Transaction Costs for a Real Estate Seller

When making a great decision we always have to take into consideration many important factors; among them one of the first is always the cost of making this new decision. If you are thinking of, or have already decided, to sell your property; we want to inform you about all the transaction costs that this new process will include for you as a seller. At NATIVU we are well informed about every aspect for the sale of a real estate property before, during and after the entire process, we’ll explain next:

Costs before the transaction

Sales Preparation

This first cost is of great importance because it covers the conditioning of the property for sale. This would fix what is damaged, paint what is already worn and keep the house presentable. An example of this would be if you are going to sell a lot, you will have to cut the grass and maintain it so that it looks presentable and thus sell it. If this is not done it is likely that it will be punished in the negotiation if it reaches this, because even in the first visit you can see repercussions of not fixing the property since the client could lose.

Costs to Offer Free Property

This cost is not only that of the mortgage; In reality, if a property has some kind of lien or is in a trust these obligations must be eliminated before the real estate can be sold. Usually this can be a cost that the owner does not foresee because trusts have a set of rules under which the property can be released and this can extend the sale process. Other costs of offering free property could also be land and municipal taxes, outstanding condominium fees, or corporate taxes.

Legal Advice

This cost depends on the needs you have as an owner and are separate from the transaction costs. For example, if you need legal advice on legal processes, review the sales contract or others; This cost is separate from the transaction and must be fully covered by you.

Costs during the transfer

Transfer Costs

The cost of transfer can be negotiable between the two parties. The law does not stipulate who must cover these expenses, only that the costs must be covered. These include: stamps (approx. 1.3%), transfer tax (1.5%), fees (staggered 1-2%), and escrow (0.25% or from $400) and so on. It is customary for the buyer to cover these expenses, but they are fully negotiable between the two parties and can influence other aspects of the transaction. That is, a buyer can make an offer with a more aggressive price but covers the transaction costs completely, so it all depends on the negotiation.

Costs after the transaction

Real Estate Advisory Commission

The value of a real estate agent is very large, as it can determine the course of the sale of your property. An advisor knows the state and type of market, how to navigate it, how to handle a potential client, what to do to sell your home, etc. This advice is invaluable, and facilitates the entire transaction process for you as an owner. The commission will be determined by said advisor and his company, in addition to which VAT must be paid. This cost is non-negotiable, especially the legal cost.

Capital Gains Tax

This cost is non-negotiable and falls directly to the owner. The capital gain payment should not be paid if the property sold is the primary residence. If the real estate sold was a piece of land that the owner does not prove was his primary residence during the last years, then this tax must be payed. This cost can be 2.5% of what remains in the books of the transaction or 15% of the profit.

Lateral Costs

Generally these costs are not financial or legal, but maintenance and other eventualities. For example, the cost of maintaining a home (keeping it presentable), utility cancellation costs, or moving costs.