The Truth About What You Keep
I've had this conversation hundreds of times: a homeowner in Waterdown or Niagara-on-the-Lake receives an offer they love, mentally spends the money, and then gasps when they learn what closing costs will take away. The gap between your sale price and your net proceeds is real, and it's larger than most sellers expect.
Let me walk you through the actual numbers so you can plan properly.
Real Estate Commission: Your Biggest Line Item
This is usually the elephant in the room. Most sellers in our region—whether you're in downtown Hamilton, Oakville, Milton, or St. Catharines—pay between 4% and 5% of the sale price in total commission to both the selling agent and the buyer's agent. On a $700,000 home sale, that's $28,000 to $35,000 before tax.
Here's the part people forget: HST applies to that commission. At 13%, suddenly you're looking at an additional $3,640 to $4,550 on top. This is a genuine cost that comes directly from your proceeds.
I always recommend discussing commission structure early in our relationship. There's sometimes room to negotiate, especially if you're selling a well-positioned property in a strong market area like the Durand in Hamilton or the premium neighbourhoods around Burlington.
Legal Fees: Non-Negotiable but Predictable
Your real estate lawyer isn't optional in Ontario—the mortgage lender requires it. In my experience, legal fees for a sale in our service areas run between $1,200 and $2,000, depending on the complexity of your file and the lawyer's location.
What's included? Title search, document preparation, reviewing the Agreement of Purchase and Sale, liaising with your mortgage lender, and coordinating the discharge of your mortgage. These aren't extras; they're essential steps to transfer clear title to the buyer.
There may also be small disbursements—title insurance, land transfer tax searches, and closing adjustments—typically another $200 to $500. Always ask your lawyer for an estimate upfront.
Mortgage Discharge and Interest Penalties
If you're paying off a closed mortgage before maturity, you could face a significant penalty. In Ontario, lenders typically charge the greater of three months' interest or the Interest Rate Differential (IRD). On a $500,000 mortgage, this can easily run $5,000 to $15,000 depending on rates and how much time is left on your term.
Open mortgages have no penalty, which is why some sellers strategically move to an open rate in the final months before listing, especially in a competitive market. It's worth a conversation with your lender.
Other Costs You Might Overlook
Property tax adjustments almost always favour the buyer if you're selling mid-year. If you've paid annual taxes but only own the home for nine months, you'll likely owe a refund on the sale statement.
Home inspection repairs requested by the buyer during conditions also come from your pocket, as do any agreed-upon seller concessions—credits for repairs, upgrades, or closing costs you've negotiated to make the deal work.
Don't forget about capital gains tax if this is an investment property or if you've rented part of it. That's a conversation for your accountant, but it's important.
The Math for Your Neighbourhood
Let's say you're selling a $650,000 home in Ancaster:
- Real estate commission (4.5% + 13% HST): ~$33,000
- Legal fees and disbursements: ~$1,500
- Mortgage discharge penalty (estimated): ~$7,000
- Property tax adjustment (rough): ~$800
- Miscellaneous (inspections, discharge documents): ~$500
That's roughly $42,800 in total costs—about 6.6% of your sale price. On a $1,000,000 home in Oakville, the percentage is often similar or slightly lower because the fixed legal costs don't scale proportionally.
Plan Ahead to Avoid Surprises
The best time to understand your net proceeds is before you list, not when you're at the closing table. When you know roughly what you'll net, you can make smarter decisions about how aggressively to price, whether you can afford to make upgrades, or if you need to rent temporarily during a transition.
Every property and every situation is different. A status certificate for a condo in Burlington might add title review costs. A rural property in West Brant might have survey or environmental considerations. These variables matter.
Let's Talk Numbers for Your Home
I work with sellers across Hamilton, Halton, Niagara, and Brantford, and I've learned that clear expectations lead to smooth transactions. If you're thinking about selling—whether it's next month or next year—I'd love to walk you through what your actual proceeds might look like. No pressure, just honest math.
Give me a call at (647) 625-1415 or send me a note at jennifermelo@golfi.ca. Let's make sure you know exactly what you're working with.
