You may want to read the previous chapter on working with a real estate agent in Toronto here.
Sooner or later, your real estate agent (and visiting buyers) will want to know why you want to sell your house. What’s your reason for selling now? Sometimes, it can make buyers suspicious if you seem too anxious to get rid of your property. If you make deprecating remarks about it, they will assume something is wrong with your house and that is why you don’t want it. But even if you really haven’t enjoyed your time in your home, remember that whoever buys it may not have the same experience! Of course, you must disclose any structural problems, damage or defects, but apart from that, let the house speak for itself.
Though you may not have appreciated the narrow hallways and small backyard, this may be just perfect for a young couple starting out. If many stairs have been causing you back pains and joint pains, don’t chase away the family of athletes who run staircases up and down for exercise.
Know Your Home
Photo by Steven Martin
In order to be aware of everything in your house or condo, you need to know it like the back of your hand – and have the paperwork to back it up. It is best if you can satisfactorily document everything you tell potential buyers on the MLS listing for your home. So, before your home hits the open market, dig up the following information:
- Who is the legal owner of the property? Have title/deed paperwork on hand.
- How much is left on your mortgage (or any other home-financing deal) right now?
- If the house is mortgage-free, does it currently serve as collateral for any other loan? (If this is the case, you will have to free it up from any such claims before you can sell it.)
- How is the property’s tax value determined and what is the property tax rate in your area?
- What is the current zoning of the property on the municipal map? Will the new owner be allowed to carry out house remodelling, yard landscaping or an extension construction?
- How much is your annual insurance premium on the house and which risks are covered by the policy?
- Is property transfer tax applicable to your house? If so, how much is it going to be?
Answers to these questions may or may not be posted with the listing, but any prudent buyer will eventually want to know.
Know Your Financial Status
Photo by Yohann Aberkane
Before you make a sales pitch, be sure to know your financial status very well:
- Ask your bank whether you can forward your mortgage onto the buyer if desired by the buyer, and under what conditions. This concept is called “mortgage assumption”.
- Are there early payment penalties for premature debt repayments embedded in your contract with the bank? If so, make sure you incorporate these in the asking price.
- As we mentioned earlier, if your house is serving as collateral for any other debt (other than a mortgage), you will need to pay those debts up or replace your house with another asset. You will not be able to sell your home otherwise.
- How much cash will you need to cover closing costs? Talk with your agent to compile a complete list of costs involved in the home sale.
- Think about moving expenses and the cost of living in your new home. These figures can vary greatly on the moving distance and the city/province in which you are selling and buying your respective houses.
That’s right…you’re probably going to be a buyer, too! Selling a house usually means buying another one. Check out our home buyer’s guide for more info here.
Know Your Market
Photo by Пероша
Are people buying in your neighbourhood? Is it a popular one? How many other homes for sale similar to yours, are there in the area? Are there good schools around? Is there quality public transportation, walking paths or bicycle trails? If you are sure that buyers will appreciate your location, you can put a premium on it. Your real estate agent will be able to give you most of the information on the desirability of your neighbourhood very quickly, so that you can evaluate it objectively from a buyer’s perspective.
In some cases, you might want to (temporarily or otherwise) rent out your house instead of selling it, especially if you don’t need a lump sum for a down payment on a new home. In some cases, it might make sense to hang onto your home until there is a better time to sell it.
When to Sell – Timing
Photo by elycefeliz
Depending on your province, city and area, there may be a pattern of fluctuations in the market. This pattern might be seasonal and repeat itself every year, or it may be oscillating around some other variable. Whatever it is, your agent will likely have a pretty good idea of the local market and will help you time the sale well.
In general, people in Canada like to move during the spring, summer and fall, because the weather, travelling conditions and daylight are best suited for home-hopping during these seasons. People don’t fancy moving in or out in the frosty winter because it is not only physically more challenging, but also more risky and cumbersome. Remember, though, that most real estate transactions have a closing period of at least 30 to 90 days. That means that the most popular times to buy a home, in the Big Smoke anyhow, are traditionally in the fall and spring (with some exceptions for holidays and random factors, such as anticipated taxes or rate hikes that everyone hurries to avoid).
Don’t get too obsessed with timing, however. Especially if you are moving within the same city, you will likely buy in the same depressed or booming market in which you are selling. This correlation will offset much of your timing-related ‘gain’ or ‘loss’.
Similarly, do not delay the sale artificially, insisting on offers at or over your asking price, unless you can really afford to sit back and wait. If buyers’ offers are scarce, consider if rejecting everything out of hand is worth it; you can always make a counter-offer and with some persistence, you might be able to reach a mutually agreeable deal.
Now that you are entirely certain of your reasons for sale, it is time to work on improving the value of your home before you sell.
If you find this guide helpful and want to read about more tips, sign up and get the Pdf printable version of our Free Report on Buying and Selling Your First Home in Toronto!