The Selling Process

1. Decide when to sell;  In real estate, timing can influence your home’s selling price. Factors like how quickly you need to sell, whether it’s a buyers or sellers market and seasonality all play a role in your home’s final selling price

2. Sign a Listing Agreement;  This authorizes your Real Estate Agent and their brokerage to market and sell your home. It will define the legal relationship between you and the real estate brokerage and also set a time limit for your agent to sell your home.

3. Determine your home’s asking price; The right asking price will attract buyers and pay you a maximum return. Setting too low a price means you could miss out on thousands of dollars. Setting too high a price will scare away buyers. Your goal is to find fair market value.

4. Add some specialists to your team Similar to when you bought your home, it’s essential to have a notary public or a lawyer handle all the various documents that change hands and make sure your best interests are being protected at all times.

5. Prepare your home for sale First impressions matter. Now is the time to see your home through a buyer’s eyes: get ride of the clutter, clean and repair as much as you can, within reason. Remember, weigh the cost of all your improvements versus the potential financial return.

6. Let your agent do what they do best. Your home has never looked so good and now it’s time for your agent to market it to potential buyers. This happens with a “For Sale” sign, open houses, newspaper ads, a listing on the MLS®, the internet, and, of course, through your agent’ relationship with other REALTORS®.

7. Prepare your finances Will the buyer “assume” your mortgage or are you “discharging” it? If you’re buying a new home, is your mortgage “portable”? What taxes are involved? These are important questions to ask your agent, your mortgage lender and your notary public or lawyer.

8. Receive an offer; Although your agent will walk you through the process, be prepared for some stress. You will see every offer since it’s required that your agent show you every offer that’s submitted. You will have three options: you can accept, you can reject or you can “sign back” or “counter”. Ask your agent what these terms mean. Happy negotiating!

9. Close the deal. You were successful and have drafted a legally binding agreement. Are you done? Not quite yet. Contact your lawyer or notary public, contact your lending institution and consult your agent. Immediately start satisfying any conditions of the agreement that require action on your part. On closing day, your lawyer or notary public will finalize all the details and give you a cheque for the net proceeds.

 

Selling Costs

The seller of a property is responsible for the following costs:

• Lawyer or Notary Fees and Expenses
  Includes attending to the execution of documents and discharging of any encumbrances.

• Pre-Payment Penalties
  In Canada, a mortgage is for a fixed term usually between 6 months and 5 years. There are penalties to selling the property before the term of the mortgage is up and are usually the greater of three months’ interest or the interest rate differential.

• Goods and Services Tax (GST)
  The GST is a 5% tax that, in the case of a vendor, applies to the commission fee and other services related to the sale.

• Adjustments for Ownership
  This may include taxes and/or strata fees.

• Capital Gains Tax
  The rate of the Capital Gain tax is 33.33% of the ‘gain’ on investment properties. To determine the adjusted cost base in calculating capital gain, Revenue Canada allows for the following:

  • Property Transfer Tax

  • Legal fees and disbursements associated with the purchase

  • Furnishings and renovations included in the selling price

  • A portion of the interest on mortgage payments

  • GST fees associated with the purchase

  • Revenue Canada does not allow any deductions from the selling price in determining the gain. However, by filing a Canadian tax return with Revenue Canada after the sale, some of the tax paid may be recovered.

• ​