Do you want to sell your home?
Are you ready for a change? Do you need more space or a better location for work or recreation? These are just some of the reasons why Canadians move every 5 to 7 years, according to CMHC. Learn more about the selling process and ways to maximize your strengths while minimizing risks.
Related page: Find out how a good real estate agent can protect your interests.
Selling a home can be relatively simple and stress-free if you’re prepared. Making the decision to move is the just the first step in a process. Gathering documents and searching for a new home will take time so it’s important to start early. You may need to do some repairs to your home and some staging, inside and out, to attract the best possible offer.
Home seller’s guide
- Ask yourself why you’re selling
- Time your sale to the local market
- Decide who will sell your home
- Do essential home improvements
- Price your home competitively
- Stage your home to attract the highest offer
- Market and advertise your listing
- Be prepared for issues at closing
- Move out
- Fulfill closing obligations
1. Ask yourself why you are selling
To avoid ‘seller regret’, examine the reasons why you want to sell. The process to sell is somewhat time-consuming and moving can be expensive. Make sure it’s what you really want before engaging with the process. It might be helpful to write down why you want to sell with the reason on one side and a potential fix to the problem that would possibly compel you to stay. Maybe a light renovation would address your dissatisfaction. For example:
Problem: need more space for office work
Solution: build a laneway office
Finances play a key role in deciding to sell. It’s not uncommon for home owners to discover that they cannot afford to repurchase in a rapidly rising market or that their income hasn’t kept pace with the cost of housing. To avoid disappointment, make an appointment with your bank manager or mortgage broker to look at what you can afford. Apply for a loan ‘pre-approval’ to reduce the risk of not being able to get financing after you sell.
List your ‘must-haves’ in order to sell. Price is the most common requirement. What is the minimum price you will accept? Do you need to have an accepted offer on another house before you’re willing to sell?
2. Time your sale to the local market
Your local real estate market may be in a seller or buyer phase. A buyer’s market means there are a lot of other homes on the market that buyers can choose from. It usually puts downward pressure on housing so that sellers may be forced to accept a lower price if they are motivated to sell. A seller’s market has fewer homes for sale which results in higher selling prices and fewer days on market. A balanced market usually means your home will sell in 30 to 90 days for approximately 95% of asking price.
The housing market has seasonal fluctuations that are timed with macro events like school registration and Christmas holidays. Spring is traditionally the beginning of the real estate season with a lull in the summer before picking up again in the fall. The goal for most buyers is to be in their new school registration zone before September and to be able to move before the holidays.
December to February is typically a slow period for a number of reasons. Buyers like to see what is under the snow before making an offer. Home inspections are more difficult, uncertainty is higher, and buyers generally consider winter to be a riskier time to purchase. Condo buyers don’t have the same issues which leaves the condo market unaffected during this time.
Ultimately, the best time to sell is when you’re ready. Contact a local real estate agent to help you determine your home’s selling price, the ideal month, and to give an estimate of how long it will take to sell your home in current market conditions.
3. Decide who will sell your home
The vast marjority of Canadians use a real estate agent to sell their home. Just 10% of sellers in North America tried to sell their own home (which is called “for sale by owner” or “FSBO”). Another 10% tried to sell their own home but eventually engaged a sales agent or broker for assistance.
The most common mistakes of FSBO sellers are underpricing followed by a lack of legal expertise. A real estate agent has the training, skills, and carries errors and omissions insurance in case something needs to be addressed later. They have access to the latest data that gives you a distinct advantage. Some younger sellers are called “do some yourself, or DSIY. They like to get involved and help with pricing, staging, photography, and social media announcements. It’s true, real estate sales can be fun and DSIY allows you to be part of the selling process while leaving the legal and marketing to a professional.
If you plan to sell FSBO
- Allocate time to do it properly— this is why real estate agents work full time
- Research and be confident in your pricing strategy
- Be willing to show your home when it’s convenient for the buyer
- Be prepared for difficult negotiation tactics from professional agents
If you plan to hire a sales representative
- Ask for referrals from past clients
- Interview sales representatives to ensure a good fit
- Don’t hesitate to negotiate the commission
- Trust your real estate agent
4. Do essential home improvements
Most buyers and investors choose move-in ready homes whenever possible. Moving can be hectic and the logistics of painting and replacing flooring adds to the upfront cost and hassle. Nobody wants to move their nice furniture into a home that needs work. Prepare your home so it is a clean, blank slate for the new owner. Your real estate agent can be a big help in identifying the items that should be on your to-do list. Here are a few tips for home improvements.
Have your home pre-inspected: A buyer’s real estate agent is always looking for ways to reduce risk and increase their client’s satisfaction. A pre-inspection removes the anxiety associated with the question, “Are there hidden deficiencies?” A pre-inspection allows you to address any repairs or upgrades that might be needed before it is listed on MLS.
Some popular improvements: Improvements fall into two categories: popular features found in new homes and updates to items that show wear-and-tear. New homes generally have stainless steel appliances and rock countertops. A digital thermostat and undersink water filter are welcome additions to any home Investors and builders know that a blank canvas will sell or rent a home faster which is why ceilings should be bright white with warm-white walls. Carpets should be steam cleaned or replaced. Cleaning, paint, and flooring usually have a positive cash return for sellers and/or a shorter time on market.
Curb appeal sells homes: A quick search online for “before and after curb appeal” will result in many examples of homes that have benefitted from aesthetic upgrades. Depending on your market, curb appeal may be limited to pressure washing and some container plants or light construction of a portico, for example.
Sell as-is: Homes that need improvement spend more time on market and sell for less money. However, if your circumstances don’t allow you to make improvements, selling as-is will limit your out-of-pocket costs. Be prepared for wholesale price offers from investors and flippers.
5. Price your home competitively
According to research by Zillow, 57% of homes sell at or above the listing price within the first week. After two weeks, that figure drops to 50% and trends downward. With many buyers watching the MLS, a home that is on the market for awhile may be seen as overpriced or in need of updates. If your sales agent has priced “ahead of a hot market”, it may be worth waiting for the right offer. To sell your home for the maximum price, a real estate agent will calculate a fair asking price using data from the MLS system.
Research comparable homes: Homes that are comparable are located in the same neighbourhood, have the same number of rooms, share similar features, etc. Make allowances for more or fewer features and space compared to your home. A quick way to gauge price is to search for homes like yours in the same area.
Professional appraisal: This is the preferred method if you’re selling your own home. You can ask the appraiser to give you a price that takes into account market conditions for the next three to six months. This way, you’re not underpricing for the market.
Ask a real estate agent: Brokers have access to a number of databases including property tax and past sales so they’re in the best position to give you an accurate listing price. They may have some suggestions for a pricing strategy that will attract more offers or sell your home more quickly.
6. Stage your home to attract the highest offer
Staging is the process of making your home ready for sale that includes decorating to capture the interest of potential buyers. Many buyers will compare your home with new builds and it’s possible to attain a higher selling price if the property is comparable in terms of colour, curb appeal, and basic features. Here are some tips to help get you started:
- Pack and store offsite all items that you do not require for daily living to make the space seem larger
- Deep clean thoroughly for a guaranteed return on investment
- Make needed repairs and cosmetic updates
- Employ a professional stager for empty properties to sell them faster
7. Market and advertise your listing
Professional real estate agents will market a home using several methods at the same time, especially if they are complimentary to each other. A listing on MLS can provide many benefits. Ask a real estate agent about a “mere MLS listing” for DIY marketing without having to pay a sales commission.
- Professional photography and drone videos will make your home stand out
- A well-considered description can stir the imagination of a buyer
- Multi-channel advertising includes an online listing, yard signage, and social media posts
- Prepare and sign property disclosure statements (as required by law)
8. Be prepared for issues at closing
Problems can arise during the due diligence or closing process that may need to be addressed before the buyer is willing to finalize the transaction. Your real estate agent can guide you through the closing process. Here are some common issues that are potential deal-breakers:
- Problems with the home inspection that can make the purchase not viable at the negotiated price
- Bank appraisal is too low causing the financing to fall short of what is needed
- Buyer is unable to obtain financing due to a weak application
- Other clauses that may have been included in the offer to purchase may not meet the standard set by the buyer
9. Move out
Moving is expensive and time-consuming. You may find it practical to begin packing before your home goes on the market. The more work you can do in advance, the less hurried and stressful moving day will be for the entire family.
- In the offer to purchase, consider a moving day mid-month to avoid the month-end rush to rent a truck
- Arrange some overlap in move-in/out dates to allow for cleaning and updates to your new home
- Set a realistic budget for moving costs and obtain quotes for a van and movers if you cannot DIY
- Be prepared to move within 30 days if the buyer makes an offer you cannot refuse
10. The weeks before closing day
Closing refers to the transaction day or the day when the accounts between the buyer and seller are settled and the money is exchanged. It’s also known as the date of exchange. It is not always the day you must move. Usually, there are a few days extra included in the sales agreement to allow the seller time to prepare the home for the buyer. However, your obligations as a seller must be met by closing day:
- Confirm that your down payment is available in cash (it can take two weeks to withdraw money from an RRSP or TFSA)
- Complete repairs and other promises to the buyer
- Invite the buyer to revisit the home to confirm it is in the same condition as the last viewing
- Make an appointment with the lawyer to deliver outstanding monies in the form of a cashier’s cheque (no personal cheques allowed)
- Hand over the keys to the new owner after the exchange has been confirmed
Your lawyer will arrange for the transfer of deed, pay off any debts attached to the title and outstanding mortgage, and issue a cheque for the balance.