Seller Guide
Tools to help you get the most for your home
5 STEPS TO SELLING
Whether you are looking to downsize, upgrade, or transition to renting, here are the main steps along your selling (or re-financing) journey.
Step 1
Review Your Financial Plan
If you don't have a financial plan, there is no time like the present to get started. A financial plan will differ for each household based on the unique goals, motivations, and desires of those involved. For example, if you are about to retire, your personal financial plan needs to incorporate the various sources of income you will be living off, and how the sale or re-financing of your home may represent a good chunk of your retirement strategy.
By understanding and outlining your lifestyle goals, you can best determine what you need to do today in order to achieve them. If your aim is to raise capital to invest in a business, selling your house and moving into a rental may represent a viable solution. Alternatively, if you need more space to accommodate a growing family, you can sell your condo in Toronto and buy a handful of them, or simply one large detached home, in Sudbury. With the rise of remote work, these considerations are becoming more and more normal for realtors to discuss with their clients. Finally, you may want to stay in your home as long as possible, which can be successfully accomplished through re-financing.
For those looking to sell in the near future, or anticipating the need to sell in order to raise money or move to a different city, a review of your projected income, expenses, and cash available in savings, will serve as the basis for what your alternatives are and how they differ based on your next home and location. By doing so, you will be better prepared to put your selling plan into action.
Step 2
Upgrade Your Home in Advance
Some people are forced to sell their home urgently. This often results in the need to sell the home at a discount, due to the need to ensure a quick- and reliable - home sale. If you are not in this position and are merely considering selling your home, the best thing you can do is take steps to upgrade your property so that it can quickly be listed when market conditions are hot. Some examples of this include fresh paint, a kitchen or bathroom reno, or some outdoor landscaping to enhance curb appeal. By working on these projects ahead of time, you can ensure that you are ready to list your home when the time is right, which for sellers is when housing supply (i.e. months of inventory) is low and falling.
Keep Step 1 in mind at all times: any project to upgrade your home should fit within the context of your financial plan. Stay disciplined by outlining 1 or 2 "budget-approved" projects every year in order to avoid overspending on costly renovations.
Step 3
Keep an Eye on the Market
This is one of the fun parts of home ownership – keeping tabs on what the neighbours’ homes have sold for. Whether contemplating selling or merely passionate about real estate, staying up to date on recent transactions in your neighbourhoods of interest is a great way to educate yourself and understand what your home may be able to fetch under current market conditions. Thankfully, doing so has never been easier, with a variety of Canadian real estate websites providing current listings, market trends, and comparable sales. If you’d rather not do the browsing yourself, your realtor can provide regular updates on market temperature and when may be an optimal time to list your home, as well as notifications for comparable properties that have recently sold in your market.
Keep in mind that if you’re seriously considering selling your home, you should also be keeping tabs on what homes are going for in neighbourhoods you want to move to. If you’re planning to relocate cities, this can involve one market that is hot for sellers while the other market is more advantageous for buyers. Market conditions can change quickly, so staying on top of both the buying and selling side of things will ensure you are prepared to act when the time is right. As always, your realtor can take the lead with this, and while you may be selling your home with one realtor, you can always work with another realtor for the buy side of your home move. In fact, if you are interested in buying in multiple cities or neighbourhoods, you can sign agreements with multiple realtors so long as they exclusively support you for the specific location and property type outlined in your agreement with them. For more common misconceptions in Canadian real estate, check out our myths versus facts article here.
Step 4
Interview Realtors and Speak with your Bank
Whether you've already been working with a realtor or not, you've decided the time is right to list your home for sale and start viewing properties to buy. As the single largest investment most Canadian families will make in their lifetime, at this point, it's important to get as many professional opinions as possible. This can include your past realtor, a certified appraiser, other realtors that primarily work with listings, the bank, and private homebuyer networks. It should probably include all of them, but the main two are your bank and the realtor you will ultimately choose to list your home with.
When interviewing realtors, most will come prepared with a listing presentation that outlines comparable sales in your neighbourhood. Beyond that, your realtor should be able to discuss marketing strategy and all other important aspects of the transaction. When they are not the expert, good realtors will refer you to at least 3 qualified providers, such as mortgage brokers, lawyers, and movers.
The bank is essential for a different reason: re-financing. If you have significant equity in your home and are simply looking to buy an investment property, you can re-finance your mortgage to free-up equity to buy another property. This is the real way that people build wealth in real estate, but as always, any sale or re-financing needs to fit within the context of step 1: your personalized financial plan and lifestyle.
Step 5
List or Refinance Your Home
The main benefit of re-financing is that you get to stay in your current home while accessing cash to buy a business or investment property. Keep in mind that certain periods, such as the current one where rates have drastically risen, are not as optimal for re-financing as others. All things considered, if you decide to re-finance, your realtors supporting you on the buy side can help you use that cash to buy an investment property. For people in a different life stage, such as retirees, refinancing simply represents a way to stay in your home while accessing some equity to support regular expenses. In either case, re-financing can be great alternative to listing your home.
If you decide to list your home, your realtor will be the quarterback of the transaction, supporting you throughout the process from coordinating photography and staging, receiving and negotiating offers, and completing the transaction from offer acceptance to completion of conditions and closing. They will also be able to discuss your moving plan and provide support for your upcoming purchase or rental. If you are moving and your realtor is not familiar with the new market, they should still be able to refer to at least 3 realtors servicing the area.
Whatever decision you make, it represents an extremely important life change that can be stressful and intimidating at times. Your realtor can provide some hand-holding and guide you through the entire decision cycle, which often takes years. It's never too early to start making a plan, so best of luck and happy trails!
