Selling a Home: FAQs

By Sirus
26/06/2017
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Our clients have many questions when it comes to selling their homes. We thought it would be a good idea to put together some of the most frequently asked questions, to give you an idea of what to expect when selling your home.

When should I sell my home?

Buy low, sell high. It sounds easy when you say it like that but it is almost impossible to judge when the exact best time to sell is. However, there are some general rules you can follow to find a decent time to sell your home.

Generally, the real estate market tends to be more active in the spring and fall, so you may find that you get more interest in your home during these times. However, this isn’t a fixed rule as other factors can influence things.

For example, the real estate market around Toronto was very hot from December 2016 to April 2017 but cooled a little as we moved into spring. In a case like that, selling in the winter would’ve been a better move. This means you also need to take into consideration other factors that can affect demand and prices, such as interest rate changes, new government measures etc.

What should I do with my home before putting it up for sale?

First and foremost, try to fix any outstanding issues. If there are leaky taps or creaky floorboards that need taking care of, it might be worthwhile fixing them as it could help you secure a higher sale price. If there are major issues that need resolving, you need to weigh up the cost of fixing them versus the likely drop in price if they are left as they are.

Aside from fixes, a good thing to do when listing your house is to make it as presentable as possible. This could mean painting the walls, tidying up the garden, and making the house look less cluttered. If you don’t want to do this yourself, you could look at hiring a professional stager who is experienced in presenting homes in a way that appeals to likely buyers.

Should I sell my home before buying my next home?

At the end of the day, this comes down to both your own preferences and the amounts you can afford. If you buy a new home before agreeing the sale of your current home, you may end up having to cover two mortgages if your home doesn’t sell as quickly as expected. For many people, that may be too much of a stretch and so waiting until the sale of your home has been agreed might be a more prudent option.

On the other side, if you can afford to carry two mortgages for a while, you may prefer to agree to buy a new home first. Some people find that this gives them more time and less pressure when looking at potential homes to buy.

Another important factor is how quickly your home is likely to sell. If you are in the middle of a hot market and homes are selling fast in your area, you might feel more confident in agreeing to buy before your home as sold as you expect your home to sell shortly afterwards with few complications. Be aware that this has worked out fine for many people but there are also cases where it didn’t, so there is an element of risk.

Do I need to use a real estate agent to sell my home?

In Ontario, there is no legal requirement for you to use a real estate agent to sell your home. You are free to prepare, price and market your home yourself.

However, we would strongly recommend using a licensed real estate salesperson. Here are just some of the advantages of using a licensed REALTOR®:

  • They are experts in the industry
  • They have experience with all the processes involved in selling a home
  • They are experienced negotiators so can often help you to get a higher sale price
  • They have exclusive access to MLS® – which allows your home to be marketed to a much bigger audience
  • They can save you an enormous amount of time and stress.

Selling your home is one of the biggest moments of your life and a real estate agent can help to make the whole process easier and leave you with more money at the end – even after commission is taken into account.

Can the buyer of my home change the closing date?

The closing date is generally 2-3 months after an “Agreement of Purchase and Sale” has been made firm and is agreed between the buyer and seller. The period in-between allows time for both the buyer and seller to finalise arrangements for the sale (for instance, the buyer may need to finalise financing while the seller needs to arrange new accommodation for themselves).

A buyer may ask to extend the closing date for a number of reasons, although it is often because they need more time to secure their financing. The buyer is entitled to make this request but you are under no obligation to agree to it.

However, it may not be in your interests to refuse the request. If financing is the issue and is likely to be resolved, your sale will close after a little delay. If you refuse and the buyer doesn’t close, you will likely have to relist your property and will end up waiting even longer to sell your home. There is also the potential for you to get a lower selling price when you relist, which may force you to pursue legal action against the original buyer.

I listed my house for sale but have changed my mind. Can I back out?

It depends what stage you are at. If you have completed an “Agreement of Purchase and Sale” then you are bound to complete the transaction and may face legal problems if you back out. If you have not reached that stage yet, you are welcome to change your mind and de-list your property.

Who will pay commission, me or the buyer?

In any real estate transaction, the seller pays the commission to both the buyer’s and the seller’s agents. The commission rates vary depending upon the agent and brokerage you are using, so you may want to check rates before working with an agent.

Will I make money well I sell my house?

That depends on a variety of factors. When you sell your house, there are a variety of things that you have to pay such as commission, lawyer fees, capital gains tax if the home isn’t your primary residence, and more. Therefore, you cannot simply look at the purchase price and sale price to determine if you have made a profit – instead, you must deduct your fees from the sale price to get a true total.

Because of this, even in a rising market, you might not necessarily make money if you sell your home soon after buying. However, generally speaking, because house prices eventually rise in the long term (even if there are short term dips), the longer that you hold a property for, the more likely that you will sell it for a profit.

 

Sirus
Sirus

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