Equity is the net worth that you have in your property.
In general, it will be the amount of the cheque your lawyer will provide to you when the transaction is complete.
In most cases, it is difficult to calculate the exact amount of equity because of uncertainties as to the balance of mortgage owing, the status of any mortgage tax account, the amount of delay at land titles, and so on.
The Typical Items to consider are listed below:
Legal Fees
A fee of approx. $850.00 for a standard residential house transaction (other than new home sales)
Disbursements
These items are costs which the seller of a house must pay but which, for reasons of convenience, the lawyer pays on behalf of the seller at the appropriate time and then is reimbursed by the seller.
These include mortgage discharge fees payable to land titles, title investigation charges, couriers, and other miscellaneous charges all of which generally range from $100.00 to $150.00 depending on the specific transaction.
Mortgage Discharge Fee
There will be a discharge fee to pay to the lender and the average amount is $300.00
Mortgage
It goes without saying that the balance of money you owe under your mortgage will reduce your equity. Don't forget to include any mortgage penality. Unless your mortgage is at the end of term or is an "open" mortgage, you may have to pay a penalty to the lender to have it discharged.
Usually, if you are purchasing another house and are using the same mortgage lender the penalty is waived.
Property Taxes
The tax period for a titled property is always the calendar year, however, in Winnipeg, taxes are due as of June 30th. In all transactions, either the buyer or the seller pays the annual tax bill.
The paying party is then reimbursed by the other party by way of an adjustment to the sale price.
Final Water Bill
An outstanding water bill is the only utility that can be added to the property's taxes, therefor the final water bill on the property is paid by the lawyer from the sale proceeds.
GST
Gst is payable on the real estate commission, Legal Fees, and most disbursements
Interest
You may receive interest for the duration of the land title delay, on the sale proceeds, or part of the sale proceeds. The interest that you will earn is hard to estimate and will depend on the amount of any mortgage the purchaser is getting on the property.
