House Selling-Canada

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  • Real estate commission in Canada generally is higher than it is in the UK.
  • There is no standard real estate commission across the country, and the commission is negotiable.
  • 7% commission on the first C$100,000 of the sale price and 3% commission on the balance of the sale price seems to be the widely accepted starting point for negotiations.
  • Several forum members report that they've negotiated commissions in the 4% - 5% range on the first C$100,000 and less than 3% on the balance.
  • The seller pays all of the commission, although the commission actually is split between the seller's and buyer's realtors.
  • Canadian realtors provide a high level of service in return for these commissions.
  • In addition to that, closing costs (e.g., legal fees) are lower in Canada than they are in the UK, so the overall cost of selling a house to some extent balances out.
  • Nonetheless, because Canadian real estate commissions generally are quite high, you might have to swallow the cost of the real estate commission if you turned around and sold your house within a year or two. (If you'd stayed in your house long enough for its price to appreciate, the capital gain might be large enough to compensate for the real estate commission. Alternatively, in a few economic hot spots in Canada, where real estate prices sometimes have shot up, the appreciation in real estate prices sometimes has compensated the house "flipper" for the real estate commission expenses he/she has incurred when he/she has sold a recently purchased house.)
  • Unless you're in a booming real estate market, in which you're expecting meteoric rises in house prices, there's a risk to your wallet if you buy a house and then sell it again in a hurry, say, within a year or two. That's because the value of the house may not have risen enough to compensate for the real estate commission you'll be paying.
  • If you are new to an area, there is a lot of merit in renting for a year or so, while you learn about the neighbourhoods and amenities in your city, and indeed while you confirm that that is the right Canadian city for you.
  • When you come to sell your house, you do have the For Sale By Owner option.
  • Taking the FSBO route may seem attractive, but you may find that it's not all it's cracked up to be, for the following reasons:
    • You may end up spending quite a bit of money advertising your house (not as much as you would have spent on a real estate commission, but more than you might have anticipated).
    • The details of your house are not plugged into the Multiple Listing Service (MLS) system, so you deny yourself a terrific way of spreading information about your house.
    • Buyers know that you're not going to be paying real estate commissions, so you'll probably find that they expect you to discount your price accordingly.
    • The advice of a knowledgeable real estate salesperson often can result in your getting a price that is higher than the one you could have secured on your own.
    • It's a lot more work to do for yourself the tasks that a real estate salesperson and his/her support team do on your behalf.
  • To find out about the costs that you incur when you buy a house in Canada (aside from the purchase price of the house itself), please see the BE Wiki article called Housing.