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Do Sellers Pay Closing Costs? Here’s What You Need to Know
Selling a home is often celebrated as the moment when your investment finally pays off. But before you can pop the champagne, there’s one important financial hurdle to address: closing costs. Many homeowners wonder, “Closing costs when selling a house? Aren’t those just for buyers?” The truth is, sellers have their own share of expenses, and they can add up faster than you think.
If you’re planning to sell a property—especially in a high-demand market like Mississauga—you’ll want to understand exactly what these costs include, how much you’ll need to set aside, and how to prepare. Unfortunately, most guides stop at the basics and leave out critical nuances that could affect your bottom line.
We will break down what closing costs sellers are responsible for, how they differ from buyers’ costs, and the often-overlooked fees that could catch you off guard. Plus, if you’re looking to sell your house fast in Mississauga, we’ll show you how to do it efficiently while minimizing costs.
What Are Closing Costs for Sellers?
Closing costs for sellers refer to the out-of-pocket expenses that must be paid when the home sale is finalized. While buyers typically shoulder the bulk of transaction-related costs (like land transfer taxes and home inspections), sellers pay for everything related to preparing the home, marketing, legal compliance, and commissions.
In Canada, the average seller’s closing costs range between 4% and 6% of the sale price, primarily due to the real estate agent’s commission. For example, on a $950,000 Mississauga home, you could be paying between $38,000 and $57,000 in total closing expenses (Canadian Real Estate Association, 2024).
Let’s break it down.
Major Closing Costs Paid by Sellers
1. Real Estate Agent Commission
This is typically the largest closing cost. In Ontario, the standard commission rate is 5% of the final sale price, split between the listing and buyer’s agents.
- On a $950,000 sale, expect to pay around $47,500.
- This fee is plus HST, which brings your total to roughly $53,675.
However, commissions are negotiable. Some sellers opt for discount brokerages, but this may affect how quickly your home sells or how aggressively it’s marketed. If speed and exposure are priorities, it’s worth partnering with a Sell My House Fast Mississauga expert who knows the local market inside and out.
2. Legal Fees
Sellers are responsible for hiring a real estate lawyer to discharge the mortgage, draft the deed of transfer, and ensure compliance. Legal fees in Ontario typically range from $800 to $1,500, depending on the complexity of the transaction.
3. Mortgage Discharge or Prepayment Penalty
If you’re paying off your mortgage early, your lender may charge:
- Three months’ interest, or
- An Interest Rate Differential (IRD) fee, whichever is higher.
On a remaining mortgage balance of $400,000, this could mean $3,000–$6,000 or more. Always check with your lender before listing your home.
4. Property Tax and Utility Adjustments
If you’ve prepaid property taxes or utilities, you may be entitled to a reimbursement from the buyer, or owe a small adjustment if payments are due. These are minor but should be included in your budget—expect a few hundred dollars depending on timing.
Often Overlooked Seller Expenses
Many sellers don’t plan for these lesser—known but—important costs:
1. Staging and Pre-Sale Repairs
To command top dollar and attract quick offers, staging is key. According to the Real Estate Staging Association, staged homes sell 73% faster than unstaged ones. In Mississauga, professional staging can cost $1,500–$5,000, depending on the size of the home and number of rooms.
Small repairs like fixing drywall, updating hardware, or applying a fresh coat of paint can add another $1,000–$3,000.
2. Home Inspection (Pre-Listing)
Though buyers often perform their own inspection, a pre-listing inspection can give you an edge in competitive markets by identifying issues in advance. This typically costs $300–$600.
3. Status Certificate (For Condos)
If you’re selling a condo, you must provide a status certificate for buyer review. This document confirms the condo corporation’s financial health, pending litigation, and any fees owed. It costs $100–$150 in Ontario.
4. Moving Costs
Whether you’re downsizing, relocating, or transitioning to a rental, you’ll need to budget for moving. Hiring a professional mover in Mississauga can cost $1,000–$3,000, depending on distance and volume.
Closing Costs When Selling a House: Who Pays What?
Let’s clarify the roles of buyers and sellers in the transaction:
| Cost | Buyer Pays | Seller Pays |
| Land Transfer Tax | ✅ | ❌ |
| Legal Fees | ✅ | ✅ |
| Realtor Commission | ❌ | ✅ |
| Mortgage Discharge | ❌ | ✅ |
| Appraisal/Inspection | ✅ | ❌ (optional pre-inspection) |
| Title Insurance | ✅ | ❌ |
| Condo Status Certificate | ❌ | ✅ |
| Pre-Sale Repairs/Staging | ❌ | ✅ |
Understanding these roles helps you prepare your budget and avoid last-minute surprises.
Are Seller Closing Costs Tax-Deductible in Canada?
In most cases, closing costs related to your principal residence are not tax-deductible. However, if you’re selling a rental or investment property, some expenses like legal fees, real estate commissions, and repairs may be deductible against capital gains.
Speak to a tax advisor to determine what applies to your situation, especially if you’re selling a duplex, triplex, or an income-generating Mississauga property.
What Happens If You Can’t Afford Closing Costs?
If you’re facing tight cash flow or negative equity, you still have options:
- Negotiate lower commissions with your listing agent.
- Delay the closing date to save for additional expenses.
- Use proceeds from the sale to cover closing costs at settlement.
- Use a service like Sell My House Fast Mississauga to expedite the sale and reduce carrying costs like mortgage, property taxes, and utilities.
Quick sale services not only help reduce closing time but also eliminate many of the typical pre-sale expenses like staging and repairs.
Why Mississauga Sellers Need to Plan Ahead
Mississauga is one of the hottest real estate markets in the GTA, with the average home sitting on the market for just 20–25 days in spring 2025 (TRREB). But speed doesn’t eliminate the need for financial preparation. With closing costs potentially eating into your equity, planning ensures that you walk away with the profit you deserve.
That’s where we come in. At Mississauga Homes, we specialize in guiding sellers through every stage of the process—from prepping your home for sale to navigating the paperwork, all while helping you keep more money in your pocket.
Final Thoughts
Selling a home comes with a unique set of closing costs, many of which are misunderstood or overlooked. From agent commissions and legal fees to mortgage discharge penalties and staging, these expenses can significantly affect your final proceeds. The key is to budget ahead, understand what you’re responsible for, and work with experienced professionals who can minimize unnecessary costs and maximize your return.
Ready to Sell Your Mississauga Home?
Whether you’re upsizing, downsizing, or relocating, understanding your seller closing costs is crucial to making smart financial decisions. At Mississauga Home’s Sell My House Fast Mississauga experts, we help homeowners close faster, easier, and with fewer surprises. Our experts provide local market insight, proven selling strategies, and a streamlined experience. Don’t let unexpected fees catch you off guard—sell smarter with our trusted team. Contact us today to get your free home evaluation and start your journey to a fast and profitable sale.
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