If you google “First Time Home Buyers” there is a great deal of information readily available at your fingertips to educate you on what to expect, what you need and how to obtain your first home. Oftentimes, we focus a lot on first time home buyers but leave those same individuals to fend for themselves when it comes to First Time Selling. . Today we are focusing on those who are First Time Home Sellers.
When you were a first time home buyer, your main focus was making sure you had your down payment, fees,making sure to stay employed and ensuring that you had enough funds in your RRSP to benefit from the First time home buyer incentives. Now you want to sell your home and it’s a different ball game. Since most people are using the equity from the sale of their home to purchase a new home, as the seller you need to ensure that you calculate exactly how much this move will cost you
Now, before you go out looking for your dream home, it’s important to sit down and talk with us to ensure you understand the fees involved in selling your home and what you’re qualified for. “but , my house is worth $600,000, my mortgage is only $400,000 giving me $200,000 of equity”— it’s not that simple.
Let’s start off with your current mortgage. You can either Port that mortgage or break it. If you’re looking to port your mortgage, we need to find out if your current lender and mortgage product allows it and then we need to figure out if that’s the right move for your needs. If you are breaking your mortgage, we need to calculate the lenders fee for breaking that mortgage early. This is the first of a few extra costs you didn’t have to consider when you were a first time home buyer.
So what are those extra costs you didn’t pay as a First Time Home Buyer? Let’s break them down
Real estate fees- When you purchased your home, you never had to pay any realtor fees. Now that you are the seller, it’s your responsibility and you need to set aside those funds. Rule of thumb is 5% plus HST
Legal Fees- if you are planning on selling your home and purchasing another, you will have two sets of legal fees. One for the sale and one for the purchase.
Land transfer- Yes, you paid land transfer as a first time home buyer but you received a nice tax rebate. This time around you will have to pay the full land transfer tax.
In today’s Quick moving real estate market, it’s important to have worked out these numbers before you fall in love with a new home.
If you’re thinking of moving and you’re a first time seller give us a call. We will be sure to walk you through all the necessary steps.
Until next week I hope you all have a great one take care
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