Essential Information About Closing Costs for Home Sellers in Regina

Understanding Closing Costs When Selling Your Home

Selling a home in Regina is certainly a thrilling experience, but there are expenses that may come as a surprise. Imagine sitting at the closing table, expecting to net a substantial profit, only to watch thousands of dollars siphoned off for various costs. Those are closing costs, and if you’re not prepared, they can significantly reduce your proceeds.

This post breaks down the typical costs sellers in Regina face, why these costs exist, and how you can keep more of your money when selling your home.

What Are Closing Costs?

Closing costs are the expenses you incur to finalize the sale of your home. These include everything from commissions to title transfers and legal fees. On average, sellers in Regina should expect to pay about 6% to 10% of the home’s sale price in closing costs.

Understanding these expenses ahead of time helps in planning and avoiding last-minute surprises.

The Most Common Closing Costs for Home Sellers

1. Real Estate Agent Fees

Real estate commissions are typically the largest expense. These fees are split between the listing agent and the buyer’s agent.

How much do commissions cost?

• The common structure in Saskatchewan is 6% on the first $100,000 of the sale price and 3% on the balance, shared between the two agents.

Why do sellers pay commission?

• Agents manage pricing strategy, marketing, showings, negotiations, paperwork, and closing coordination.
• Example: On a $400,000 home, total commission would be $15,000.

2. Land Transfer Tax

In Regina and the surrounding area, the land transfer tax is a fee for legally transferring the property title.

• How much does the land transfer tax cost? The amount varies but generally ranges from 0.5% to 2% of the sale price.
• Who pays these taxes? In Saskatchewan, the cost is usually covered by the seller, but the specifics can be negotiated in the sale agreement.

3. Title Insurance (Owner’s Policy)

Title insurance protects the buyer from ownership disputes or legal claims on the property. While the buyer typically purchases their policy, many sellers in Regina opt to pay for the owner's policy as part of the deal.

• Is title insurance mandatory? No, but it’s often expected in a home sale.
• Cost: Usually between 0.5% and 1% of the home’s sale price.

4. Legal Fees

In Saskatchewan, it’s customary to hire a real estate lawyer to review and finalize the sale.

• Cost: Typically ranges from $500 to $1,500.
• What do they do?
• Review contracts and closing documents.
• Ensure all aspects of the transaction are legally sound.

5. Adjustments for Property Taxes

Since property taxes are paid annually, you'll need to cover your share up to the closing date.

• How is it calculated? The total property tax bill is divided based on the number of days you owned the home during the year.
• Example: If property taxes are $6,000 annually and you sell halfway through the year, you owe $3,000 in prorated taxes.

6. Homeowners Association (HOA) Fees

If your property is part of an HOA, expect some extra costs at closing.

• Unpaid dues: Any outstanding HOA fees must be cleared before closing.
• Transfer fees: Some HOAs charge $200 to $1,000 just for processing the ownership change.

How to Reduce Your Closing Costs

Closing costs can take a sizable chunk out of your home sale profits, but the good news is that there are ways to cut back on these expenses. Whether through negotiation, strategic choices, or finding cost-effective service providers, you have options to keep more money in your pocket.

1. Sell Without an Agent (FSBO)

For Sale By Owner (FSBO) means no listing agent commission.

However, you’ll still need to:

• Pay the buyer’s agent commission (usually 2% to 2.5%)
• Handle marketing, negotiations, and legal steps yourself
• FSBO is best for experienced sellers or if you already have a buyer.

2. Ask the Buyer to Cover Some Costs

In competitive markets, buyers may agree to cover certain fees instead of negotiating a lower sale price. This isn’t common in Canada but can be considered.

3. Shop Around for Legal and Financial Services

Compare quotes for lawyers, movers, and staging services. Some law firms offer flat-fee packages that can save you hundreds.

Preparing for Closing

As you approach the finish line of your home sale, there are still a few final steps to take before closing day. Proper preparation can help avoid last-minute surprises and ensure everything goes smoothly.

1. Review the Statement of Adjustments Early

Canadian sellers receive a Statement of Adjustments outlining final costs and credits. Review it carefully with your lawyer.

2. Finalize Repairs and Disclosures

Complete any agreed-upon repairs. Make sure all taxes, fees, and outstanding balances are paid.

Final Thoughts

Selling a home involves more than just finding a buyer. Closing costs can add up quickly, but by understanding what to expect and planning ahead, you can retain more of your profit.