission rate, your mortgage, and how much you spend getting the home ready.
Here’s a worked example. Say you sell a $900,000 home with a 4% commission, HST on that commission, legal fees, and a $5,000 mortgage penalty. Your selling costs come to $47,180. After you pay off a $450,000 mortgage, you walk away with an estimated $403,620. The table below shows each line. It’s an illustration, so your own numbers will differ.
Worked Example: Net Proceeds on a $900,000 Sale
This is a hypothetical example to show the math. Your commission rate, legal fees, penalty and adjustments will differ.
| Item | Amount |
|---|---|
| Sale price | $900,000 |
| Commission (example rate of 4%) | -$36,000 |
| HST on commission (13%) | -$4,680 |
| Legal fees and disbursements, including HST (example) | -$1,500 |
| Mortgage balance paid out | -$450,000 |
| Prepayment penalty (example) | -$5,000 |
| Property tax adjustment credit | +$800 |
| Estimated net proceeds | $403,620 |
Selling costs here total $47,180 before the adjustment credit. Commission and its HST make up about 86% of that, and the penalty is the next largest item.
Most of these costs come out of your sale proceeds on closing day, so you don’t write a cheque for them. The exceptions are the costs you pay before you list, like staging and repairs. Let’s go through each cost.
The agent’s commission
Commission is the biggest expense. In Ontario, commissions are negotiable, and the total typically runs from 4% to 5% of the sale price, plus 13% HST. The percentage covers both your agent and the buyer’s agent, and the HST goes on top. HST applies to the agent’s commission, but not to the purchase price of a resale home.
Because commission is negotiable, ask your agent what it includes, such as photos, marketing, and open houses, before you sign a listing agreement.
Your lawyer’s fees
You need a lawyer to sell a home in Ontario. Your lawyer reviews the agreement, deals with the buyer’s lawyer, arranges your mortgage payout, receives the closing funds, and delivers your proceeds.
Fees vary from lawyer to lawyer, so ask for a quote early. At Darr Law, a standard sale with one mortgage payout is $999 plus HST and disbursements. Disbursements are the out-of-pocket costs, like title searches and registration charges. Condo sales and non-standard closings can involve additional fees, and we confirm those before we start.
Your mortgage costs
If you have a mortgage, you pay it off from the sale proceeds. That can bring two costs:
A discharge fee. This is what your lender charges to release the mortgage from title. Sources commonly place it between $200 and $400.
A prepayment penalty. If you sell before your mortgage term ends, your lender may charge a penalty. For sellers with an active mortgage, this is typically the biggest hidden cost. It can run from a few thousand dollars to much more on some mortgages.
Ask your lender for the exact payout number as soon as you think about selling, so the penalty doesn’t surprise you.
Getting the home ready
This cost is optional, but most sellers spend something on it: cleaning, small repairs, painting, professional photos, and staging. One source lists staging at roughly $1,500 to $5,000. Spend where it counts. Fix obvious problems, and skip big renovations unless an agent shows you they’ll pay off.
Closing adjustments
Your lawyer’s statement of adjustments splits costs like property tax and condo fees between you and the buyer. Sometimes the adjustment is in your favour, and sometimes you owe money. Ask your lawyer to show you the final number a few days before closing.
Moving costs
Add the cost of moving, storage, and any overlap between your old and new homes. Sellers often forget this one.
Costs you don’t pay as the seller
Land transfer tax. The buyer pays it, not you.
HST on the sale price. It doesn’t apply to resale homes.
Capital gains tax
If the home was your principal residence, you generally don’t pay tax on the gain. If it was a rental, a second property, or a home you didn’t live in the whole time, you may owe tax on the profit. Talk to an accountant before you sell, and ask what you must report on your tax return.
Extra costs for condo sellers
If you’re selling a condo, expect a few more items. You may want to order the status certificate before you list, so buyers can review it right away. Condo sales also involve more legal work, which is why they can cost more than a standard sale.
How to keep costs down
Negotiate the commission and ask what it includes.
Get your payout figure early so the penalty doesn’t surprise you.
Spend wisely on prep. Focus on cleaning, repairs, and photos.
Get a legal quote before you list, and ask what’s included in the flat fee.
Ask your lawyer to estimate your net proceeds before you accept an offer.
The bottom line
The cost of selling comes down to a handful of items: commission, legal fees, mortgage costs, and getting the home ready. When you add them up before you list, you know what you’ll walk away with, and nothing surprises you on closing day.
Thinking of selling your home? Contact us for a clear flat-fee quote before you list.