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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 are you selling your property?

  • Weigh the pros and cons of selling your property.
  • Find what motivates you to sell your property. 

Understanding your motivation to sell will also help you set a realistic time frame as well as the strategy you will most likely be using.

The following 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 or retirees

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

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

  1. When does your mortgage term end?
  2. What is your mortgage balance and what will it be at the end of your mortgage term?
  3. What is the penalty if you break your mortgage before term? Sometimes, the penalty is so severe, that it is wiser to wait for a date closer to the end of your mortgage term to sell your property.
  4. What are the closing costs?

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

How much will you be able to finance for a new home if you sell your property?

This step is ultra-important! With the new mortgage rules in effect since January 1st, 2018 in Canada, some homeowners are no longer capable of financing their next purchase or having to buy a new one 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 will have to sell your property before you can buy a 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 the effects the sale will have on your income tax.

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

Step 4:  Understanding the property market conditions

Market conditions affect home prices. You want to get the most out of your property and buyers want to pay as little as they can. Market conditions dictate who has the strongest negotiating position.

Are you in a seller, buyer 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 the seller the most negotiating power. This allows you to maximize your profits and minimize the time your home will stay on the market.

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

To strengthen your negotiation power, when 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 possible.

Step 5: Get your property documents ready.

If you are selling with a real estate broker or by yourself, you should have the following 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.

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

Step 6: Complete your own home pre-inspection.

Potential buyers will most likely do an inspection; sellers often opt to do their own pre-inspection also. 

Why should you do it? A pre-inspection can help you avoid surprises down the road. By knowing potential issues, it will help you better price your home according to its conditions, which may, in turn, help you sell faster.

Finding problems at the last minute can also delay your transaction. Always keep in mind that time is money! Furthermore, it will give you a chance to fix items that an inspector might flag to potential buyers. Repairing issues is often cheaper than negotiating with non-handy buyers.

Step 7: Complete home improvements

Preparing to sell your home typically takes some work. Whether it is by your own sweat equity or some professional improvements. Remember that not all improvements increase a home’s value.

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

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

  • Do smart improvements to increase your home’s 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 may also avoid wasting money on the wrong improvements.

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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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