The Mortgage Market Has Likely Peaked—What That Means for Sellers

It looks like we’ve finally hit the peak of the mortgage rate cycle. Many economists and industry experts are expecting the Bank of Canada (BoC) to start cutting rates this year. That means the typical five-year fixed mortgage rate could slide closer to 4%, down from the 6% range we’ve seen over the past several months.

For homeowners thinking about making a move—whether upgrading to a bigger place or cashing in on equity—this could be the opportunity you’ve been waiting for. But before you throw up a "For Sale" sign, it’s important to understand the real costs involved in selling your home. Beyond just the price tag on your next place, there are several hidden expenses that can catch sellers off guard.

Let’s break them down so you can plan ahead and maximize your home sale.

Hidden Costs of Selling Your Home

1. Legal Fees

A real estate lawyer is a must when selling your home. They handle key paperwork, like transferring the property to the buyer and discharging your mortgage. Legal fees can range from $500 to $2,000, so be sure to budget for it.

2. Real Estate Agent Fees

Sure, you could try selling on your own to save on commission—but working with a great real estate agent typically pays off in a higher sale price (and a much smoother process). Agent commissions are usually around 4–6% of the sale price, but keep in mind that even if you sell privately, you’ll likely still need to pay the buyer’s agent.

3. Mortgage Penalties

Depending on your mortgage terms, you might face:

• Mortgage Discharge Fees: A one-time cost to close out your mortgage, ranging from $0 to $400.
• Mortgage Prepayment Penalty: If you’re breaking your mortgage early, this can be a hefty expense—typically about three months’ worth of interest, or more if you have a fixed-rate mortgage.

4. Home Staging & Professional Photography

In today’s market, presentation is everything. Buyers form first impressions online, so high-quality photos and staging can make a world of difference. Depending on the size of your home and how much staging is needed, this can cost anywhere from a few hundred to several thousand dollars.

5. Repairs & Maintenance

A little TLC before listing your home can go a long way in boosting your sale price. Deep cleaning, fresh paint, minor repairs, and curb appeal upgrades can all help your home shine. Costs vary depending on the condition of your home, but even small touch-ups can make a big impact.

6. Moving Costs

Moving isn’t cheap, whether you hire professional movers (which can easily run into the thousands) or handle it yourself. Factor in costs like truck rentals, packing supplies, cleaning fees, and utility deposits.

7. Home Inspection

Most buyers will request a home inspection, and if issues come up—like plumbing, electrical, or foundation problems—you may need to cover repair costs or negotiate a lower sale price. Some sellers opt for a pre-listing home inspection to catch potential red flags early and present a more transparent listing to buyers.

The Bottom Line

The real estate market has been on a roller coaster these past few years, and while things are stabilizing, selling still comes with its fair share of costs. A good rule of thumb? Budget an extra 5–7% of your home’s sale price for these expenses so there are no surprises.

Thinking about making a move? Let’s chat. I’ll help you navigate the process, get top dollar for your home, in a timeframe that suites your needs and make sure you’re prepared for every step. Reach out anytime!

If you're navigating this dynamic market, whether buying or selling, let's talk strategy. Our team can guide you through the most efficient processes, aiming to save you time, money, and hassle. Contact us today and let's make your real estate journey a success!

Source: RE/MAX CA