Home sales in Canada are doing gangbusters, with a record-setting 714,516 units sold in December 2020, according to the Canadian Real Estate Association. Clearly, more Canadians than ever are in a “sell-my-house” mindset, and buyer demand for homes remains strong. If you’re considering putting a property on the market but aren’t sure how to sell a house or need to brush up on the basics, we’ve got you covered. Our step-by-step guide to selling a house will help you minimize your stress and maximize your profits.
Step 1: Choose how to sell your home
There are three basic methods for selling a house:
Hire a traditional realtor
A real estate agent will help you set a realistic selling price, advise you on which repairs/upgrades may be required to get the best offer, market the property (including preparing a compelling listing with good quality photos or videos to post on the Multiple Listing Service), show your home to buyers, negotiate the sale, and handle the paperwork on your behalf. This service typically costs 2% to 6% of the sale price (which also covers the commission paid to the buyer’s agent) and comes off the top of your proceeds from the sale.
Sell it yourself
There is no legal requirement to use a realtor when selling a house, so if you’re prepared to do all of the above tasks on your own—and incur any related costs, such as the MLS listing fee—you can save on the commission you’d pay a sales agent. Of course, you’d still need to pay the fees of the buyer’s agent (about 1% to 3% of the sale price) unless you happen to find a buyer who is also forgoing the use of an agent. Furthermore, you’ll miss out on the expertise that a professional can provide throughout the process to ensure you get the best price and a problem-free sale.
Use an online real estate brokerage
Online real estate brokerages, such as Purplebricks for example, match you up with a professional realtor in your area and offer many or all the same expert services as a traditional realtor, but with significant financial and/or strategic advantages. Fixed-fee online real estate brokerages charge a flat commission for selling a house, rather than one based on a percentage of the sale price.
Another interesting online model comes from Canadian PropTech Properly — a real estate brokerage that offers a streamlined selling experience. It guarantees to sell your home within 90 days of listing for at least a minimum fair-market price. This allows you to secure financing to buy and move into a new home before listing your current one, which removes the timing and budgeting guesswork from your purchase. Even better, it eliminates most of the inconvenience involved with selling a house, since Properly will wait until after you move out to professionally clean, furnish, stage, shoot and show your home to get the best price on the market. All this added value comes with fees comparable to a traditional realtor (5% of the sale price, half of which goes to the buyer’s agent).
The method you choose to sell your home will have a substantial impact on how much effort (if any) you’ll need to put into the remaining steps outlined below. So, we’ll be sure to differentiate, as needed.
Step 2: Set a price
A realtor who does a lot of business in your neighbourhood will be invaluable in helping you set a price. That’s because they’ll have detailed knowledge about the types of homes in the area, how much they listed/sold for recently and in the past, and what type of buyers you can expect to attract at various price points. If you’re not using a realtor, take a look at the prices on current listings for nearby properties, and be sure to check how long they’ve been on the market. (The longer a property has been on the market, the less likely it is a buyer will offer the price listed.) You could also consider paying for a home appraisal.
Take note, however, that experts say it’s much better in the long run to underprice than to overprice. If you underprice, you’ll likely generate extra interest in your listing, which often leads to a bidding war with offers that exceed your expectations. If, on the other hand, you overprice and you don’t have any suitable takers, that information will remain in the MLS archives, and agents may advise buyers to be wary of your property or lowball any offers.
Step 3: Handle necessary repairs or upgrades
Necessary is the keyword in this step, as it’s imperative not to get carried away. An agent will be able to advise you on which repairs are most likely to affect your home’s sale price and can recommend service providers to complete the work. In general, though, it’s small, cosmetic details that will either entice or scare away potential buyers.
So, for example, add a coat of paint to worn walls or a weathered front porch, fix any leaky faucets or toilets, freshen up the bathroom and kitchen grout, test all doors and windows to make sure they open and close smoothly, and make sure everything looks clean and in good repair. (If you hire a realtor through Properly, they will take care of such handy work for you after you move out, at no additional cost.)
In terms of larger upgrades or remodelling, experts say modifications to the kitchen or bathrooms are most likely to pay off with higher offers. But you can also quickly update these rooms by painting the cabinets and swapping out their hardware. Just be sure to stick to neutral colours as these will appeal to the greatest number of buyers.
If there are any repairs or upgrades you made recently, such as replacing the roof, pull the paperwork to show prospective buyers. And if there are any potential health issues with your home (e.g., mould), you must either fix or disclose them or you could jeopardize the sale.
Step 4: Make your home as attractive as possible to buyers
Also known as staging, this step can range from a basic deep clean of your home to major decluttering and deodorizing to even temporarily removing some pieces of furniture (and all traces of pets!) from the property.
The idea is to allow buyers to imagine themselves living in the home, so the more of your “self” that you can remove from the premises, the better. Aside from getting everything spick and span, make sure all your closets and cabinets are organized and tidy. Remove personal photos and replace with art or other visually appealing objects, if necessary. Clean the windows and add lamps or other lighting to brighten the space. Add curb appeal to your home’s exterior with floral planters and a new mailbox to make a good first impression on buyers.
Some realtors include staging when selling a house, while others may recommend a professional stager for you.
Step 5: List and show the property
If you’re selling a house on your own, you’ll need an outstanding listing to draw the attention of buyers and their agents who may be wary of an unaffiliated property. That means high-quality photos that showcase your home in its best light—literally, in the daytime—so buyers can see exactly what’s on offer. Many listings now also including a “virtual tour” using 360-degree imaging. If you’re a good shot, you can do this yourself using a smartphone; otherwise it may be worth hiring a pro.
The text portion of the listing should not only include all the requisite details about the number of rooms and their dimensions, but also any special features to the property (e.g., energy-efficiency) or area (e.g., proximity to amenities, highways and public transit). It should also indicate the dates of upcoming open houses and when you will begin accepting offers.
When your listing is ready, you’ll need to pay a fee to post it on MLS (or an agent will do this for you). You can also market it through your own social media channels or through other real estate sites, if you like.
But choose your timing carefully; some months are slower than others and holidays can affect buyer behaviour. Generally, the spring is the busiest time for home sales, as buyers want to close/move during the summer when the weather’s good and while their kids are not in school (especially when moving from one school district to another).
Once your listing is public, you can choose to hold open houses and/or allow private showings. It should go without saying that any reputable realtor will handle all of the above for you, since listings and showings are the nuts-and-bolts of selling a house.
Finally, it’s a good idea to gather any important documents that may help inform and assure potential buyers who view your home. These include:
- property tax receipts
- renovation contracts
- transferable warranties
Some sellers even go so far as to pay for a home inspection, and provide the inspector’s report for buyers to review, so they feel more comfortable putting forward an unconditional offer.
Step 6: Consider offers and negotiate the sale
Sellers generally stipulate a specific date and time when they will begin accepting offers, with the hopes of being able to compare multiple offers at once. (You may receive a so-called “bully” offer before the date specified. If it’s a good offer and you decide to accept it, you will never know if other potentials buyers may have offered you a higher price if you had waited until the offer presentation date.)
When an offer comes in, you can accept it, reject it, or make a counteroffer—for example, you might ask the buyer to drop any conditions included in the offer, or to change the closing date. (A conditional offer means the buyer is agreeing to the purchase at that price only if certain conditions—such as a satisfactory home inspection, financing, or the sale of their current property—are met.)
You can negotiate with only one buyer at a time. So, if you receive multiple offers and you’re not prepared to accept any of them as-is, you could make a counteroffer to the buyer who comes closest to your desired price and conditions to see if you can agree on terms. If not, and the offer is rejected, you can then enter negotiations with one of the other buyers.
Offer negotiations can involve a great deal of back and forth with prospective buyers, so the experience of an agent who understands the process (and which tactics tend to be successful) can be extremely valuable.
If you don’t receive any offers that meet your expectations, you can leave your house on the market and hope that someone else will eventually come forward with a better offer. As mentioned in Step 2, however, waiting too long can backfire on you. This can make Properly’s services particularly enticing, as they guarantee that your home will sell within 90 days for at least an agreed-upon minimum price, if not more.
Step 7: Complete the transaction
Once both parties have reached an agreement, the transaction is finalized with a formal contract, and the buyer provides a deposit.
On the agreed-upon closing date (typically 30, 60 or 90 days after the contract is signed), the transaction is recorded with the Land Registry Office and a deed is issued to the buyer, who becomes the new owner of the property, and the seller receives the balance of the funds owing.
Financing options for sellers who are also buyers
If you are a seller who is also buying another property (as opposed to moving to a rental), there can be timing issues regarding financing. Because you must come up with the down payment on your purchase on that property’s closing date, you may require a bridge loan if the closing on your existing home is scheduled for a later date. A bridge loan allows you to use the equity in your current home to pay for the down payment on your new home. The problem is, lenders typically won’t extend a bridge loan to sellers until they have a signed contract from a confirmed buyer.
Properly solves this problem by providing a “sale assurance” — that minimum sale price guarantee — which lenders will accept in place of a signed contract to qualify for a bridge loan. This allows you to find, buy and move into your new home before even listing your current property.
Selling a house can be a complicated and emotional endeavour. After all, you’re not only selling your home, but also your most valuable asset. First-time sellers, in particular, would be wise to use the services of a realtor—either through a traditional or online brokerage—as they best understand how to sell a house for maximum profit while avoiding any pitfalls. Those looking to bypass the inconvenience and stress involved with cleaning, staging and showing their home should consider Properly, which allows you to secure the financing required to buy and move into your new home before listing your existing one.