You’ve decided to sell your home. Whether you’re a first-time seller or it’s been a while since your last sale, the process can feel overwhelming. This guide on selling a home offers essential steps and insights to help you confidently navigate key requirements for a successful sale.
When selling a home, many sellers wonder about the logistics surrounding closing day and post-sale responsibilities. Common questions include:
In addition to the sale process itself, home sellers often need to deal with financial and administrative aspects related to the sale. These questions are essential for getting everything in order:
To ensure a smooth process, it’s important to start planning early. We’ll try to answer these questions throughout this document and provide additional insights which may be beneficial with the preparation for selling your home.
Selling your home can be more than just a financial decision, it can also be an emotional experience. Even though you may have various reasons to sell, you may still feel a strong attachment to your home, which can add to the stress of preparing for the sale. This includes not only the transactional and contractual aspects but also the pressure of staging, decluttering, scheduling showings, home touch ups or renovations, and meeting with key stakeholders like lawyers and real estate agents.
We’re hoping that the information and insights in this guide on selling a home will help unburden some of the stress and feelings of being overwhelmed
While selling your home can be a rewarding and exciting experience, it may also be one of the most significant and challenging transactions of your life. It can inspire you to declutter and get rid of unnecessary or unused belongings, move to a new home, and perhaps even relocate to a different area. There are many ‘moving parts’ involved in the home-selling process. If you want the best offers when selling a home, you may need to do some work on your property to ensure it’s ready for potential buyers.
Your home will need to have ‘curb appeal’, be clean and in top condition. Necessary repairs, landscaping, renovations or upgrades will also need to be completed prior to listing the home.
While selling your home may initially seem like a daunting task, especially for first-time sellers, selling your home can be a smooth and fulfilling experience, with the right approach. By doing your research, seeking guidance and support from professionals, and being prepared, you can navigate the process with confidence and achieve a successful and rewarding outcome.
Although getting organized and preparing for your home sale may require time and effort, you won’t be alone in the process. In most cases, a real estate agent will guide you through the sale and transactions, and you’ll also need a lawyer to work alongside you and your agent to ensure compliance with government reporting, regulations, and real estate laws. We’ve also included additional resources in this guide which may be beneficial with your preparation efforts.
Selling your home can bring uncertainty about the sale price and how buyers and other real estate agents will perceive your property. You may find yourself asking questions including:
Although many of these concerns are beyond your control, with the assistance of a lawyer, a real estate agent, and other specialists, most real estate transactions—despite their complexity and occasional challenges are managed professionally, successfully, and in a timely manner.
Our goal with this guide is to assist you in researching and addressing questions related to selling your home. We’ll offer valuable insights throughout the various stages of this important life milestone, including sections:
In this guide on selling a home, we’ve aimed to provide as much information as possible. However, it’s challenging to cover every topic and detail related to selling your home.
We’ve left out insights related to the topic of marketing your home, which is also an important aspect of selling a home.
If you need additional or expanded information related to the topics we are covering, we have included a robust collection of source materials and link sources at the end of our guide within the Sources and Additional Information section, or alternatively you can always contact us at our office for further information or clarification.
This section will focus on the initial steps homeowners can take to prepare for selling their home, highlighting the top priority tasks. Additionally, while it’s important to find a recommended real estate agent, mortgage lender, and real estate lawyer early on, we will cover those topics later in this guide.
In the next section, we will focus on preparing your home for resale, including enhancing its physical appearance and key attributes. Section one will
One of the first, and perhaps most obvious, steps for a homeowner is to reflect and ask themselves, as well as anyone else involved in the sale, ‘why’ they want to sell their home. Do they really need to or want to sell?
There are situations where homeowners start the process, perhaps even hiring a real estate agent and placing a sign on the lawn, only to change their minds and halt the sale. Selling a home requires commitment, from the initial decision through to closing. Therefore, it’s essential to fully understand your reasons for selling and ensure that all family members involved are equally committed to the decision.
In addition to identifying the geographic area, type of home, and neighborhood you want to move to, the majority of your preparation time as a homeowner will focus on getting your current home ready for resale.
While we’ve already discussed the physical preparation involved, another time-consuming aspect will be engaging with stakeholders, such as real estate agents, mortgage lenders, and lawyers, and understanding their roles and responsibilities. Asking the right questions and ensuring clear communication with these professionals is crucial to a smooth selling process.
If you’re planning on selling your home, chances are you will also be in the market for purchasing a new home. This means your initial contact will most likely be related to financial readiness and affordability, and aspects related to your next home. These initial stakeholders usually include a mortgage lender and a real estate agent.
Many home sellers are also planning to buy a new property, making it essential to connect with a mortgage lender early in the process.
Before reaching out to a real estate agent or lawyer, most people contact their bank or a mortgage lender to assess whether they qualify for a mortgage and can afford the new home.
In some cases, sellers may contact a real estate agent first, but one of the first questions the agent will ask is about mortgage and financial details, especially if you’re also purchasing a new home.
If you are selling your home and need a mortgage to buy another home, you should be prepared in advance to talk to your mortgage lender. Here are some of the key documents and details your mortgage lender will typically require:
These are most of the details you should be prepared for when speaking with your mortgage lender. They may request additional information, such as specifics about the property you’re planning to buy and its financial implications.
When selling your home, your real estate agent is expected to provide you with detailed information about market conditions specific to your area. They should also outline their strategy, efforts, and activities to attract the right audience and potential buyers, with the goal of securing the best possible price and offer for your home. This includes marketing plans, pricing strategies, and any other initiatives designed to maximize your home’s visibility and appeal.
Your real estate agent may also provide referrals to other home sale professionals that you will need, including a lawyer, if you don’t already have one. Other professionals may include trade professionals like electricians, plumbers, carpenters, painters or a staging company.
They will also attend and arrange home inspections and appraisals, if your mortgage lender haven’t done so already. Your real estate agent will schedule and arrange open houses, showings for qualified and interested buyers.
Your Real Estate agent will be providing you with a Real Estate Council of Ontario (RECO) Information Guide which outlines the duties of brokerages and agents, the benefits of working with a realtor, representation agreements, commissions, bidding wars disclosure rules, and other topics.
When meeting with your real estate agent, you’ll need to have the following prepared:
When selling a home, the real estate agent will present you with an agent representation agreement called the ‘Listing Agreement’. This document is a formal contract between the home seller and the real estate brokerage who represents the homeowner after this agreement has been signed.
A real estate agent will ask you to sign a ‘Listing Agreement’, before engaging with you. This document should be straightforward as it gives the listing agent the permission to sell your home for a certain period of time.
Your realtor can expand on the importance and details of these documents during your initial meetings.
Most importantly, whether you’re selling, buying, or both, if you’re uncomfortable with any document or do not fully understand it, refrain from signing until you are confident in its contents and feel comfortable moving forward. You can always ask your lawyer for direction prior.
Although this blog post doesn’t cover every aspect of the real estate selling process, we’ve highlighted essential components based on our client experiences.
We’ve provided additional details and similar questions and insights about working with advisors in Section 3 of this guide. Section 3 would be recommended reading when preparing for real estate agent interviews and selecting your real estate agent. These questions may include:
It may also be prudent to include a lawyer in your initial planning, we will provide more details about real estate lawyer preparation and roles in sections three and in section seven.
You may want to conduct some research on working with other key stakeholders in the home sale process, including specialists who focus on:
Although this section has primarily focused on Homeowner Preparation, we felt it was important to highlight a few key factors and insights related to your home selling efforts and the key stakeholders involved in the process.
We will go into more detail about working with your advisors in section three of this guide, ‘Section 3. Home Selling Advisors: Working With Your Lawyer and Your Real Estate Agent’. Our first section will focus on initial preparation for you and your home.
There are other important home selling factors, which we will briefly mention in this section, including your mindset and your motivation for selling your home, which will be expanded upon within this guide.
You should be properly prepared prior to meeting with your stakeholders, this preparation should include:
Your home sale process stakeholders will most likely include a:
Be prepared to understand local market values and comparisons in your area. Your agent should be conducting these analyses on your behalf. That being said, it’s essential to do some initial research to familiarize yourself with your agent’s selling strategy and negotiation approach. Additionally, understand how your agent determined the market value of your home. This exercise will prove useful during the negotiation, offer, and counteroffer process.
This first section focused on initial homeowner preparations. The next section will provide insights and factors related to preparing your home physically for resale.
In the previous section, we provided insights on homeowner preparation best practices. The next step is understanding what homeowners can do to best prepare their home for sale.
Once the homeowner’s sale motivations and needs are understood, the next step is to determine how to best prepare the home for sale.
Decluttering all areas of your home, including the basement, is essential. A home sale presents the perfect opportunity to rid yourself of unused and low-value personal items. Consider letting go of old toys, stale newspapers, and items with little future use. Now is the time to find new owners for these items or discard them responsibly. Decluttering will make your home significantly more appealing to potential buyers, both online and in-person. A thorough decluttering and deep cleaning can substantially increase your home’s sale value.
When it comes to preparing your home for sale, it’s essential to understand the tasks that you can handle yourself versus those that require professional expertise. Start a ‘fix it’ list and get started. Contact appropriate licensed trades/specialists such as electricians, plumbers, painters, carpenters, HVAC, etc. Or, ask your realtor if they can recommend a contractor. Fixing minor defects in a home goes hand-in-hand with selling a home. Your realtor may have a robust set of referrals for the right contractor needed to fix whatever issues may be necessary for getting top dollar for your home.
Consider two crucial investments before selling your home to make it more attractive to potential buyers:
Here are two sites which may help you with finding a home inspector or land surveyor:
Consider hiring a professional cleaning service for a thorough deep cleaning of your home. While regular cleaning typically focuses on surface-level tasks such as:
Deep cleaning goes beyond these tasks to tackle neglected areas and provide a detailed, thorough cleaning, including:
Due to the extensive nature, focus, and time required, deep cleaning services typically cost more than regular or maintenance cleaning.
Ask your realtor for guidance and consider investing in home renovations or remodelling to increase your home’s appeal and value. Some buyers prefer a move-in-ready home with minimal work required. Focus on:
These strategic renovations can make your home more attractive to potential buyers and set it apart from the competition.
First impressions matter when selling your home. The exterior appeal of your property, including the lawn, landscaping, driveway, roof, doors, and windows, can significantly impact potential buyers. Consider hiring professionals to enhance these focus areas before listing your home. This may include:
Hiring a professional to give your lawn a boost, including mowing, trimming, and fertilizing
By investing in these exterior improvements, you can create a positive first impression and increase your home’s curb appeal, making it more attractive to potential buyers.
Organizing a list, including the issues and fixes including the contractor hired to fix the issue. Include a list of all major appliances, the vendor, the date of purchase and any warranties or service plans.
As the primary stakeholder who is selling your home, you are responsible for cancelling your utilities. You should also be ‘preparing’ in advance to cancel all your subscriptions (home delivery like newspaper, Amazon for example) and utilities, so when the time comes to cancel them, you will have all the termination information ready. In addition to subscriptions and utilities, other important items to consider cancelling:
The quick answer is no, yes and maybe. Let us expand on that.
No, It is not mandatory by law to have a survey when selling a home.
Yes, if there is seller disclosure about a site boundary issue or dispute, a survey is a good idea.
Maybe, although you don’t legally need one, having one could be very beneficial when selling your home. Some buyers would value the document and would give them the peace of mind that the property is covered from a survey perspective, they don’t have to worry about the property’s boundaries or any future potential issues or disputes. Another benefit is that they wouldn’t have to have a survey performed in the future.
A house survey is performed by a licensed professional. The survey provides a detailed analysis and description of your property, including its boundaries, its structures, and the property’s measurements.
A recent study conducted for the GTA showed that 49% of residential properties had boundary issues that could lead to disputes, so boundary disputes may not be as rare as expected.
If your neighbor builds a structure, builds a fence, pours a concrete pad in their backyard and it encroaches over a property line your survey can help protect you and your property boundaries.
Although Title Insurance ‘may’ alleviate the need for a property survey, if there is a dispute Title Insurance will defer to a property survey. You should also investigate who the Title Insurance covers, does it cover you or the lender, or both?
Additional information about surveys can be found at the Association of Ontario Land Surveyors website.
Now that preparations have been planned by the homeowner for both themselves and their home, the next section will provide insights and details about working with your home sale advisors and resources
The homeowner will need the assistance of a lawyer and in most cases a real estate agent, a mortgage lender, and perhaps other resources. This section will provide details to best prepare for these advisors and their role with the home sale process.
One of the first things you will want to do is to start looking for an experienced and knowledgeable real estate agent that is a fit for your needs and comfort levels, and also knows your specific home area market and geography. Your questions may include:
Ask for referrals from people you know and trust and have numerous interviews (at least 3) to find the right fit. Don’t be afraid to interview these prospective real estate agents before making any commitments. Don’t forget to check out their online reviews as well.
Whether you are buying or selling a home, having a lawyer is required, particularly for the ‘transfer of title,’ which is a legal component of the completing the sale.
Your real estate lawyer will assist you throughout the selling and buying process. This process can sometimes become quite complex.
They will also ensure that the transfer of homeownership is legally binding and complies with all applicable laws.
Your real estate lawyer plays a critical role in the home selling process, so it’s important to involve them as early as possible.
It’s crucial that your lawyer is a knowledgeable and competent legal specialist in handling home sale and real estate transactions.
You’ll want a friendly, thorough, and detail-oriented lawyer, along with a client-focused office staff, to guide you smoothly through the entire process.
As mentioned earlier, when you first meet with your real estate agent, they will ask you to sign a “Listing Agreement.” Before signing any agreement, it’s advisable to consult a lawyer. Since a real estate lawyer is essential throughout the home selling process, one of the first questions you can ask them is, “What is a listing agreement, and should I consult a lawyer before signing one?”
You will need to provide to your lawyer proper identification, including two pieces of ID, one being a government issued ID with photo (excluding a health card). You will also need to provide all the documents related to your property, including your:
Your lawyer will require a copy of the Agreement of Purchase and Sale, and your ID, in order to formally open a file.
Once you are prepared to meet with your trusted resources, it’s time to focus on the strategic and tactical components of the home sale process, including understanding how to receive and negotiate offers on your home, which we will cover in the next section.
The home selling process will have many tactics and strategies related to the selling of your home, and the eventual receiving of offers. This section will help with the understanding of the process.
Receiving home purchase offers and the negotiation process can seem overwhelming and a bit intimidating, especially if you are not accustomed to signing contracts on a regular basis. It may appear that way, but it doesn’t have to be, not when you have competent resources working with you, including your real estate agent and broker, your real estate lawyer, your mortgage lender along with all their staff who are there to support them with your home sale efforts.
When your home has been listed, your real estate agent will begin scheduling home visits for other brokers and their clients and hosting open houses. Eventually your agent will begin to receive offers, and sometimes multiple offers all at once. One of the first steps when receiving an offer is to examine and evaluate the offer very carefully. Evaluation criteria should include:
When you receive an offer, it’s unlikely that you will accept it ‘as is’. You will most likely either be declining the offer or making a ‘counteroffer’. If you decline the buyer’s offer, they can make another offer or they can simply walk away from the process.
The counteroffer is a natural and normal part of the negotiation process and something that your real estate agent should be very familiar and comfortable with. Your counteroffer may include an adjustment to the offer price they presented, or it may concern the conditions set forth in the offer, conditions that you may be uncomfortable with. It’s important to be very specific and clear with your counteroffer to avoid any potential misunderstandings.
A common misconception is that a counteroffer must be submitted by the noted “irrevocable” date on the initial offer. This is incorrect. The irrevocable date on an offer is the timeline by which you have to accept the initial offer, without any changes or amendments made to it. If you plan on amending the offer and submitting a counteroffer, the irrevocable date becomes irrelevant, as you are no longer accepting the original offer. At the time you submit a counteroffer, you will pick a new irrevocable date for your offer.
First, let’s define the difference between a fixture and a chattel. A fixture is part of the building, its fixed or fastened to the building, and it’s built into the building and cannot be moved. A Chattel is an item of personal property that is movable and is not part of the building.
Ontario real estate law states that at first instance, fixtures are included, and chattels are not.
Avoid disputes and make sure the wording and context are very clear in the sale agreement, if an item needs to be excluded then it should be specified and named in the sales agreement.
In most cases, the deposit is held in a trust account with the ‘listing’ agent.
A buyer’s deposit funds need to be available, especially if they may want a competitive edge with their offer. If an offer has been made on your home with conditions and the conditions have not been withdrawn by the buyer, then the buyer’s deposit will be returned to them in its entirety.
However, should the seller have reason to believe that the buyer did not act in ‘good faith’, then the deposit can be put ‘on hold’ until a judge rules on the deposit, which could take some time to resolve.
Lowball offers are usually offers that are below the home’s market price or below the asking price.
The motivation behind a ‘lowball’ offer is somewhat obvious; the buyer wants to buy the home at a discount.
Many homeowners who are selling their home understand that a home inspection will probably be needed if they want to sell their home. This may cause some concern and anxiety, what if costly repairs will be required?
A licensed home inspector should be doing a very thorough inspection of your home. From the roof, throughout the home and down to the basement. The inspector will be looking for structural issues like faulty wiring, plumbing issues and other issues like hidden water damage.
If the inspection is performed during a home sale offer process, it could affect the negotiations with the seller making concessions, or worse the buyer walking away from the deal altogether.
So much so that a home seller may become even more concerned with the home inspection. It doesn’t have to be. These repairs may have been necessary regardless of selling your home, and the inspections could be saving the homeowner money if the issues were diagnosed early.
You may want to consider getting a home inspection yourself, prior to listing the property for sale. If a home inspection was performed proactively before the home was listed, this could be an opportunity to resolve any inspection issues before the listing and offer processes have been initiated. A healthy home and clean inspection report could demonstrate transparency and trust with future potential buyers.
A home inspection helps both the buyers and sellers make informed and transparent decisions, and limit and the future home inspection issues or misunderstandings.
The starting presumption of any purchase is ‘Caveat Emptor’, meaning: “Buyer beware”. It is up to the buyer to identify any deficiencies with the property that they want resolved, prior to closing. Deficiencies that are readily observable are referred to as “Patent Defects”. If the buyer does not address Patent Defects through the negotiations of the purchase, the buyer is presumed to have accepted such deficiency.
On the other hand, the Seller is obligated to disclose any “Latent Defects”. Those are any defects that are not readily observable, such as hidden issues behind a wall, ceiling or floor, which the Seller has knowledge of. The Seller’s failure to disclose Latent Defects can lead to misrepresentation and breach of contract.
To ensure you as a Seller don’t run into any issues, full disclosure is highly recommended. So much so that the Ontario Real Estate association (OREA) has published a ‘Seller Property Information Sheet (SIPS)’ which requests details and information about the condition of the home that is for sale. The SIPS does state that the answers are not warranties or and are for informational purposes. The SIPS also states that sellers are not responsible for accuracy of their answers.
This is a document that you may be requested to complete by your real estate agent, and failure to provide the SIPS report may cause potential buyers to believe that there may be an issue with the property.
Another reason to have an inspection performed beforehand.
The SIPS may be another document that you may want to review by a lawyer, it is written in a somewhat complex legal tone. Real estate agents are not lawyers, and there may be questions within the SIPS that require complex answers and answers required within the SIPS that are not required under law.
A stigma when referred to a home sale or purchase (real estate); “In the context of real estate, a ‘stigma’ is a non-physical, intangible attribute of a property that may elicit a psychological or emotional response on the part of a potential buyer.” (“Buying or selling a former grow-op home? – Ottawa Sun”) , Real Estate Council of Ontario (RECO).
If the buyer specifically asks about a stigma, you must answer truthfully. For example, if the buyer/buyer agent asks if you have issues with any neighbors, if they are loud or known to cause trouble, you must answer honesty.
You still have your rights to privacy. If the buyer agent were to ask you a question in the context of stigma, but is a question that is personal or private, such as personal illness, marriage issues, that is a personal question and not related to stigma.
Many of the questions we receive are related to the process of receiving and negotiating offers. We trust we have provided some insights to help the home seller navigate these two important components.
Our next section covers one of the most popular requests we receive: checklists. Our clients often ask for a list of ‘to-do’s when completing a specific task. We hope this section assists you in your home-selling journey.
Our clients often ask us to include a task list of fundamentals, a ‘to-do’ list, for the topics we are writing about. A checklist for selling your home sale can be beneficial because it allows us to break a somewhat complex set of tasks into a more manageable series of steps and also track the items on the list which we have completed.
A checklist can also provide additional insights and steps a reader may not have thought of, and also remind us about a step, and it may also limit missing or forgetting something important.
There are many categories and subcategories that could have been included in this section, which could be a bit overwhelming, so we have taken a practical approach and included the tasks that most home sellers may need to track or be aware of.
We’ve included several series of checklists throughout this guide to help you with your home sale process. It may be beneficial to be proactive and create a home sale timeline. A timeline with all points in the home sale process, from the beginning to the end. This timeline will help you with making sure the entire process goes as smoothly as possible, and you don’t miss important milestones or waste your time with forgotten items. You may want to update your timeline with new items (or check off completed items) as the home sale process matures.
You will need these documents when meeting with your home sale stakeholders, including your mortgage specialist, real estate agent and lawyer. Some of these documents are for the next owner of the home (warranties, manual, contact information for service professionals):
Although it would be difficult to itemize every single detail that could arise during the home-selling process, we hope our checklists provide valuable guidance for your home-selling preparation.
Our next section will try to provide insights on one of the final steps in the process of selling your home, and perhaps one of the most important: the day of closing and what to expect on that day.
Our focus on our sixth section will be on the many questions we receive about the latter stage of the home sale process on the day of closing.
These Questions Include
For your information and convenience, we’ve outlined the answers within this section and throughout this guide.
There are many documents and paperwork involved with buying or selling a home in Ontario.
The Ontario Real Estate Association (OREA) has developed a set of standardized forms that are most commonly use for the resale of residential or commercial property. These forms are generally very good and complete, but they deal with a lot of issues and can be complex.
Most agreements to buy and sell real estate are created on pre-printed forms which have been created by the real estate industry or by lawyers.
Importance of Reviewing Your Agreement of Purchase and Sale
Understanding your obligations and entitlements of your Agreement of Purchase and Sale before you sign it can avoid disputes and lower your costs. Having your lawyer review the Agreement of Purchase and Sale with you before you sign it can ensure that understanding.
Not sure how the home purchase process works? The primary document at this point would be the Agreement of Purchase and Sale (Agreement). Every home purchase is different; however, this is a typical home purchase sale process:
Don’t forget to bring your identification when you are signing documents with your lawyer. They usually need to make two copies of your ID. One must be photo ID (not Health card), your passport can be your other ID.
Closing day activities will be very active on or just before closing day.
Usually, on the morning of closing day the buyer’s lawyer will receive the mortgage funds from the mortgage lender. The buyer’s lawyer will usually electronically transfer the designated funds to seller’s lawyer trust account or deliver a bank draft.
The seller’s lawyer will then verify and validate that the closing documents are complete, ensuring all documents are accurate and properly signed, and ensure that any conditions have been fulfilled as per the sales agreement.
Once both buyer’s lawyer and the seller’s lawyer have confirmed that everything is accurate, correct and all in place, then the next steps are to register the property, transfer ownership to the buyer making any required security registration for the lender.
Once step three is completed, the seller’s lawyer will transfer the funds to agreed-upon seller’s account (if there was no mortgage outstanding to pay out), usually the same or next day after closing.
Things happen. There could be extenuating circumstances on the buyer’s end that could delay the process, these could be circumstances that are out of the buyer’s control.
Legally, if the buyer doesn’t close the deal on the agreed upon date, the seller can decide to terminate the deal, and the buyer could lose their deposit. In most cases it’s in both the buyer’s and seller’s interest to make the deal work and come to an amenable arrangement for both sides.
Other things that can go awry are surprise costs because the buyer didn’t do their homework, or their lawyer or real estate agent didn’t realize the buyer didn’t understand all the fees.
An example of these surprise costs is the land transfer tax, or the disbursement fees (usually 3rd party fees) charged by their lawyer while working on the client’s behalf, in most cases lawyers are not permitted to profit from disbursement fees.
As outlined in our checklists, there are things the seller or buyer can do to help prevent these issues, such as:
Closing day can be a very exciting part of the home-selling journey, perhaps marking the beginning of the next steps in your homeownership path. We’ve come a long way with this guide, and we appreciate you sticking with us.
Our next and final section will cover the role of a lawyer in the home selling process. A lawyer provides a very important role by ensuring the legal aspects of the home sale transaction are properly managed.
Your real estate lawyer will be fulfilling a critical role with your home sale, so your real estate lawyer should be involved as early as possible.
It’s imperative that your lawyer be a knowledgeable and competent legal specialist when it comes to helping you with your first-home purchase transaction. You will need a friendly, thorough, and detail-oriented lawyer and office staff who are client service oriented who will help you navigate
through the entire process.
A lawyer’s role is to ensure that the home seller is legally and financially protected throughout the home selling process. Your lawyer will be performing and assisting with many tasks throughout the home sale process including:
An Agreement of Purchase and Sale can deal with numerous issues and can be complex. Being proactive and transparent with your real estate lawyer is very important, in advance of signing any home purchase documents.
A couple recent questions we have received have been risks related to the selling a home privately, and the reporting of the home’s sale to the CRA. We will try and provide some insights on those two recent questions.
As home values increase as do the fees home sellers will have to pay real estate brokers. These increased fees have caused some home sellers to question the value of having a real estate agent sell their home.
Our clients occasionally ask us whether the risk of selling a home privately is worth it. While we can’t decide for our clients, every home seller’s risk tolerance and needs are different. We can provide some insights into the risks and possible rewards, including:
Only the home seller can decide whether the risk is worth the reward.
While the potential savings on brokerage fees may seem significant at first, the amount of effort required by the seller, combined with the legal and contractual responsibilities, can make a private sale challenging. There’s also the risk of incurring legal fees after the sale if issues arise. Given the complexity of the home-selling process, only those who have ample time, and are highly comfortable and experienced with real estate transactions, should consider selling a home privately.
On October 3rd, 2016, the Canadian Government announced a change to the reporting requirements regarding the sale of a principal residence.
If you qualify for the full principal residence exemption, it’s usually not necessary to report the sale of your principal residence on your income tax return, or pay any tax on the profit from it, if you sell it, or are considered to have sold it. That being said, that all changed on October 3rd, 2016.
Beginning with the 2016 tax year (typically due by late April 2017), you are required to report basic details on your income tax and benefit return when selling your principal residence to claim the full principal residence exemption. This includes the date of acquisition, proceeds of disposition, and a description of the property. Your accountant or bookkeeper can assist you those reporting details.
In addition, at the time of your home sale, your real estate lawyer who is handling your home sale transaction submits a home sale tracking form to the CRA which outlines the details about the sale of your home, including the home sale price.
In most cases, the provincial land title office also provides property transfer information to the CRA. This reporting allows the CRA to cross reference
reported home sales across a few different sources for their records. Compliance data reported from mortgage lenders and real estate agents also update home sale records at CRA, so it critical to accurately report your home sale information on your income tax return.
Congratulations on reaching the end of this guide! We hope you found it informative and valuable in your home-selling journey.
Selling a home can often be a complex undertaking that involves careful research, strategic planning, and an understanding of the local market and the needs of potential buyers.
If you’re considering downsizing or moving to a smaller home, be sure to check out our article, Downsizing: The Advantages and Disadvantages of Moving to a Smaller Home, to learn more about what to consider before making that decision.
While some sellers might explore the option of selling their home on their own to save on brokerage fees, working with experienced professionals, such as real estate agents and lawyers, can provide valuable advice, insights, and support throughout the process.
If you’re in the market for a new home, take a look at our guide, Six Critical Factors to Consider Before Buying Your Next Home, for important advice before you start your search.
By following the steps and checklists outlined in this guide, you may find yourself better prepared with essential information that can assist in approaching the selling process with confidence. From understanding disclosure obligations to managing closing day activities, each aspect plays a role in contributing to a smoother transaction.
Once you’ve successfully sold your home, you might find yourself thinking about purchasing again—especially if it’s been a while. Navigating the buying process can feel different from when you last bought, so we’ve put together some valuable reminders and insights. Check out our blog on You’ve Decided to Buy: 9 Insights to Help the First-Time Home Buyer for helpful tips to guide you through this important next step.
Thank you for including us with your home-selling journey research. We wish you success as you take these important steps toward the next chapter of your life!
If you’re still weighing the decision to buy, we recommend reading Your First Home: Is Buying a Home the Right Decision for You? for more insights to guide you through the process.
Disclaimer
Sources and links are provided for source credit and attribution, and for additional information purposes only. Nichols Law is not affiliated, associated, authorized, endorsed by, or in any way officially connected with any of the sources or links provided.
Century 21, ‘Step-by-Step Process of Selling Your Home’
Canadian Mortgages Inc., ‘What Happens to Current Mortgage When Selling a House in Toronto.
RBC, ‘ Selling and Buying a Home’
RE/MAX, ‘ Selling Your Home Before Your Mortgage Term Ends
ZOLO, ‘ Can You Sell a House With a Mortgage? ‘
Government of Canada, ‘Breaking Your Mortgage Contract’
RE/MAX, ‘Selling Your Home Before Your Mortgage Term Ends’
Rocket Mortgage, ‘What Parties Are Involved When Buying a House?’
MPAC, Municipal Property Assessment Corporation, ‘ Application for Direction of School Support / Separate School Support Lease ‘
Royal LePage, ‘ Sold Your Home? Don’t Forget These 4 Important Steps Before You Leave
City of Toronto, ‘Selling Your Property or Moving – Request a Final Meter Read’, ‘Selling Your Property’ Still Receiving Bills?’ , ‘ Selling Your Property- Finalizing and Setting Up Payments’
Edmonton Real Estate, ‘ What Do You Do With the Utilities When Selling Your Home?’
Homelight, ‘ When Should You Stop Utilities When Selling a House?
OREA, ‘ What You Should Know About Surveys
WOWA, ‘Property Survey in Canada; What You Should Know
IBW Surveyors, ‘Surveying Services for Home Owners; Surveyor’s Real Property Report (SRPR)
Protect Your Boundaries, ‘ Why a Survey Plan Should Be in Your Home Selling Package
Association of Ontario Land Surveyors, ‘ Why Do I Need a Survey? What Is It” What’s It For?
Association of Ontario Land Surveyors, ‘ I’m Selling/Buying a House, and the Purchase/Mortgage Lender Says I Need a Survey. How Do I Go About That?
Association of Ontario Land Surveyors, ‘ Find a Survey Company
Ottawa Sun, ‘ Four Closing Day Questions Answered
Sun Life, ‘ Buying a House: What Happens After Your Offer Is Accepted?
Emily Jones Real Estate, ‘ Real Estate Closing: How Long Does It Take?
Wahi , ‘ How Long After Closing Does the Seller Get Paid?
BrelTeam, ‘17 Things To Know About Closing Your House Deal
ZOLO, ‘ What To Expect From a Real Estate Closing: A Seller’s Perspective
CMHC, ‘Closing and Moving Day
Surex,’ What Are the Costs When Selling a House in Ontario?
Royal Lepage, ‘Sold Your Home? Don’t Forget These 4 Important Steps Before You Leave’
CREA, ‘CREA Forecasts Rebound in Residential Property Sales’
WOWA, ‘Canadian Housing Market Data for April 2024’
RBC, ‘Early Signs of a Housing Market Upturn Emerge Across Canada’
Zoocasa, ‘Buyer’s Journey: Here’s What To Expect on Closing Day
RBC, ‘Canada’s Housing Market Outlook: A Tale of Two Halves in 2024
Wahi, ‘10 Things To Consider When Selling Your First Home’
Global News, ‘Canada’s Housing Market Is ‘Starting to Turn a Corner.’ Are Prices Rising?
RE/MAX, ‘Important Things to Consider When Selling Your Home
Jason Polonski Realty, ‘7 Risks of Selling Your Home Privately’
Move Me To.Com, ‘Home Sellers Guide to Selling Real Estate in Ontario’
CBC, ‘Where Ontario’s Housing Market Is Headed in 2024’
Toronto Realty Boutique, ‘12 Things to Do Before Selling Your House
Fivewalls, ‘Fivewalls Is Your Home Selling Guide
RE/MAX, ‘Selling a House in Ontario: Your Complete Guide’
iSure, ‘How to Sell Your Home — 6 Tips for Success’
Move Me To.Com, ‘Negotiating That Winning Real Estate Deal
The Brel Team, ‘100 Mistakes Home Sellers Make (and How To Avoid Them)
Justco, ‘How to Sell a Home in Ontario: A Complete Guide’
Steve Roblin Real Estate Broker, ‘5 Can’t-Miss Tips for Selling Property in Ontario
Move Me To.Com, ‘Home Improvements DIY or Call a Professional?
Woolcott Real Estate, ‘8 Important Things to Remember When Selling Your Home
Forbes, ‘Best Time to Buy a House in Canada in 2024
Government of Canada, ‘Selling a Home
Wahi, ‘Selling a Home in Ontario? Read This First!
Thinkinsure, ‘How To Sell Your Home: Unlocking the Door to Success
Move Me To.Com, ‘10 Things Every Seller Should Do Before Selling Their House’
The Globe and Mail, ‘Seller beware: Even if the deal dies, the agent may still want their commission
Justco, ‘How to Prepare for Home Inspection: A Seller’s Guide
Woolcott Real Estate, ‘The Ultimate Seller’s Checklist for Listing Your Home
Toronto Star, ‘When you’ve got the keys to your new home but the sellers haven’t left
Ottawa Sun, ‘Agreement of Purchase and Sale explained
The Brel Team, ‘Selling the House You Bought Last Year’
RE/MAX, ‘10-Step Guide to Selling Your Home
CIBC, ‘How to Avoid Closing Day Problems
Realtor .com, ‘ The Closing Process: What Home Buyers Can Expect on the Big Day