How to Sell Your House Privately In Ontario
Comparative market analysis. Appraisals. Home inspections. Staging. MLS (Multi-Listing Service). Transfer papers. Closing costs. Commissions.
If you’re looking into how to sell your house privately in Ontario, you may be feeling overwhelmed. There’s a lot you need to know.
At the same time, the commission paid out to a real estate agent is usually 3-6% of a home’s sale price. That can add up to a considerable amount of cash. In 2019, the average home in the GTA sold for just over $800,000–meaning the commission could be as high as $48,000. Who wouldn’t be tempted to sell their own home to save that money?
The good news is that with time, initiative, elbow grease–and a good lawyer–it’s perfectly possible to sell your own home in Canada.
There’s actually a lot to do before listing your home. In the very preliminary stages, it’s time to:
- Start planning your own upcoming move.
- Start a file of documents that are pertinent to the sale.
- Get your home appraised or research its market value to help you set a realistic price.
- Find a good real estate lawyer.
Plan Your Upcoming Move
If you’re ready to sell your house, then you probably have some sort of moving plan in mind. How defined is that plan? Are you hoping to sell by a specific date? If your buyers are keen to move in quickly, what’s the earliest you can move? Do you intend to buy another home or will you rent? If you haven’t hammered out the specifics for your upcoming move, this should be your first step.
Having a closing date in mind can help keep you on track. Selling your own home requires a big time commitment. An ultimate deadline can help you set a timeline and stay focused to get everything done.
If you intend to purchase another home, it’s a good idea to get pre-approved for a new mortgage now. If you plan to begin your new chapter as a renter, start looking for rental properties in your preferred community and take note of renter requirements. Will you need a credit check or references? Are the rental rates in the area within your budget?
Once your home sells, there will be a rush to get your own move finalized before the possession date. Doing as much as you can ahead of time will help save time and stress later on.
Start a Paperwork File
Some documents are crucial to the selling process. As well, potential buyers will find it helpful to know things like current property taxes and utility costs. Start a file with paperwork that includes documents like:
- the property deed;
- mortgage papers;
- current utility bills;
- annual tax assessment; and
- any other pertinent documents.
Determine Your Home’s Market Value
The easiest and most accurate way to determine your home’s current market value is to have a home appraisal done by a licensed appraiser. If you’re planning to sell your house privately in Ontario, you can expect to pay about $350 to $500 plus HST for a professional home appraisal. A professional appraisal is often worth the cost since it adds credibility to your asking price.
However, to save costs, you can do the same sort of research as a licensed appraiser. Look at other properties that are listed for sale in your neighbourhood and compare things like:
- When the properties were built
- The number of bedrooms and bathrooms
- Square footage
- Lot size
- Any upgrades or updates that might affect a home’s value, such as a recent kitchen remodel, a new furnace, or a new roof.
Of course, everyone hopes to sell their home for the highest possible amount. But it’s better to competitively price your home. A competitive price will attract more interest and may result in a faster sale. As well, a lower listing price might spark a bidding war between interested parties.
Find a Real Estate Lawyer
When you’re selling your own home in Ontario, it’s crucial to have the assistance of a real estate lawyer. For you, as a seller, a real estate lawyer will:
- Draw up the purchase and sale agreement
- Determine the closing costs
- Hold the buyer’s deposit in trust
- Prepare the deed
- Make sure that your own obligations and any concerns around disclosure have been met
- Deal with the buyer’s lawyer.
If you haven’t previously dealt with a real estate lawyer, ask your friends and family for recommendations.
Preparing Your Home for the Market
Once you have your initial preparations in place, it’s time to get your home ready to list and show. This includes a thorough inspection, repairs, deep cleaning, and care in staging.
Inspect Your Home
It’s important to inspect your property or have a professional inspection done so that you can decide whether to undertake repairs and/or upgrades or simply disclose any issues to potential buyers.
For the most accurate and objective home inspection, hire an accredited member of the Canadian Association of Home and Property Inspectors (CAHPI). The cost will vary depending on where in Ontario you are planning to sell your property, as well as the size and age of your home. In most cases, a professional home inspection will cost about $300 to $500.
As with hiring a professional appraiser, having a professional home inspection adds credibility to you as a seller and supports your asking price. As well, most potential buyers will require a professional inspection before going ahead with the purchase. Having one done in advance can speed up the paperwork process once an offer has been submitted.
However, if you prefer to save the cost of a home inspection, you can certainly do it yourself. The fsbo.ca website suggests that you “try to objectively view your property first as an inspector, then as a prospective buyer. It might not hurt to invite friends and family to come over and objectively criticize your property. They will find things that you may have overlooked due to your over-familiarity.”
Repairs vs Disclosure
Once your home inspection is complete, you will know which repairs, if any, are needed. Completing repairs–whether they are minor or major–can make a substantial difference in how quickly your property sells and at what price. However, if you are working on a tight timeline or budget, you may choose to disclose any issues to potential buyers rather than fix them before the sale.
When you sell a home in Ontario, the law requires only that issues that are considered to be a “latent defect disclosure” be disclosed. These types of issues may make the home dangerous to live in and include:
- Structural damage
- A leaking or damaged roof
However, for your own peace of mind, you may wish to also disclose issues that need to be addressed but that don’t pose any danger, such as a faulty breaker switch or an aging furnace/air conditioning system.
Do a Deep Clean
The first step to making your home sparkling clean is to declutter. Channel your inner Marie Kondo and either get rid of your home’s clutter or pack it up and store it in a shipping container.
Once your home is clutter-free, deep clean it from top to bottom. Don’t just tidy. Polish light fixtures, wipe down walls and baseboards, wash windows, and use a toothbrush to get every corner and groove meticulously clean.
Stage Your Home
Staging should be done before taking photographs for your listing and before any showings. Staging helps make your home feel bigger, brighter, and more welcoming to everyone walking through. It’s well worth your time because staging can help sell your home more quickly and for a higher price.
If your budget doesn’t allow for hiring a professional stager, there are many things you can do on your own, including:
- Rearranging the furniture to make your home look larger and improve traffic flow.
- Setting the dining room table with your good china, cutlery, and linen to help people envision living in your home.
- Appealing to the olfactory senses with simple, natural scents like citrus, herbs, or pine.
- Replacing window treatments to let in as much natural light as possible.
- Setting out fresh flowers to bring the outside in.
Marketing Your Home
Since most people begin their house hunting online, well-composed, clear photographs, online private sales sites, social media, the MLS platform, and that old stand-by–the open house–are all essential tools in getting your home sold.
Taking Terrific Photos
Once your home is spotless and staged, it’s time to take photos. Take the best photos you can, paying attention to composition, lighting, and clarity. A piece at Trulia offers these tips:
- Landscape photos are best.
- Take advantage of bright, natural lighting.
- Take the highest-resolution photos that your device will allow.
- If possible, use a digital camera rather than a phone camera.
- Edit your photos by straightening, cropping, and brightening them.
In today’s online world, good photos are essential to attract buyers and sell your home quickly.
Listing Your Home Online
There are several places you can list your home online, including:
- Sites specific to home sales, such as Zillow, realtor.com/international, or HomeFinder.
- Private sale/want ad sites, such as Kijiji or Craigslist.
- The classified section of your local newspaper.
- MLS (Multi-Listing Service).
MLS is a group of services available to real estate agents, that allows them to share listings easily and widely with other agents. To access MLS, you will need to join (pay for) an online platform that assists with MLS listings. It is well worth the cost to do so since it’s the best way to get your listing out to buyers’ agents.
You may also find it helpful to list your home on various social media sites (like Facebook, Twitter, Instagram) and ask your friends/followers to share your listing.
Showing Your Home
Be prepared to arrange showings a.k.a. the open house. You want buyers to feel welcome and comfortable asking you questions about the property while they are there. You also want to present your home in the best possible light. To have the best showing possible, try doing these things:
- Arrange showings by appointment only, and at times convenient to you.
- Stage your home in the ways suggested above.
- Take pets to the neighbours’ or to a doggie daycare.
- Adjust the temperature to a comfortable level.
- Open all window coverings and turn on every light in the house.
- Think about leaving out small refreshments, like coffee, tea, chocolates, or wrapped candy, along with a note telling the buyers to help themselves.
- Provide paper print-outs or brochures that include important details about the house and your contact information.
Don’t leave while a showing is underway. The buyers may have questions for you. Make yourself available, but hang back to give the buyers plenty of room to check things out.
If the buyer is using a real estate agent or lawyer, their offer will cover all the legal issues that need to be addressed. However, as a seller, you should expect to see these things included in any offer:
- The price being offered.
- The amount of the deposit offered.
- The amount of the down payment.
- Any terms or conditions the buyer needs fulfilled to complete the purchase (such as the sale of their own home).
- Any inclusions or exclusions. For instance, the buyer may ask for certain household items to be included in the sale, like major appliances.
- The closing date.
- The period that the offer is good for, until it must be accepted or rejected.
Completing the Sale
Any offers should be taken to your lawyer. If you want any changes, such as voiding one of the inclusions/exclusions, or counter-offer a different purchase price, your lawyer will make the necessary adjustments. Once the changes are made, the offer is signed and returned to the buyer. If the buyer accepts, you’ve just sold your own home. Congratulations!
There is one last step to complete, though (not counting your own move!). Your lawyer will require the following documents to calculate the closing costs:
- Your most recent utility statements
- Your mortgage papers
- The property deed
- Your annual tax assessment
Selling your house on your own in Ontario can be a lengthy and complex process. But the cost savings is significant and it will be a learning experience for you. If you have the time and the energy to tackle a private home sale, it will certainly pay off in the long run.