Whether you are downsizing, buying a bigger house, or moving to the opposite side of Canada, selling your house can be an emotionally challenging and time-consuming process. Not only does it mean letting strangers poke around your house, but you might also get low offers than you had expected.
Fortunately, this certainly doesn’t mean you are bound to have a frustrating experience or that you will have to sell your home at a low price. To make this process smooth and successful, all you need is some guidance to avoid pitfalls and attain the best possible price for your home in a short time period. Here are some crucial steps you must follow:
Step 1: Selecting a Real Estate Agent
Juggling your work, kids, and other responsibilities while also trying to sell your house alone is a recipe for disaster. Therefore, the first thing you need to do is to hire a real estate agent who can guide you throughout the home selling process and help you find a suitable buyer.
Keep in mind that you need an agent who is creative and not afraid to think outside the box in order to get potential buyers interested in your property. Moreover, opt for the one you are comfortable working with and who is willing to listen to you and help you understand all the steps involved in selling your house.
Step 2: Sign the Listing Agreement
A written contract between you and the agent (ME), the listing agreement highlights all the agreed upon terms of selling your house. I always recommend my clients to have the agreement checked by their lawyers to avoid any concerns and misunderstandings later on.
Typically, the listing agreement includes the payment and/or commission of the agent, the time duration of the agreement, and other details. Once you sign the agreement, the real estate agent will put your house on the market in the best possible way to attract potential buyers.
Step 3: Dealing with Mortgage
In case you still have mortgage on the house, it is essential to manage it. Often, the first option many sellers opt to explore is whether or not the buyer wants to take over the mortgage. In this case, you can avoid paying off the mortgage on the house sale and save money. Moreover, it is easier for the buyer to assume the mortgage instead of going through the process of getting mortgage approval.
The other option is, of course, to pay off the entire mortgage when you make the sale. However, various mortgages restrict homeowners to pay off the mortgage early on, and may also have a prepayment penalty.
In some cases, the lender waives off the prepayment penalty when the buyer is taking out a new mortgage with them or if you are taking on a new mortgage for your new house.
It is best to discuss your options with your lender or mortgage broker to determine which option would be best for you.
Step 4: Prepping Your House for Viewing
Your real estate agent (ME) will thoroughly view your house and recommend areas of improvements or repairs that can help in increasing the value of your home. Furthermore, before you open your house for viewing, I always recommend my clients to opt for a professional home stager to stage their home to make it more appealing to potential buyers.
Discuss this with your agent and professional stager to determine what you can do to enhance the aesthetic value of your property at a minimum investment.
Keep in mind that you are obligated to disclose any faults and defects your house might have to potential buyers. This includes material latent defects, which means the issues which might not be detected in a house inspection.
This includes any defects, which might be potentially hazardous to the occupants, including a leaky basement during rainy seasons, structural damage, or any other issues. Neglecting to disclose the material latent defects can result in legal issues.
Step 5: Going Through the Offers You Receive
Once potential buyers start viewing your house, you will receive an offer to purchase. This contract includes the terms of sale from the buyer. Once this offer is signed, it legally binds the sale and purchase of your house.
This offer will be extended to you through your real estate agent. In case you receive multiple offers, you have every right to go through them, discuss them with your agent and your lawyer to determine the best course of action.
You can always make a counteroffer if you want to make certain changes in the purchase offer. If the buyer accepts your counteroffer, it legally binds the sale and purchase of your house. If the counteroffer is not accepted, then it means no agreement has been made.
Step 6: Closing Date
When an agreement has been signed between you and the buyer, both sides have to handle the legalities. The closing date is mentioned in the contract and on this date, the transfer of ownership is made to make the buyer the official owner of your house once the payment is made.
The buyer’s lawyer will prepare the documentation for the legal transfer of home ownership. It is highly recommended that your lawyer go through the entire document and act on your behalf in order to protect your interests. Your lawyer will:
- Check all the related documentation and paperwork presented by the buyer
- Help you in understanding all the terms and other concerns you might have
- Make sure the old mortgage has been legally handled and that you have no more obligations for paying the old mortgage
- Check that all the payments and transactions have been successfully made
- Help you in signing the transfer documents
The lawyers from both sides will verify all the details that were stated by the buyer and the seller, make sure all facts are right and in compliance with the legislation, and so on. The transaction of the sale is registered at the Land Registry Office. The transfer of ownership and the keys are then presented to the buyer on this day.
Selling a house involves various steps that you can’t possibly do alone and it is a major decision that impacts your financial future. Keep in mind that this process will take time; you are not going to find the right buyer immediately.
Therefore, have patience and you will surely sell your house at the best possible price. Your real estate agent (ME) and lawyer will play an integral role throughout the selling process and ensure that your interests are protected from beginning to end.