How To Sell Your Home For Profit In Toronto – Quickly! [+FAQs]

Paperwork & Costs Involved In Selling Your Home In Toronto

‘A lot of paperwork’ doesn’t help anybody. We know. The 6-step process is condensed information for anybody who doesn’t want to go through the full guide. In the next couple of sections, we try to answer some of your more nuanced questions – starting with those around the paperwork and costs associated with selling a house in Toronto! 

What Paperwork Is Needed For Selling Your Own Home? 

In case you’re not good at handling your paperwork, you can easily have your real estate agent or lawyer overlook this part of the process. Regardless of whether you’re doing it or your agent is doing it for you, it helps to stay informed. Some of the most important documents that you need to be aware of in the home-selling process are:

• Listing agreement (a contract you enter into with your Realtor with stipulations governing the home sale)

• Seller’s disclosure (a document that a seller shares with potential buyers to share all that’s known about the unit upfront)

• Purchase agreement (a contract that the home buyer and home seller agree upon on closing)

• Property survey (a document confirming and defining the physical boundaries of a unit)

• Documentation of any repairs made or renovation (for appraisal and tax purposes)

• Capital gains tax form – if applicable

How Much Does It Cost To Sell Your House? 

Excluding the commission that your Realtor is entitled to and the amount that you choose to spend on home repairs or other renovations – the average costs associated with selling your home in Toronto is between $10,000 – $12,000. This includes expenses such as home inspection, staging fee, listing fee, legal fee, cleaning expenses and moving expenses.

When you list with us, we take care of some of these major costs, most notably the cost to stage your home which can range from $5000-$10000 depending on how large the home is.

That’s the gist of it. In case you’re interested in the finer details, we have an entire blog on the cost of selling your home or condo in Toronto.

How Much To Set Aside For Legal Fees When Selling A House? 

Because legal fees can mount up quickly, it may be preferable to employ a real estate lawyer for select aspects of your real estate transaction (such as contract and title review). A good attorney will cost you anything from $150 to $500 per hour, depending on who you choose. You can also engage attorneys for particular services on a flat-cost basis. When selling a home, this might cost anywhere from $800 to $2,000. Where you live, and your specific circumstances will determine whether or not you seek an attorney.

Most real estate transactions will benefit from the assistance of a competent real estate agent during the search, negotiation, and closing phases. In most situations, that agent should be able to assist you with all of the legal aspects of selling your property and find you a wide pool of possible purchasers. However, as previously said, you may wish to engage a real estate lawyer to help you with your paperwork and review the final deal before closing it. Paying a few hundred dollars to have an attorney go through all of the fine print in the final agreement may be worthwhile. After all, no one wants to end up in court over a house sale disagreement.

In case you don’t know where to look for the right lawyer, we regularly work with someone great, just ask us for a referral.

Is It Worth Renovating Your Home Before Selling It? 

Many homeowners wonder, when it’s time to sell, if they can receive more money for their property if they remodel it beforehand. Homeowners are aware that amenities such as contemporary bathrooms and kitchens with energy-efficient appliances appeal to purchasers. The fact is, certain upgrades will never increase the value of your house enough to pay for themselves. You must be smart about the home improvements you make in order to achieve your objective of making more money or selling your house faster without incurring additional expenditures. 

Simply put, sometimes! Your realtor should be able to run the numbers and look at market comparables to give you the facts on what you could likely sell for with and without those upgrades. Renovations can be a lot of time, money and energy so you’ll want to make sure it’s worth it.

Another reason individuals are afraid to renovate their house before selling is the belief that it would take too long, which isn’t always true. When many projects may be completed at the same time, experienced teams can make it an efficient and quick procedure.

Related: Move Or Renovate: Pick What’s Best For You!

Timing Is Gold When Investing In Toronto’s Real Estate Market 

When Does House Selling Season Begin In Toronto?

Historically, May has been the greatest month to sell a home, but in recent years, that has shifted to March. Homes advertised between March 11 and March 18 in 2019 sold the fastest. Keep in mind that irregular data from 2020 was removed. This year, with what many people are considering a ‘tough year for real estate’ I actually think now, in Q1 might be the best time to sell. The lack of inventory coupled with the BOC’s announcement of possible rate halts has buyers coming off the sidelines, together this has resulted in real estate bidding wars and stronger sold prices.

It’s also crucial to keep in mind that local market conditions have an impact on the ideal time to sell your home. Job growth, mortgage rates, and tax benefits are among the prerequisites. If you list your home on a Thursday, you’ll have a better chance of selling it faster and for more money.

All factors being equal, homes listed on a Thursday typically go pending faster than any other day of the week. In a market where homes generally sell in seven days, the difference is significant. Homes that are listed on a Sunday stay on the market for an average of eight days longer than those that are posted on a Thursday. Saturday and Monday are only modestly better than Sunday; placing a property on the market on each of those days takes an average of seven days longer to sell than putting it on the market on Thursday.

According to Zillow’s data, properties listed on Thursday are 1.5 percent more likely to sell above list, while those posted on Saturday or Sunday are 1.3 percent less likely to sell above list.

When Is The Best Time To Sell A House?

There are certain advantages to listing a home for sale during off-peak months. The greatest time to market your property may possibly be while other sellers are busy at the cottage or getting ready for the holidays. Properties that are posted between August and December, when there are often fewer homes for sale, have a chance to stand out. A speedy sale at market value pricing can be achieved with less competition from neighbours and eager off-season purchasers.

With that being said, there’s a reason why Spring & Fall are the busiest months for house sales. The holidays will be done by the time the spring market opens. Life is less busy, and the new year has given a sense of rebirth to purchasers who are ready for a change. Not only that, but the warmer weather makes house hunting more enjoyable, inspiring people who want to get started. Simply said, buyers tend to flood the market in the spring, and they’re eager to buy!

According to the experts, the sheer amount of house buyers might increase the likelihood of a listing receiving several bids, while fierce competition could drive up prices. 

Autumn also offers “some fairly amazing perks” for Toronto property sellers. Buyers are eager to find their dream houses at this time of year. The summer vacations and cottage getaways are done, and families are settling back into the school year. Home seekers will have more time to focus on buying — and planning a significant move – now that the routine has returned.

Related: Best Time Sell Your House In Toronto In 2023: Spring & Fall

Do You Need To Wait Before Selling Your House? 

Whatever the cause, everyone has the right to sell their home, regardless of when it was purchased. In fact, homeowners may place their property on the market the day after receiving their keys. There are a variety of reasons why someone may desire to sell their home after purchasing it. They might be divorcing their common-law partner, losing their regular income, having to relocate for work, or discovering that they despise their new neighbourhood. 

Life does not always go according to plan. While the majority of individuals want to stay in their newly acquired houses for a long time – in some cases, forever! – some people find themselves in the position of having to sell their houses not long after they purchase them. 

Why You Should Not Sell Your Home Immediately After Purchasing It?

Although it is feasible to sell a property after purchasing it, there are several disadvantages to doing so – including the near certainty of financial loss. Below are some of the other reasons why I believe it’s not a good idea to sell your home immediately soon after purchase: 

• Contractual obligation of mortgage: When buying a property, a borrower and a lender enter a sacred contract known as a mortgage loan. This contract has several limitations, some of which can be violated if the owners sell their homes soon after the acquisition. Some banks and mortgage lenders include clauses in their contracts that state that a homeowner cannot sell their property within a specific amount of time following purchase. Many mortgage lenders add these rules because they don’t want to miss out on years of interest payments. 

• Risk of having mortgage prepayment penalty imposed: Some homeowners may be in violation of their mortgage arrangement if they sell their house too soon. A mortgage prepayment penalty applies to a homeowner who sells their house before they are legally permitted to do so under their existing mortgage arrangement. This cost varies based on how the mortgage lender calculates the fine, but it often ranges from 2 to 5% of the remaining loan balance. If you are a first-time homeowner who has not yet paid off your mortgage, this might be a significant sum. Individuals who purchased a $500,000 house with a 5% down payment may be required to pay $23,750 in mortgage penalties. Although time-limit restrictions in mortgage contracts are uncommon, they may be incorporated in any mortgage deal. Sellers should read their home loan terms carefully and speak to their mortgage broker before listing their homes for sale, or they might lose a lot of money.

• High closing costs: Land transfer taxes, legal fees, realtor fees, and other associated selling charges must be paid by those who sell their home. Selling a home, like buying one, may be pricey. These fees could add up quickly, especially if you just paid the closing costs when you bought the property. Due to the closing expenses connected with selling a home in the same year that it was purchased, homeowners who sell their home in the same year that they acquired it will almost always lose money.

• Capital Tax: When a home is sold, the seller must evaluate how much capital gains tax they will owe. In Canada, capital gain is one of the three types of revenue. It’s the profit you get when you sell an item or assets that have appreciated in value throughout the period you’ve had them. Homes, companies, antique sports cars, and other assets are instances of taxable capital gains. The Canadian government has imposed a tax on capital gains gained because people may make a lot of money selling these assets. Sellers must pay tax on 50% of their capital gains, with the percentage changing depending on the circumstances. Because of the main residence exemption under the Canada Income Tax Act, many sellers don’t have to pay capital gains tax. However, several media believe that the Canadian government is considering repealing this tax measure and requiring sellers to pay capital gains tax on all homes sold, not just second homes. Despite the fact that this modification has been considered, it has not yet been formally implemented. This implies that they can avoid paying capital gains tax by selling their principal dwelling tax-free. Investors in real estate aren’t as fortunate as primary homeowners. The cost of selling your property early might be increased by capital gains tax. Real estate investors are not excluded from capital gains tax; therefore they must pay it on the sale of their second homes. This means that investment properties sold less than a year or a few years after they were purchased are still subject to capital gains tax. The tax rate is calculated using the purchase price of the investment property, the sale price, any selling expenditures, and the seller’s income. Sellers should expect to pay capital gains tax if the property is sold for just a little more than it was originally purchased for. Sellers who do not earn a profit on their investment property will suffer capital losses or a reduction in their net worth.

If you’re considering offloading an investment property that you just purchased you’ll want to consider whether or not the sale will be categorized as ‘flipping’ which imposes higher taxes. Give this blog “Flipping Condos: What you need to know” a read if so.

When submitting a tax return, those who have capital losses should obtain advice from a tax specialist. Capital losses must be declared on a tax return because they influence a person’s tax burden and can be used to decrease taxable capital gains for a period of three years. While a person may have lost money by selling their house, they may be able to use that loss to avoid paying further taxes in the future.

Other Frequently Asked Questions [FAQs] On Selling Houses In Toronto

How To Find The Selling Price Of A House In Toronto?

Speaking with a local realtor is one of the simplest and most effective methods to learn the value of a property sold in your neighbourhood. You may also use a popular app to view sold house data, while it was not widely disseminated in Canada until recently you now need to simply register on a popular app or website to gain access to this gated information.

Realtors have up-to-date information on how much a property sells in their region. And you’ll be shocked to learn that many of them are eager to offer this information in order to entice potential purchasers.

The nicest part of working with a local realtor is that they have up-to-date information on the transactions they have completed. As a result, the values they offer you will be a reasonable representation of current market rates. Also, because a realtor has contacts with other realtors, it is simpler for them to obtain information about houses that have recently sold. For example, the list price + offer date can often equal a much different sold price. An important understanding you may need a Realtor to help navigate.

Local real estate agents also have access to the Multiple Listing Service (MLS). Read more about how to read an MLS listing.  This is a database that real estate brokers use to advertise homes and assist buyers to locate available houses. They also utilize it to exchange sales information. So, if you’re wondering how to find out how much a property is worth, simply go to a local real estate agent and give them the address of the home you’re interested in.

There are online tools that provide purchasers with information on the real estate market. These websites will usually include a function that allows you to zoom in on a certain area or neighborhuood. This may be a map or an address lookup tool.

Simply type the address of the house into the search box to get the most current home selling price on these sites. This is all the data you require. If you don’t know the exact address, several websites will let you look it up on their pages.

The property will open on its own page once you’ve put the address into the search box. A synopsis of the property will be provided. If the property is still on the market, this contains the most recent sale price as well as the current listing price.

Can You Sell Your House For More Than The Appraisal Amount?

The simple answer is that you may sell your house for any price you choose as long as both you and the buyer are willing to bear the financial repercussions.

The issue with selling your house for more than the evaluated worth is that banks and other lenders will only lend up to a specific amount, not more than the appraised value of the bank. In your instance, the simple solution is for the buyer to cover the difference with cash in the down payment.

Remember, with cash, everything is possible. It’s the financing that’s the problem.

Can You Sell Your House During A Divorce?

A stipulation that becomes a court order is the simplest method to sell your house during a divorce. A stipulation is a written and signed agreement between you and your spouse that governs key aspects of the property sale, such as:

• The real estate agent should be chosen carefully.

• How do you decide on a home’s price?

• If required, how may the price be reduced?

• Who will be the point of contact for the real estate agent?

• Is it necessary for both spouses to formally approve proposals and acceptances?

• Which partner will make sure the house is presentable?

• Whose part of the home’s sale proceeds will be used to pay off any liens or encumbrances?

Consult an attorney or a mediator for assistance in drafting a stipulation. A stipulation is an ideal method to sell your house during a divorce since it satisfies both parties while avoiding additional litigation. Not every couple, however, will be able to agree on a condition for selling the house.

If a stipulation isn’t possible in your circumstances, you might petition the court to order the residence to be sold. If you have a solid cause, you can do this before your divorce trial rather than waiting until the conclusion of the divorce. The danger of foreclosure or the need to utilize the money to pay attorney’s fees and costs are common reasons that courts will accept.

Read More: 10 Tips To Help You Sell Your House During Separation

Can You Sell A House In Foreclosure?

Yes! If you’re facing foreclosure, you have the option to sell your house until the mortgage lender sells it at auction. In Canada, however, foreclosures are very rare.

When a mortgage lender exercises its right to sell a property on which the owner has defaulted on payments, the property is called a foreclosure. Before selling the property, the lender offers the homeowner a period of time to make payments or alternative arrangements.

The property will subsequently be auctioned off by the lender. The Sale notice must be publicized for four weeks before the auction, giving the homeowner time to sell the property, refinance it, make all outstanding payments on it, arrange a loan modification with the lender, or file bankruptcy.

After the mortgage lender sells a foreclosed property at auction, the homeowner has a redemption time (usually between six months and a year) to pay the lender in full and keep the house. So, unless you pay the mortgage lender all you owe them after the Sale, you no longer own the house and can’t sell it.

Can A Seller Stay In The Home After Closing The Sale?

No, a seller cannot stay in the house after closing. If a seller wants to remain in the home after closing, the buyer and seller should have a formal agreement outlining the parties’ expectations regarding post-close possession.

After closing, a seller may want a day or two, or perhaps a week. When this happens, a portion of the purchase money (usually a daily fee) is deposited into an escrow account and kept until the seller moves out as agreed and leaves the house in the condition specified in the contract. If the seller fails to evacuate on the agreed-upon date or leaves the property in a damaged state, the money held in escrow can be paid to the buyer as a penalty or used to repair the property.

Don’t sign the final closing paperwork if you haven’t already. You lose leverage once you shut. At that moment, the sellers hold both the cash and the house. Agree with the seller on a post-close move-out date and keep some of the closing monies escrowed until they’ve completed their half of the bargain.

Final words

Now you found answers to the most common questions that homeowners in Canada get. Keep these answers in mind and go ahead with selling your house to receive the best results. 

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