How do I calculate total closing costs?
How Do I Calculate Total Closing Costs? Get the Exact Number Before You Sign
Quick answer: add up your realtor commission, lawyer fees + HST, mortgage discharge/penalty (if any), adjustments (property taxes, utilities, condo fees), repairs/staging, moving costs, and any capital gains tax if it’s not your principal residence. Below I’ll show exactly how to calculate each line, give real Milton, ON numbers, and walk you through a clear example you can copy.
Why closing costs matter in Milton, ON — and why you must calculate them now
You can list a house for $900,000 and think you’ll pocket most of it. You won’t, unless you do the math. Closing costs often shave off 6–8% (or more) of your sale price. For Milton sellers, with rising home prices and local market fees, guessing costs is expensive. Get the exact total now so you set the right expectation, price to net what you need, and avoid last‑minute surprises.
The seller closing‑cost checklist (the exact line items you must count)
- Realtor commission — the biggest single expense
- Typical range in Milton: 3% – 6% of sale price. Common full‑service rate: 4%–5%.
- Example: 5% on $900,000 = $45,000.
- Legal fees + HST
- Law firms charge flat fees or ranges. Typical: $1,000 – $2,500 plus disbursements.
- HST applies to legal services in Ontario at 13%.
- Example: $1,600 + 13% HST = $1,808 (plus disbursements).
- Mortgage payout and discharge penalty
- If you still have a mortgage, the lender charges a payout figure and might charge a breakage penalty.
- Penalty depends on your mortgage terms. Check your mortgage statement or ask your lender for a payout statement.
- Example: outstanding balance $400,000, penalty $5,000.
- Adjustments at closing (credits/debits)
- Property taxes: seller pays until closing; buyer reimburses for prepaid amounts. You either owe or receive an adjustment.
- Utilities, water, condo maintenance fees: pro‑rated adjustments.
- Example: seller owes $1,200 in unpaid property taxes to be settled at closing.
- Repairs, staging and pre‑sale costs
- Optional but common: minor repairs, painting, staging, professional photos. Range: $500 – $5,000.
- Moving costs
- Local move in Milton: $500 – $2,000 depending on size and distance.
- Long‑distance moves cost more.
- Tax implications (capital gains)
- Principal residence is usually exempt. If the property is an investment, you may owe capital gains tax. Speak to an accountant.
- Other possible costs
- Condo status certificate fee (for condo sellers): $100 – $400.
- Municipal/utility final bills, occupancy permits, lien searches, payout admin fees.
Step‑by‑step method to calculate total closing costs (use this template)
- Write down your expected sale price.
- Multiply by estimated realtor commission rate to get commission amount.
- Add legal fee estimate plus 13% HST.
- Get exact mortgage payout and penalty from lender; add that number.
- Estimate adjustments you will owe at closing (taxes, utilities, condo fees).
- Add repairs, staging, and moving estimates.
- Add any expected taxes (capital gains) or ask your accountant.
- Total everything — that’s your expected closing costs.
Now an actual example you can copy and paste.
Real example — Milton seller selling for $900,000 (numbers you can trust)
- Sale price: $900,000
- Realtor commission: 5% = $45,000
- Legal fees: $1,600 + 13% HST = $1,808 (round to $1,850 including disbursements)
- Mortgage payout + penalty: outstanding $350,000; penalty/fees = $4,000; total payout = $354,000 (this removes mortgage balance from proceeds)
- Property tax adjustment owed at closing: $1,200
- Condo status certificate: N/A (detached home) — $0
- Repairs & staging: $2,000
- Moving costs: $1,200
What matters: commissions and mortgage payoff reduce the net proceeds — they aren’t added to your ‘costs’ in the same way but they reduce what you get in your pocket.
Crunching the numbers (seller perspective):
- Gross sale: $900,000
- Minus realtor commission: –$45,000 => $855,000
- Minus legal fees: –$1,850 => $853,150
- Minus mortgage payout (removes debt): –$354,000 => $499,150 (this is now your net proceeds before adjustments)
- Minus taxes/repairs/moving: –$4,400 => $494,750
Net to seller: approx. $494,750. Total hard closing costs (commission + legal + repairs + moving + mortgage penalty): roughly $53,050 plus the mortgage balance payoff. If you want a single percent, closing costs (excluding the mortgage payoff principal) were about 6% of sale price in this example.
That’s the math. Use numbers specific to your mortgage and commission to get a precise result.
Local specifics Milton sellers must know
- Market prices in Milton are higher than the provincial average. That inflates absolute dollar closing costs (commissions are percent‑based). Always calculate against your actual list price.
- Land Transfer Tax is paid by the buyer in Ontario (no municipal LTT in Milton). Don’t include LTT in seller costs.
- Property tax adjustments matter: Milton sits in Halton Region; sometimes regional levies make adjustments non‑trivial. Pull your tax bill and give it to your lawyer early.
- Condo sellers in Milton must order a status certificate — budget $100–$400 and expect a quick turnaround.
- Mortgage penalties can be higher if you prepay or break a fixed term early — ask your lender for an exact payout figure before listing.
Ways to lower closing costs — practical, no‑nonsense moves
- Negotiate the commission. Offer a lower rate to your listing agent or structure splits to incentivize buyer agents. Even saving 0.5% on a $900,000 sale saves $4,500.
- Shop lawyers. Ask for a flat fee and get the disbursement list up front.
- Time your closing to minimize tax/utilities adjustments — your lawyer can advise how date affects prorations.
- Avoid unnecessary repairs. If a repair won’t materially change offers, consider reducing price instead of spending $3,000.
- Get multiple moving quotes and book off‑peak days.
- If you have a mortgage, call your lender early and consider whether waiting until term maturity reduces penalties.
How to build a seller’s closing cost worksheet (copy this into a spreadsheet)
Columns: Item | Estimated Cost | Actual Cost | Notes
Rows:
- Sale price
- Realtor commission (%) and $
- Legal fees + HST
- Mortgage payout + penalty
- Property tax adjustment
- Condo status certificate
- Repairs / improvements
- Staging & photography
- Moving costs
- Other
- Estimated net proceeds (Sale price minus all costs)
Fill estimated numbers, then replace with actuals once you have invoices and payout statements.
Why work with a local expert who knows Milton numbers
Numbers matter. Every Milton neighbourhood, from Old Milton to new subdivisions, sells differently. A local pro who knows typical commission splits, typical repair costs, and has relationships with reliable movers and talented lawyers will save you time and money. That’s not hype — it’s math.
Want me to run your exact closing cost estimate? Send your sale price, current mortgage balance, and preferred commission rate. I’ll send a customized worksheet that shows exactly what you’ll net and where you can save.
Contact: Tony Sousa — local Milton realtor and closing/moving specialist. Email: tony@sousasells.ca | Phone: 416‑477‑2620 | https://www.sousasells.ca
FAQ — Common closing‑cost questions for Milton home sellers
Q: Who pays Land Transfer Tax when selling a home in Milton?
A: The buyer pays Land Transfer Tax. Ontario’s provincial LTT and any municipal LTT (Toronto only) are buyer charges. You, the seller, do not pay LTT at closing.
Q: What percentage should I budget for realtor commission?
A: Budget 4%–5% as a baseline. Commission is a percentage of sale price and negotiable. Even a 0.5% reduction on a high price is real cash in your pocket.
Q: How much are legal fees in Milton?
A: Expect $1,000 – $2,500 plus HST and disbursements. Ask for a written estimate and the likely disbursements list (title search, courier fees, registration, etc.).
Q: Do sellers pay HST on closing costs?
A: HST (13% in Ontario) applies to certain services like legal fees, staging services, and moving companies. It does not apply to the realtor commission (real estate commissions are exempt from HST in many cases, but other services are taxable). Confirm with your lawyer.
Q: Will I owe capital gains tax when I sell my Milton house?
A: If the home was your principal residence for every year you owned it, you likely qualify for the principal residence exemption and owe no capital gains tax. If the property was an investment or rented out for any period, you may owe capital gains tax. Consult an accountant.
Q: When are closing costs paid?
A: Many costs are deducted from the sale proceeds at closing by your lawyer (commission, legal fees, mortgage payout). Some costs you pay earlier (staging, repairs, moving deposits).
Q: What’s the biggest mistake sellers make when calculating closing costs?
A: Ignoring mortgage penalties and not getting a payout statement before listing. That surprise wipes out planned proceeds. Also, underestimating commission or skipping legal fee HST.
Q: How can I get a precise estimate for my property in Milton?
A: Provide your expected sale price, current mortgage balance, and whether the property is a condo. A local realtor or closing specialist can produce a tailored worksheet with exact numbers.
Sell smart. Know the numbers before you list. If you want a fast, accurate closing cost worksheet for your Milton property sent to your inbox, email Tony at tony@sousasells.ca or call 416‑477‑2620. Local help reduces surprises and puts more cash in your pocket.
