The Real Cost of Selling a House in Ontario

The listing price on a for sale sign is rarely what a seller walks away with. Between realtor commissions, legal fees, mortgage penalties, and the costs of prepping a home for market, the total gap between the sale price and the deposit that lands in your account is usually 6% to 10% of the sale. Here is exactly where the money goes.

Realtor commissions in Ontario

Commission is the largest single cost for most sellers. The standard in Ontario is 5% of the sale price plus HST, split roughly evenly between the listing agent's brokerage and the buyer's agent's brokerage. Some brokerages advertise 3.5% or 4% total, and some offer mere-posting or discount models, but full-service listings remain the norm.

On a $700,000 sale, a 5% commission is $35,000, plus 13% HST on that commission, which adds another $4,550. Total: $39,550. That is money that comes off the top before the mortgage is paid.

Legal fees

You need a real estate lawyer to close a sale in Ontario. They review the agreement, discharge the mortgage, handle the trust deposit, and register the transfer of title. Legal fees for a straightforward sale typically run $1,000 to $2,000 all-in, including disbursements and HST. Complications like severances, easements, or estate sales push the number higher.

Mortgage discharge and prepayment penalties

There is a small administrative fee to discharge your mortgage, usually $200 to $400. The bigger number is the prepayment penalty if you break a fixed-rate mortgage before the end of the term. Banks calculate this using either three months of interest or the Interest Rate Differential (IRD), whichever is higher.

With today's rates, three months of interest on a $500,000 mortgage at 5% is roughly $6,250. IRD on the same loan can range from a few thousand dollars to well over $10,000 depending on how much time is left on the term and the rate at which you originally locked in. If you have a variable-rate mortgage, the penalty is almost always just three months of interest.

Repairs, staging, and pre-listing costs

Homes that show well sell for more. That is true, but the prep work has a price tag.

• Pre-listing repairs: Paint, minor drywall, dated fixtures, a fresh coat of exterior touch-ups. Modest budgets start around $2,000 and rise fast if there are bigger items like roofing, windows, or bathrooms.
• Cleaning: A deep clean and window wash before photos, $400 to $800. Recurring cleans between showings, another $150 to $300 each.
• Staging: Light staging with a consultation and a few pieces, $500 to $1,500. Full staging of a vacant home, $3,000 to $6,000 for a two-month rental.
• Photography: Often included by the listing agent. If not, professional photos and floor plans run $300 to $700, drone shots and video another $300 to $500.
• Inspection or pre-listing report: Optional but sometimes worth it in a slow market, $500 to $800.

Carrying costs while the home is listed

Ontario homes take an average of 20 to 45 days to sell in most markets, and longer when demand cools. During that window, you are still paying the mortgage, property taxes, insurance, utilities, and any condo fees. On a typical $700,000 home with a $500,000 mortgage, that is easily $2,500 to $3,500 per month just to hold the property.

Vacant homes carry an extra cost: most insurers require a vacancy rider or higher premium after 30 days, and some coverage is reduced. If the property has already sat empty for a while, factor that in before you list.

Taxes on the sale

Ontario's headline seller-side taxes are simpler than most people think.

• HST: Does not apply to the sale of a used residential home. It does apply to the commission and legal fees.
• Land transfer tax: Paid by the buyer, not the seller, in Ontario.
• Capital gains tax: Exempt on your principal residence. Investment properties and second homes are subject to capital gains on 50% of the gain, taxed at your marginal rate.
• Non-resident sellers: Owe a withholding tax and need a Section 116 clearance certificate from CRA. Talk to an accountant before closing.

A sample $600,000 sale, side by side

Here is what a typical Ontario sale looks like when you list traditionally versus sell directly. Numbers use rough averages, so your situation will differ, but the shape is representative.

This is why the higher sticker price on a traditional listing does not always leave more in your pocket. Speed, certainty, and cost avoidance can close the gap, and sometimes flip it. It also assumes the listing sells at the price you hoped for, in the time you hoped for, which does not always happen.

When listing traditionally is the right call

Listing usually wins when the home is in good shape, the market is warm, you have three or more months of runway, and you have the budget to prep and carry the property. If any of those pieces are missing, the math tightens quickly. Our full comparison of the two paths lives in Direct Sale vs. Real Estate Agent.

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