Before listing a property, one question almost always comes up: how much will I actually walk away with? The cost of selling property Montreal owners face goes well beyond the broker’s commission, and some items catch sellers off guard when they haven’t planned for them.
In 16 years as a broker in Montreal’s Southwest, I’ve seen many sellers discover these costs at the last minute. Here is a clear, general overview, so you can plan your sale with the right numbers in mind.
A breakdown of the costs of selling a property in Montreal
Every file is different, but these are the main items most sellers need to consider.
The broker’s commission
This is usually the largest expense. The commission is freely negotiated between the seller and their broker, and it reflects the services included: marketing strategy, photography, showings, negotiation, and follow-up through to signing. Applicable taxes (GST and QST) are added on top.The mortgage penalty and discharge fees
If you sell before the end of your mortgage term, your lender may charge a prepayment penalty. It varies widely depending on the type of loan (fixed or variable rate) and the institution. Some lenders also charge a fee to discharge the mortgage. A quick call to your lender before listing gives you a precise figure.The certificate of location
Sellers generally need to provide a certificate of location that matches the property’s current condition. If yours is too old, or if work has been done since, a new one has to be ordered from a land surveyor.(See also: Documents to sell property Montreal: the full list)
Notary fees
In most transactions, the buyer chooses the notary and pays the fees for the deed of sale. The seller can still have some notarial costs tied to their own file, such as discharging a mortgage. Your notary can confirm what applies to your situation.Tax and condo fee adjustments
At closing, municipal and school taxes (and condo fees, if applicable) are split between seller and buyer based on the possession date. Depending on when you paid your bills, you may receive a refund or owe an adjustment.Preparation costs
Professional photos, staging, and small repairs are optional, but they often help a property sell faster and closer to the asking price.The costs people often forget
Beyond transaction fees, other expenses slip into a seller’s budget:
- Moving costs, sometimes including temporary storage
- Overlapping housing costs, if your move-out date doesn’t line up perfectly with your next purchase
- Capital gains tax, in some cases: the gain on the sale of a principal residence is generally exempt, but that isn’t automatic for a rental plex, a secondary property, or mixed use. An accountant can confirm your situation.
How to estimate what you’ll have left after the sale
To estimate the cost of selling property Montreal sellers should plan for, and your net proceeds, a simple method works:
1-Start with a realistic selling price for your property (See also: How much is my property worth in Montreal?)
2-Subtract your remaining mortgage balance
3-Subtract the mortgage penalty, if there is one
4-Subtract the commission and applicable taxes
5-Subtract other costs (certificate of location, preparation, adjustments)
The result gives you a good idea of the net amount available for your next project. I prepare this calculation with my clients before listing, so they can make decisions with the full picture.
Can you reduce your selling costs?
Some costs are fixed, but several choices influence the final bill:
- Preparing your file early avoids delays and unpleasant surprises once an offer is accepted
- Pricing correctly from the start shortens time on market and limits successive price drops
- Comparing offers beyond price, since conditions and the possession date also carry value (See also: Accept first offer property: what should you do?)
If you want to see every step of a sale at a glance, my complete guide to selling in the Southwest walks through them all.
Frequently asked questions about the costs of selling a property
When is the broker’s commission paid?
It’s generally deducted from the sale proceeds at closing with the notary. The exact terms are set out in the brokerage contract you sign.Who pays the notary in a real estate sale?
Usually, the buyer chooses the notary and pays the fees for the deed of sale. The seller may have occasional notarial costs, for example to discharge a mortgage.Do I have to pay tax on the sale of my property?
For a principal residence, the gain is generally exempt from tax in Canada. That isn’t the case in every situation (rental plex, secondary property). Check with an accountant to confirm your file.Want to know the cost of selling property Montreal owners like you face, and what you’ll have left after the sale?
Contact me today, and I’ll prepare a personalized estimate of your net proceeds with you.