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10-Step Guide to Selling Your Home¶

Step 1: Decide When to Sell¶

Seller's market When lots of people are looking for homes but not many are for sale.

Buyer's market When there are lots of homes for sale and not many people buying them.

Seasonality This refers to the fact winter sales tend to be slower in most markets while spring sales typically speed up.

Step 2: Managing Your Money¶

Before the offers start rolling in, be prepared for the large amounts of money that will pass through your hands. However, don't forget to take these things into consideration:

Discharge mortgage¶

This refers to using the proceeds from the sale of your home to discharge or pay off your current mortgage. In an open mortgage, you can pay it all off without any penalties. If you have a closed mortgage, be prepared to pay a penalty.

Portable mortgage¶

A portable mortgage means you can take your mortgage money with you and buy a new home, without penalty.

Capital gains tax¶

If you had tenants living in part of your home, such as the basement, you'll pay capital gains tax on a portion of your profits. You may also owe capital gains tax if you're selling a vacation or investment property.

Always consult a professional financial advisor before making personal financial decisions.

Step 3: Get a REALTOR Right for You.¶

Don't simply go with the first REALTOR who suggests the highest asking price. Ask around, talk to a few, and you'll soon find the one that's right for you. Meet a REALTOR today.

Work with a REALTOR You Know Well¶

Sticking with a REALTOR you know well makes sense. If your REALTOR did a good job helping you buy your home, he or she is probably a good candidate for helping you sell it.

Sticking with a Local REALTOR¶

Write down the names and numbers of REALTORS on for sale signs. Ask friends or family to recommend a REALTOR. Visit one of the local real estate offices in your area.

Step 4: Prepare Your Home for Sale.¶

Here are all the little things you can do to attract the big offers.

Get rid of the clutter¶

Your house will feel a lot bigger and more inviting when you get rid of all the non-essential stuff lying around your house. Clear out those closets, remove bulky, unused furniture and rearrange the remaining pieces to make the best use of space. Fight your inner-pack rat at every turn. If you haven't used something in the past year, toss it, donate it to charity or sell it in a yard sale.

Clean everything¶

Cleaning is the single most cost effective way to make your home more attractive to buyers. Floors, windows, walls, doors, baseboards...everything! Give extra care and attention to the two most important rooms in a buyer's mind: bathrooms and kitchens. Once it's clean, keep it clean! You never know what day your ideal buyer will visit.

Repair as much as you can, within reason¶

During your "home tour" identify anything that's broken, half-finished or simply doesn't work. Fix all the little things like leaky faucets, doors that squeak or that don't close properly and small cracks in the ceiling.

Some repairs are absolutely vital, like a leaky roof or basement. Nothing kills a sale faster than signs of water damage. If there's an unsafe electrical problem you must fix this too, for the good of the sale and the buyer's safety (not to mention your own).

Depersonalize your home¶

Remember, you want buyers to walk through your house and feel like it's their home, not yours! People just don't have good visual imagination. They won't see past your cluttered wall of family portraits, your collection of curling trophies or your 'eccentric' home decor. These things are guaranteed to prevent buyers from emotionally placing themselves in your home. Remove everything that's too much about you, and ask your REALTOR for help deciding.

Never underestimate the power of paint¶

Strong colours on the walls or wild wallpaper make it hard for buyers to imagine their furniture in your house. Consider repainting your home in bright, neutral colours that will enhance a room's size and look more inviting. Next to cleaning your home, paint is the most cost-effective way to increase your home's appeal, and attract offers.

Add some beautifying touches¶

Replacing tattered old curtains with some fresh draperies may make a world of difference. Mirrors on the wall will help rooms feel far bigger. A few new houseplants will add undeniable appeal. Pay special attention to the outside of your home. Trim the trees, weed the garden and consider planting a few new flowers. Your home needs to make a great first impression with some serious "curb appeal." You don't need to spend a fortune to make a big difference.

Weighing the cost of improvements vs. the potential return¶

Painting, minor repairs and modest landscaping work are prime examples of improvements that really pay. ***

Step 5: Sign a Listing Agreement.¶

The "Listing Agreement" authorizes your REALTOR and their brokerage to market and sell your home. This agreement serves three purposes.

defines your relationship. Every detail of your work together, including the limits of your REALTORS authority, will be clearly defined.
provides detailed information about the home. This information can then be placed on the board's Multiple Listing Service, to help potential buyers find you.
forms the basis for drafting offers on your home. Any formal offer on your home starts with the Listing Agreement.

Step 6: Determine Your Home's Asking Price.¶

Lots of people out there want to buy your home. The right asking price will attract buyers' attention, and pay you a maximum return.

Your goal is fair market value¶

Market Value is a term that simply means the maximum amount of money that interested buyers are willing to pay for your property. Remember, buyers comparison shop, especially for something as expensive as a home.

Say no to too low price¶

Setting too low a price means you could miss out on thousands of dollars that some buyer would have happily paid.

Say no to too high price¶

Setting too high a price can scare away willing buyers and leave your home on the market for too long. When you lower the price, people may assume you are under pressure to sell, and lower their offers even further.

Your REALYORS understands what's happening in your local market as well as industry trends that may impact how you sell your house. They use the extensive background information available exclusively to them, REALYORS can compare your home to a collection of similar homes recently sold in your area.

Step 7: Marketing Your Home.¶

You've spruced up your home and it's never looked better. It's time for your REALTOR to do their thing.

The For Sale Sign¶

Despite our leaps in technology, the for sale sign continues to be an effective way to advertise. Anybody responding to your sign is a solid lead because they've seen your home with their own eyes.

Traditional media¶

Your REALTOR may choose any or all the following: classified ads in the newspaper, ads in real estate publications as well as a flyer.

The power of the Internet¶

If you decide to have your home listed on a real estate board's MLS System, you can also have your home advertised on REALTOR.ca, Canada's most popular and trusted real estate website.

Open house for REALTORS¶

A REALTOR open house is an efficient way to attract REALTORS to see your home with their own eyes. If your home is perfect for one of their buyers, you can be sure they'll rush right out and tell them.

Open House for Buyers¶

Many buyers want to get a feel for your neighourhood before they start working with a REALTOR. That's why Open Houses to the public are so important. They usually last a few hours on a Saturday or Sunday.

Step 8: Add a Lawyer to Your Team.¶

Similar to when you bought your home, it's essential to have a lawyer handle all the various legal documents that change hands.

When selling, it's essential to have a lawyer handle all the various legal documents that change hands. Your REALTOR can also give you the name(s) of experienced real estate lawyers in your area. Your lawyer will review important documents that require your signature. The most critical of these is the "offer" submitted by the buyer.

Step 9: Deal an Offer.¶

You won't know exactly how much it's paid off until you see the offer. This is an exciting, often emotional time, so be prepared.

Your REALTOR will walk you through the process. You'll see every offer. It's required that your REALTOR show you every offer that's submitted. They'll call for an appointment, usually at your home, to discuss the offer.

Firm Offer to Purchase¶

Usually preferable to the seller, you, as it means the buyer is prepared to purchase the home without any conditions.

Conditional Offer to Purchase¶

Usually means there are one or more conditions on the purchase, such as "subject to home inspection", "subject to financing", etc. The home is not sold unless all the conditions have been met.

Acceptance of Offer¶

An Offer to Purchase is presented to you the seller who may choose to accept the offer, reject it, or submit a counter-offer. The counter-offer may be in regards to the price, closing date, or any number of other variables. Offers can go back and forth until both parties have arrived at an agreement or either side ends the negotiations.

Three Options when Responding to an Offer¶

Accept the offer You got the price you were hoping for, maybe even more! The closing date looks good and there are no fussy conditions. Sold!
Reject the offer This offer isn't even close.
sign back the offer This offer is close, but something's not quite right. Now the delicate art of negotiation begins, by "signing back".

The Art of Counter-Offers and Negotiation¶

A successful negotiation is one that leaves both you and the buyer feeling satisfied with the outcome. This is a highly emotional time.

Step 10: Close the Deal.¶

Your negotiations were successful and you have a legally binding agreement. But, is the house truly sold? Not quite yet. It's time for the vital final steps known as "closing".

REALTOR and Lawyer do the most¶

Thank goodness. Closing a deal involves many, many complicated and time-consuming legal maneuvers. That's why you've hired pros.

YOUR CLOSING CHECKLIST¶

You still have plenty to do yourself, and here's a comprehensive list.
Contact your lawyer and notify them that an Agreement has been signed. Make sure they're ready to close the transaction.
Immediately begin satisfying any conditions of the agreement that require action on your part. They have definitive dates for completion and failure to do so can result in a lot of hassles, or even spoil the whole deal.
Notify your lawyer and lending institution if the buyer is assuming your mortgage.
Contact the utilities, telephone and cable companies about transfer or removal of service. Note: Your lawyer will often handle the transfer of utilities.
Call your insurance agent and arrange cancellation or transfer of your homeowner's insurance. If the home you are selling will be vacant for more than 2 or 3 days, make sure your insurance company is notified.
Contact a moving company to arrange your move on or prior to the closing date.
Send out your change of address notices and advise the post office. Notify the Ministry of Transportation about your new address for driver's license and registration.
Notify your REALTOR immediately if anything changes about your property or your situation.

Contact With Your Lawyer¶

Mortgage: If you plan to "discharge" or pay off your mortgage with proceeds of the sale, your lawyer will obtain a statement from your lender showing your outstanding balance on the mortgage, and any penalties you'll have to pay to discharge the mortgage.

A few days before closing, your lawyer will ask you to sign the paperwork that enables the title to be transferred to the buyer.

On closing day, your lawyer will receive and distribute the proceeds from the sale, pay off your mortgage and other costs, and give you a cheque for the net proceeds.

Source: OREA (Ontario Real Estate Association)