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7 STEPS TO PREPARE YOUR HOME FOR SELLING

By Thanh Phong Trieu | Sell

Mar 17
sell your house Montreal
[Reading Time: 8 min]

These steps should be done at least 2 to 3 months prior to putting your property up for sale

Step 1: Why do you sell your property?

  • Weigh the pros and cons of selling your property.
  • Find your motivation for selling your property. 

Understanding your motivation to sell will also help you set a realistic time frame as well as a strategy you will most likely need to use. These are the most common reasons why you would sell your property:

  • For health reasons
  • To liquidate a succession
  • Financial problems
  • Moving away from school, new job, loved ones, etc.
  • Going through a personal/business separation
  • Upgrading to a bigger property because of a growing family
  • Downgrading to a smaller property for empty nesters

Step 2: Is it financially reasonable to sell your house?

    Your banker will be the right person to answer all the below questions:

  1. When does your mortgage term end?
  2. What is your mortgage balance now and at the end of your mortgage term?
  3. What is your penalty if you break your mortgage now? Sometimes, the penalty is so big that it is wiser to wait until it’s closer to the end of your mortgage term to sell your property
  4. What are all your closing costs?

For those who want to sell their property to buy another one, you should also ask your banker two more questions:

How much can you afford to buy if you sell your property?

This step is ultra-important! With the new mortgage rules that started since January 1st 2018 in Canada, some homeowners are no longer capable of financing their next purchase. For others, they would need to buy at a much smaller price range.

How much can you afford to buy if you keep your property?

This will indicate if you are financially able to buy a new property without selling your existing house. In other words, are you capable of financing two mortgages at the same time? If you cannot, you have to sell your property before you can buy the new one.

Step 3: Contact your tax expert

If your property isn’t your principal residence as defined by the Canada Revenue Agency, there could be significant tax implications. It would be wise to talk with a tax expert or an accountant to find out what effects the sale will have on your income tax.

Note: since 2016, Canadians must report the sale of their principal residence on their income taxes.

Step 4:  Understanding the property market conditions

Market conditions affect home prices. You want to get as much as you can for your property and buyers want to pay you as little as they can. The market conditions dictate who has a stronger negotiating position.

Are you in a seller’s, buyer’s or balanced market?

Ideally, you want to sell in a seller’s market, which occurs when there are more buyers searching for homes than there are homes available. Under this market condition, it gives you, the seller, the most negotiation power. This allows you to maximize your profits and minimize the time on the market.

Are you in a high or low season to sell your property?

To strengthen your negotiation power, if possible, take into consideration putting your property up for sale at the right cycle. In other words, identify the best time of the year to sell your property to get the most money as possible.

Step 5: Get your property documents ready.

No matter if you are selling with a real estate broker or by yourself, you should have these documents ready. Missing documentation could put your transaction at risk and create unnecessary closing delays.

DocumentsUndivided condoDivided condo4plex & less
Certificate of location*xxx
Seller’s declarationxxx
Last municipal taxes statementxxx
Last school tax statementxxx
Declaration of co-ownershipxx
Financial statements (1-3 years)xx
Board meeting minutes (1-3 years)xx
Lease(s)If applicableIf applicableIf applicable
Renovation invoice(s) & warrantiesIf applicableIf applicableIf applicable

Other important documents can also be required depending on the situation. Make sure you have them ready too.

* The certificate of location must be up to date and less than 10 years old. If not, the seller must provide a new copy. In average it takes 2 to 3 weeks to get a new one.

Step 6: Complete your own home pre-inspection.

While your buyer will most likely do an inspection, sellers often opt to do their own pre-inspection also. Why should you do it too?

A pre-inspection can help you avoid surprises down the road. By knowing the issue, it will help you better price your home according to its conditions which may help to sell faster.

Furthermore, it gives you a chance to fix the items that an inspector would flag for a buyer. Often, repairing the issue would be cheaper than negotiating with a non-handy buyer. Finding problems at the last minute can also delay your transaction. Time is money!

Step 7: Complete home improvements

Preparing to sell your home typically takes some work, whether that’s your own sweat equity or some professional improvements. Not all improvements increase your home value.

Take time to understand what buyers are looking for and think about which renovations will appeal to most of them. Also, knowing the market conditions can influence what renovations you do. Spend wisely!

A good realtor should know exactly what buyers are looking for and advise accordingly. Here are some of the visual aspects you should look and see if improvements are needed:

  • Do smart improvements to increase its value
  • Paint interior rooms neutral colours
  • Replace outdated lighting fixtures and window treatments.

Note: You can also skip this step by avoiding improvements and selling as-is. While you will likely pocket less money in the end, selling a home as-is, is a way to speed up the overall sale process and limit upfront out-of-pocket costs. You’ll also not waste money on the wrong improvement.

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About the Author

With my extensive background in finance, work experience and my love to share my knowhow, I have been able to make the most novice clients become a smarter and savvier buyer, seller or investor.

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