Ontario Real Estate Archives

Introduction: Navigating the Home Selling Process

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.

Common Questions Home Sellers Have

When selling a home, many sellers wonder about the logistics surrounding closing day and post-sale responsibilities. Common questions include:

What happens on the day of closing?
What do I do with my keys?
What do I need to disclose to the buyer in terms of house defects?
What happens if the buyer can’t close?

Financial and Administrative Considerations

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:

How is my mortgage dealt with?
When can I expect my money?
Who contacts the utility companies?
Who contacts the property tax department?
Do I need a survey?

Preparing for the Sale

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.

Balancing the Emotional and Practical Aspects of 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

Preparing Your Home for a Successful and Rewarding Sale

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.

Smooth and Fulfilling Home Sale Process

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.

Guidance and Resources for a Smooth Home Sale Process

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.

Key Considerations for Home Sellers

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:

Will buyers find our home and location appealing?
Will we get our asking price?
How long will it take to sell?
Will we have time to find and move into our next home?
What if an inspector uncovers hidden issues, or we need to pay for additional repairs?

Comprehensive Guidance for Every Step of Your Home Sale

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:

Homeowner Factors to Consider Before Selling Your Home
Preparing Your Home for Resale
Home Selling Advisors: Working With Your Lawyer and Real Estate Agent
Home Selling: Understanding the Process of Receiving and Negotiating Offers
Home Selling Checklists: What Do I Do Next
Home Closing: What To Expect
The Role of a Lawyer with the Home Sale
Next Steps

Guide Outline and Additional Resources

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.

1. Homeowner Factors to Consider Before Selling Your Home

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.

Homeowner Preparation

Preparing Your Home for Resale

In the next section, we will focus on preparing your home for resale, including enhancing its physical appearance and key attributes. Section one will

Reflecting on Your Motivation to Sell

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.

Connecting with Key Professionals

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.

Balancing Selling and Buying

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.

Mortgage Lender: Preparing for Your Next Home Purchase

Preparing to Meet with Your Mortgage Lender

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.

Documents and Information Required by Your Lender

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:

Personal and Employment Information

Up to date identification
Proof of income and employment, including last pay stub. Position and length of employment with your employer
CRA Notice of Assessments, usually last two years
Income Tax Returns, usually for the last two years

Financial and Asset Details

List and details of your assets

Debt and Liabilities Information

Your level of debt (debt/creditor details)
Financial statements from banks and investments
List of debts or financial obligations, including monthly payments, e.g., car loans/leases, credit card balances, lines of credit, student loans, child support

Down Payment and Closing Costs

Details providing the ability to pay closing costs and the down payment
Down payment details and sources

Additional Information

Your mortgage lender may also ask for information related to the home you are about to purchase, including amounts and values associated with that next home purchase.

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.

Real Estate Agent

Setting Home Selling Expectations with Your Real Estate Agent

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.

Preparing for Key Home Sale Steps

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.

Essential Documents and Agreements: What you need to prepare for with your home sale real estate agent

When meeting with your real estate agent, you’ll need to have the following prepared:

Identification

You will need to identify yourself when meeting your real estate agent, by law they will need a government form of ID with a picture, such as a driver’s license or a passport. Ask them if they need anything more specific for your meeting.

Listing Agreement

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.

Before signing any agreement, you may wish to speak with a lawyer first. You will soon need a real estate lawyer anyways, so this can be one of the first questions you can ask your lawyer, what should you know about a real estate ‘Listing Agreement’
You will soon need a real estate lawyer anyways, so this can be one of the first questions you can ask your lawyer, what should you know about a real estate ‘Listing Agreement’

Setting Your Sale Price and Listing Strategy

Sale Price Considerations

Your real estate agent will want to know how much you want to sell your home for, and why and how you arrived at that amount. Your agent will be able to provide market comparisons to guide you in setting an attractive, yet profitable, listing price.

Home Showings and Open Houses

You will need to create a schedule for home showings and open houses. Make sure you are out of the home during these events, and that the home is clean and typically staged for optimal presentation.

Effective Communication and Negotiation

Offers and Negotiation Process

Be prepared to communicate effectively with your real estate agent to gain a clear understanding of the process for receiving offers, which may include multiple offers. You will also need to discuss your negotiation strategy in partnership with your agent. Your agent will present and thoroughly review the offers with you, ensuring you feel confident and satisfied with your preferred offer.

Clarifying Any Uncertainties

It’s important to ask questions about this process during your initial meetings to clarify any uncertainties and help ensure a smooth transaction.

The Listing Agreement

Understanding the Listing Agreement

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.

Typical selected questions to ask your real estate agent

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:

Real Estate Agent Fees and Costs

What are their commission fees? How does that all work? Are there any other fees or charges? (Sometimes the cost of staging may be in addition to the commission fee)

Agent’s Availability and Commitment

How many clients do you have and how much time will you have to focus on my home resale?

Your Role and Expectations

What do they expect of you and your involvement throughout the entire selling, offers and closing process?
What level of response should you expect from them? How soon will they respond to your phone calls, emails, texts and voicemails? Be prepared to respond to the same questions.

Communication and Updates

Ask the real estate agent how they plan to keep you up-to-date and informed throughout the home sale process?

Marketing and Staging

What do they need from you to help market your home?
How will they help stage your home?

Listing Price and Agreement

How will a listing price be calculated? Will the homeowner and seller have the final say in the listing price?
What is involved with the listing agreement? When does it begin and end? You will want time to read it on your own and perhaps the assistance of a lawyer

Home Disclosures and Security

Ask them to help you with home disclosures, what you need to disclose?
Complete strangers will be entering your home, and you can’t hide everything. How do you ensure your belongings are safe and your home remains undamaged?

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.

Other Home Selling Stakeholders

Key Stakeholders in the Home Selling Process

You may want to conduct some research on working with other key stakeholders in the home sale process, including specialists who focus on:

Home Inspection
Home appraisal
Surveys
Home Insurance

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.

These factors may include:

As mentioned, ‘Why do you want to sell?’ What are your primary motivations?
Is it the right time to sell your home?
Have the home sellers talked to all the home sale process stakeholders, especially your family members? Do your other family members want to move?
Is the motivation to move to a different area or are they financially motivated to sell?

Preparing to Work with Stakeholders

You should be properly prepared prior to meeting with your stakeholders, this preparation should include:

You should be prepared to answer your stakeholder questions, specifically your real estate agent and your lawyer, in addition be prepared to ask questions of your own
Information related to your mortgage and mortgage lender
There will be many stakeholders involved in the selling process, many will ask similar questions, and they will all ask specific questions related to their area of specialization. Most will ask why you are selling your home, which can help them customize their services with your specific needs in mind

Essential Stakeholders in Your Home Selling Process

Your home sale process stakeholders will most likely include a:

Real Estate selling agent, and a real estate ‘buying’ agent if you are also buying a home during the selling process
Mortgage Lender (other mortgage lender/financial representatives, including a mortgage broker, and credit contact and appraisal contacts will follow after the process has been initiated)
Real Estate lawyer
Home Inspection
Insurance broker

Home Sale Price Uncertainty

Understanding Market Value and Your Agent’s Strategy

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.

2. Preparing Your Home 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.

Home Selling Preparation

Once the homeowner’s sale motivations and needs are understood, the next step is to determine how to best prepare the home for sale.

1. Start Getting Rid of Stuff

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.

2. Home Maintenance

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.

This list may include:

All electrical matters, switches, lights, fans, fixtures all in working order, if not, this is the time for repair
All plumbing matters. Are the toilets, sinks, faucets, showers, bathroom fixtures (shower heads), drains etc. all in working order, if not, this is the time for repair
Have the furnace and AC checked and serviced
Have any damaged or worn areas fixed and painted, including walls/ceilings patched, if damaged, and your house painted, if required

3. Home Maintenance and Repairs Before Selling

Ensure all windows open and cranks are working
Replace lightbulbs
Replace furnace filters
Ensure all appliances are in working order
Prepare a file of major appliances purchases and service record
Prepare a file for major renovations made (appraiser and inspector may want to see these) during ownership

4. Home Inspection and Property Survey Plan

Consider two crucial investments before selling your home to make it more attractive to potential buyers:

Pre-Home Sale Inspection: Identify and address potential issues before listing your property, giving you a competitive edge in the market.
Authentic Survey Plan: A survey plan provides a precise mapping of your property boundaries, reducing the risk of boundary disputes and giving buyers peace of mind. A survey plan is a proactive measure that can prevent boundary issues, making your property more appealing to future buyers.

Here are two sites which may help you with finding a home inspector or land surveyor:

5. Thorough House Cleaning – Deep Cleaning

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:

Cleaning floors and countertops
Light dusting
Maintaining overall cleanliness

Deep cleaning goes beyond these tasks to tackle neglected areas and provide a detailed, thorough cleaning, including:

Deep scrubbing and rubdowns
Cleaning in hard-to-reach nooks and crevices
Detailed attention to closets, doors, fans, cabinets, appliances, and baseboards

Due to the extensive nature, focus, and time required, deep cleaning services typically cost more than regular or maintenance cleaning.

6. Strategic Home Renovations or Remodelling

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:

Minor Renovations:

Painting with neutral colors
Replacing minor light fixtures
Fixing leaking faucets
Repairing or replacing squeaky or broken ceiling fans and doorknobs

Moderate Remodelling or Repairs:

Removing outdated wallpaper and repainting
Cleaning or painting kitchen cabinets (white is a popular choice)
Refinishing or resurfacing hardwood floors
Cleaning or replacing carpets

These strategic renovations can make your home more attractive to potential buyers and set it apart from the competition.

7. Curb Appeal

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:

Lawn Care:

Hiring a professional to give your lawn a boost, including mowing, trimming, and fertilizing

Exterior Renovation Considerations:

Replacing old windows with new energy-efficient ones
Cleaning or repairing eavestroughs, soffits, and fascia
Repairing, replacing, or re-coating the driveway

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.

8. Prepare a Record for Home Investments or Known Issues

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.

9. Utilities

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:

Pre-authorized Municipal tax payments
Home insurance (though, we do not recommend cancelling insurance as of the closing date, in case the closing is extended for any reason. Talk to your agent about keeping insurance in place until the closing has successfully been completed)

Surveys – Do I Need a Survey?

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.

Benefits of Having a Survey

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.

Next Steps: Working with Your Home Sale Advisors

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

3. Home Selling Advisors: Working With Your Lawyer and Real Estate Agent

Key Considerations for Home Sellers

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.

Real Estate Agent

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:

Selecting the Right Real Estate Agent

Is the listing agent the person you will be dealing with, or will they be delegating the sale to one of their assistants? You may want to meet with the agent you will actually be doing all the work for you.
Ask the real estate agent why you should hire them.
Can they provide references for homes they sold, also homes sold in your neighborhood? Ask them how the agent assisted them throughout the home sale process, and how they worked with the homeowner during the negotiation process.
How many homes have they sold recently and, in the past, the agent specifically and their broker office as a whole?
How many were as a seller agent and how many as a buyer agent? What have been their results and sale outcomes?

Communication and Availability

Ask them how frequently and how they will be communicating with you throughout the process? Will they communicate via phone/voicemail, text, email etc.? Do you have their direct mobile phone number?
What do they believe your house is worth and why? What does the market actually value your home’s worth and resale?
Are they a full-time broker or do they have another job?

Marketing and Staging Your Home

What is their specific approach to marketing my home? How will they drive the ‘right audience and buyer’ activity to your specific listing and open houses for your home? What online activity?
What imagery will they be using? Still images, video, drone images etc.? They should have specific details about the marketing process.
What is their staging process and what involvement do they need from the seller?

Open Houses and Negotiation

What is their approach for open house? Frequency, hours required for each open house and duration.
What is their negotiation approach, and response to underbidding? Do they know your comfort areas for home sale price reduction during negotiation?

Fees

Are there any fees that you should be aware of, aside from the realtor brokerage fees
What do they believe you need to do to prepare your home for resale? What repairs or renovations? Ask them if there are any other factors or questions you haven’t asked of them or that you may have missed

Recommendations for Repairs and Renovations

In the event you need repairs or renovations, you may want to ask the realtor if they have recommendations for skilled trades for the repairs and renovations. They may also know contacts for home inspectors, plumbers, electricians, painters, contractors, stagers etc.

Finding the Right Fit

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.

Your real estate agent will ask you many questions, these questions may include:

The responsibilities of the home seller
Understanding contract and legal documents
Being calm during the home sale process. The pressure of selling quickly, if financially constrained
What about house insurance? How does that work?
Most common mistakes made by home sellers

Real Estate Lawyer

The Role of Your Real Estate Lawyer

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.

Importance of Early Involvement

Your real estate lawyer plays a critical role in the home selling process, so it’s important to involve them as early as possible.

Choosing the Right Lawyer

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.

Consulting Your Lawyer on Home Selling Agreements

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?”

What You Will Need to Provide to Your Lawyer

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:

The real estate contract, the Real Estate Agreement of Purchase and Sale
Mortgage/line of credit details, including a document with your Mortgage Reference Number
Most recent property tax bill
Copy of a survey, if you have one

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.

4. Home Selling: Understanding the Process of Receiving and Negotiating Offers

Understanding the Home Selling Process

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.

Navigating Home Selling Counteroffers: Receiving Offers and the Role of Your Team

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:

Offer price
The buyers financial standing and financial qualifications
The proposed closing date
Conditions placed on the home, if any

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.

Navigating Counteroffers

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.

Understanding Irrevocable Dates

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.

Home Selling: Chattels and Fixtures – What Can We Keep and Take with Us, and What Do We Need to Leave Behind?

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.

Examples of Chattels

Artwork
Floor coverings, like area rugs
Furniture
Curtains and blinds
Appliances (fridge, stove, dishwasher, washer/dryer)

Examples of Fixtures

Doors
Furnaces and central air conditioners
Bathroom fixtures
Installed broadloom and carpets

Avoiding Disputes in Sale Agreements

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.

What About Deposits?

Ways a Deposit Can Be Made

The deposit is submitted along with the offer.
The deposit is submitted within 24 hours of the acceptance of the offer.
A deposit arrangement has been made and the details have been included in the Agreement of Purchase and Sale.

In most cases, the deposit is held in a trust account with the ‘listing’ agent.

Importance of the Buyer’s Deposit

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.

What Happens if Conditions Aren’t Met?

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.

What Are Real Estate Lowball Offers?

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.

The Buyer Benefits of a Lowball Offer May Include:

Potential for significant savings, if a seller is motivated to sell, or desperate
Negotiation tactic to open discussions, trigger counteroffers. The buyer is looking for leverage

Potential Reasons Why Buyers May Lowball

The buyers themselves have a maximum budget, but they really like and want the home
The buyer has different home preference and tastes and feels that the home will need remodeling and renovations and have deducted the price of the remodelling and renovations from the asking price
Buyer agent inexperience, they may not have properly valued or assessed local market conditions, the property’s history and comparable sales for the area
Buyers may have other reasons why they believe your house may be less than your asking price

The Disadvantages of a Lowball Offer

Negative perception of buyer by the seller and seller’s agent
Wasted time, frustration and effort for the seller and listing agent, and perhaps disappointment for the potential buyer themselves
It’s an ineffective strategy in a hot market or a home in high demand, where other buyers are paying the asking price or more
The buyer may be very disappointed if they really wanted that home, and their agent suggested a lowball when the buyer wanted to offer the asking price

Approaches to Counter Lowball Offers

Don’t take it personally. Trust your real estate agent if they advise you to entertain the lowball offer negotiation process
Reevaluate your asking price. Have ‘you and your agent’ assessed local market conditions, the property’s history and comparable sales for the area?
Respond to the lowball offer with a realistic counteroffer price
If your counteroffer was rejected again by the lowball agent, perhaps it’s best to just ‘walk away’ from the process

Home Selling: Inspection and Repairs

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?

The Importance of Home Inspections

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.

Impact on Negotiations

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.

Proactive Inspections: A Smart Strategy

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.

What Are The Disclosure Obligations of a Home Seller?

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.

Understanding Patent and Latent Defects

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.

Importance of Full Disclosure

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.

Legal Considerations and Responsibilities

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.

Examples of Latent Defects that should be disclosed:

Plumbing damages
Leaking foundation
Electrical issues
Roof issues
Mould and mildew

What Happens if You Don’t Disclose?

You may have to pay for repairs
You may have to pay for legal expenses
You may have to pay for the cost of lost property value

What Are Home Stigmas?

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).

Examples of Home Stigmas

Property Was Used During or for a Crime (e.g. Drug Dealing)

A death occurred on the property
Property was owned by “notorious individual” (crime leader or known murderer)
Property was used for marijuana grow operation

Truthful Disclosure of Stigmas

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.

Privacy Rights and Personal Questions

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.

Navigating the Selling Process

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.

Looking Ahead: Checklists for Home Sellers

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.

5. Home Selling Checklists: What Do I Do Next

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.

The Importance of a Home Selling Checklist

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.

Things To Do Before Listing Your Home

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.

Gather Important Documents

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):

Income and employment details (T4, CRA Notice of Assessments, Pay stubs etc.)
Deed to your home
Home appraisals
Surveys performed
Property tax statements or receipts
Extended warranties, list of contractors or services for your home
Receipts or invoices related to home improvements
Insurance details
Copies of manuals for all appliances, AC, furnace, pool equipment etc. and contact information for the service professionals or contractors who worked on your home. If you have a pool, details related to pool equipment, water tests etc., pool company contact)
Mortgage or Line of Credit Statements for any outstanding loans registered against the property

Be Prepared To Answer Home Selling Questions From Your Real Estate Agent Related To:

When was your house built? If the previous owner provided you with those details
Is your home’s electrical and wiring in working order? Any details related to any quirks or issues. Details related to the wiring updates, panel capacity(e.g. 200 amp). Location of panel, hidden switches etc.?
Is your home’s plumbing and drainage in working order? Details of any issues, floods etc.? Are there any issues with the foundation?
Home air filter details. Extra filter and sources for filters?
Dates of major appliance replacements and installation, e.g. furnace, air conditioner, pool equipment etc.?
Is the home equipped with water softener?
Any issues or problems related to mildew or mould?

Typical Checklist Items in Advance of Closing Day

Carefully review and understand all fees and structures before signing. This includes real estate fees and commissions, lawyer fees, mortgage structure and interest charges etc., fees related to title insurance, and if needed surveys and inspections fees
Be prepared for buyer visits before closing, the buyer is entitled to visit the home in advance of closing, usually two or three visits. These visits should be outlined in ‘Schedule A’ of the Agreement of Purchase and Sale. Visits usually last about an hour and require 24 hours’ notice
You should be in contact with a moving company early in the process
Purchase moving materials
If you are taking your fridge or freezer, plan for your food
All moving and packing materials purchased
Your lawyer will need the keys to the home, some if you have multiple sets, start tracking who has them and dates to have them returned to you. You will need to remove the locks/codes from your apps if you have remote access to door locks etc.
If you have a garage door opener, leave the fobs and or remote-control units on the kitchen counter of your house, same for spare keys
Make sure you have all the documents in order for your stakeholders, your mortgage specialist, your real estate agent and lawyer

Repairs

Are there any minor or major repairs that need to be completed to the exterior or the interior of the home?
Look for damaged or worn areas throughout the home, including walls, doors, windows and baseboards. Holes (pins, hanging pictures etc.) in areas, walls etc.
Reconsider paint color schemes if not neutral tones
Reconsider wallpaper, consider repainting
Front and backyards organized, clean and tidy
If it’s summer, has the lawn been mowed? Any gardens weeded out and tended to?
If its winter has the driveway and walkways been cleared? De-iced and safe to walk on?

Making Your Home Less Personal for Your Buyer

Have you removed all personal items, family pictures, unnecessary furniture, or other personal items
Most collections of books, music, sports memorabilia etc. should be stored off-site both for decluttering and ensuring your home looks less personal for your potential buyers, and for security reasons
Has the kitchen been decluttered, including all cupboards, counters and floors? Have the sinks been cleaned? No offensive odors? Has the stove been cleaned?
Offensive
All items that could be considered offensive should be removed from your home
Has the home been decluttered? Don’t forget your basement, garage or storage areas.
Has the home been ‘deep cleaned’? Floors washed and vacuumed?
Children’s items like toys etc. should be put in storage in your home or neatly organized and set aside
Non-essentials or personal items should be stored away from your home. Have you considered or rented a storage locker or pod? To remove any unnecessary belonging or personal items. Consider storage for boxes, containers, unused items or equipment. Remove as much clutter as possible to allow the buyers to see a decluttered home and open spaces
Has all excess furniture been removed from all rooms, including the living room, den, hallways, bedrooms?
Have the windows been cleaned, clear to view exterior and are able to let in the sun?

Home Selling: Closing Day To-Do’s

Communicate with your lawyer proactively over the last couple weeks before closing, especially the last week before closing.
Ensure your lawyer has all the information and documentation needed for closing, including the deed, mortgage and loan payoff details, and current property tax bills. If an inspection was performed and repairs required, provide the repair information and those details to your lawyer. Be responsive to your lawyer’s calls and be on time when they need you to provide information or sign documents
Have all utilities been scheduled for cancellation?
Have all subscription and home delivery been rescheduled, or address changed (newspaper, Amazon etc.)?
Contact your doctor, dentist and other professionals about your move
Contact Canada Post about your move and address change
If moving outside of your area, don’t forget to contact your kids’ school and new school if required
Has the home insurance been scheduled for cancellation? Ask your insurance agent about when to schedule the insurance cancellation if the closing date changes or there are problems with closing. You don’t want your insurance to end when you are still in the home
Contact all of your banks, credit cards, utilities, cable, internet, government ID (drivers license, health card) etc. about your address change
Ensure your movers are on schedule
Is there any last-minute cleaning required for the home you are selling?
If you are a non-resident of Canada, you will need to have a certificate from Canada Revenue Agency (CRA) that you’ve paid the applicable taxes, your lawyer will advise you about those taxes
Do a final walk through of the home, including basement, closets, cupboards, dishwasher, fridge, stove etc.

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.

6. Home Closing: What To Expect

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.

Common Questions on Closing Day

These Questions Include

What should I expect on closing day?
What happens on the day of closing?
What do I do with my keys?
Do I need a survey?
Who contacts the utility companies?
Who contacts the property tax department?
How is my mortgage dealt with?
When can I expect my money?
What happens if the buyer can’t close?

For your information and convenience, we’ve outlined the answers within this section and throughout this guide.

Understanding Your Documents and Paperwork

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.

Essential Documents Involved in the Sale. These documents may include

The Real Estate Council of Ontario (RECO) Information Guide
Listing Agreement – Authority to Offer for Sale
Ontario Real Estate association (OREA) ‘Seller Property Information Sheet (SIPS)’
Agreement of Purchase and Sale
Agreement of Purchase and Sale Condominium
Buyer Representation Agreement
Buyer Customer Service Agreement
Confirmation of Cooperation and Representation
Seller Customer Service Agreement

The Sales Agreement Process

Understanding the Agreement of Purchase and Sale

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:

The home buyer will have their real estate representative assisting them with the finding, locating, and selecting the home they wish to purchase. They will also be involved in negotiating the home purchase.
The Buyer’s agent will prepare an offer to purchase and submit it to the Seller or his or her representative.
Once both parties have executed the Agreement, the signed agreement is then sent to a lawyer who is requested to complete the purchase.
Once signed by both parties, an agreement of purchase and sale cannot be amended without the consent of all parties.
Once the Agreement is signed, the final closing processes begin. All legal documents must be signed, and all payments must be paid out. In most cases, once all the closing details and transactions are completed, you will receive the keys to your first home before the end of the closing day. However, there could be factors that impact whether you get your keys at the end of closing day, these factors include mortgage funding, courier delivery of keys, online registrations completed.

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 – Final Processes and Activities

Closing day activities will be very active on or just before closing day.

Step One: Receiving Mortgage Funds

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.

A checklist and calendar representing the organization and planning of important tasks for a successful closing day in the home selling process. — .

Step Two: Verifying Closing Documents

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.

Step Three: Registering the Property

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.

Home Selling: What Could Go Wrong

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.

Understanding the Risks of Closing

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.

Surprise Costs and Misunderstandings

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 3^rd 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.

Preventive Measures for a Smooth Process

As outlined in our checklists, there are things the seller or buyer can do to help prevent these issues, such as:

Do your research and homework well in advance. Be prepared and ask lots of questions throughout the process. Make sure you understand the process
Know where all your documents are, get your paperwork in order and complete in advance of when they will be needed
Get your stakeholders involved early in the process (mortgage lender, real estate agent, lawyer etc.)
If you are buying, visit the property in advance of the closing day. Ensure you have those visits agreed upon in the sale agreement
Read all documents thoroughly and understand them

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.

Looking Ahead: The Role of a Lawyer

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.

7. The Role of a Lawyer with the Home Sale

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.

Role Summary

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:

Title Search and Transfer.Essentiality making sure there are no legals issues, claims, liens, with your property
Financial Transactions Management. Management and administration related to all home sale funds transfer. Receiving payments and ensuring the seller receives payment and all outstanding amounts are paid out, including legal fees and real estate commissions
Agreement of Purchase and Sale Review (see below). Review of this contract ensuring all terms and conditions comply with the sellers’ interests and all legal requirements
Legal Compliance. Ensure all real estate regulations complied with, and liens and taxes are paid
Discharge of the Mortgage. Your lawyer will ensure that your mortgage is properly discharged and paid off upon the sale of your home
Closing Documents Concluded. Preparation and closing of all related home sale documents, including statement of adjustments, financial details including taxes, utilities payments, and the home sale proceeds
Closing Day Activities. All documents are finalized, and the home title is transferred in a thorough and seamless manner.

Home Selling: Some specific areas of interest include:

Agreement of Purchase and Sale

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.

The Role of Your Real Estate Lawyer Will Include Specific Details, Including:

Initial introductions, including understanding your needs
Ensuring that any mortgages or lines of credit registered against the home’s property title are discharged and paid-out
Property fees collections, down payments, taxes, and disbursements paid out related to the property purchase or sale
If a private sale, provide transaction advice, negotiation of terms, preparing a sale or purchase agreement
Preparation of closing documents

Additional Services Your Lawyer Will Provide

Let you know about your closing costs in advance
Also process the mortgage funds from your lender
Deposit those funds in a trust while the deal closes
Discuss any other closing costs with you, including their fees and disbursements, and applicable title insurance

Recent Questions

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.

Understanding Risks and Rewards of Selling a Home Privately

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:

Potential Benefits and Rewards

Avoiding commission fees, which can lead to significant savings
No sales pressure from a real estate agent, or possibles biases which are not in the seller’s best interest
Control of the home sale process, including price setting, showings schedule, and home sale price negotiation
Negotiate directly with buyers
Seller can personalize marketing to fit their needs and comfort level

Possible Risks and Liability

Compliance with paperwork and regulations. Additional fees may be charges by other stakeholders due to lack of seller skills, knowledge or experience. Inexperience may take additional time and slow down the selling process.
Liability (regulatory and legal) related to errors or omitted articles/information, which could lead to significant financial exposure during the process, or after the sale. The real estate sale transaction is complex and involves contractual details and documentation which must be responsive,timely, thorough, complete and accurate.
The increased amount of time and effort related to selling your home.
Limited access to the wider audience and network resources (listings, staff, knowledge resources etc.), compared to a real estate brokerage. This lack of a broader audience may delay the selling of your home.
Over-pricing or under-pricing the value of your home, due to market value limited resources
Qualifying and weeding out questionable or uncommitted buyers who may or may not fit your profile, or buyers who may not be transparent about their integrity, honesty or credit worthiness.
Buying agents may neglect showing your home to potential buyers.
Lack of experience with negotiation tactics, low-ball offers, which may waste valuable process time.
Buyers may expect a lower price on your home if they know you are selling privately, this may limit the concept of saving on the real estate commission fee.

Final Thoughts

Only the home seller can decide whether the risk is worth the reward.

Considerations for Selling Privately

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.

Reporting the Home Sale to Canada Revenue Agency (CRA)

On October 3rd, 2016, the Canadian Government announced a change to the reporting requirements regarding the sale of a principal residence.

Understanding Principal Residence Exemption

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 3^rd, 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.

Additional Home Sale Price Tracking

Role of Your Real Estate Lawyer in Reporting

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.

CRA Data Tracking and Compliance

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.

8. Next Steps

Congratulations on reaching the end of this guide! We hope you found it informative and valuable in your home-selling journey.

Understanding the Home Selling Process

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.

The Value of Professional Support

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.

Preparing for Success

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.

Wishing You Success

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!

Sources and Additional Information

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?’