Mortgage Basics #Home Buying

How to Sell a House in Canada: Complete Guide for Sellers


Selling your largest asset takes some preparation and research to ensure you make the best profit possible in a timely manner. Ensuring you effectively set your sale price and market your property are two of the main components to a successful sale. We’ve outlined the most important steps below to help ensure you experience an enjoyable home sale process – whether you’re upgrading, downsizing or deciding to rent moving forward.

Key Takeaways

  • When determining your home’s worth and setting the sale price accordingly, consider the property’s size, age, condition and main features, as well as comparable properties that have recently sold in your area
  • Hiring a Realtor to sell your home who’s experienced in your local market will offer peace of mind knowing they’ll sell your home as quickly as possible and for the best price
  • It’s important to take the time to prepare your home for sale. You want to make sure that potential buyers can picture themselves in your home. This means depersonalizing and decluttering as much as possible

Estimating the value of your home and setting the price

There are a number of key components that must be considered when determining your home’s worth and setting the sale price accordingly. This includes looking at the property’s size, age, condition and main features, as well as comparable properties that have recently sold in the area.

It’s important to find a good price balance since undervaluing your property may not result in an ideal profit, while overvaluing can keep it on the market too long, which may lead potential buyers to wonder what’s wrong with your home.

Of course, if you’re using a real estate professional to sell your home – especially someone familiar with your local market – they’ll be able to offer a recommendation for your listing price as well as reasoning for why this makes sense.

TIP: As a home seller, you can negotiate the commission with your agent. Since the commission makes up the largest portion of your selling costs, it’s always worthwhile to research and negotiate the commission of different real estate agents when selling a property

Costs associated with selling your home

Fees and commission 

Before you begin the process of selling your home in Canada, be sure to estimate, and budget for, the associated costs. Here are some fees for selling a house that you’ll want to examine further:

  • Real estate commission. These are the fees you pay, as the seller, to your real estate agent plus the buyer’s real estate agent for their services. The fees are typically calculated as a percentage of the property’s sale price, and often range between 3.5-5% (split between the two agents, although the buyer’s agent usually receives a minimum of 2.5%). There are also flat-fee commission structures available by some real estate companies. This is often a great way to save money since they’re usually cheaper than percentage-based commissions. It’s important to note, however, that the services offered with flat-fee packages are often much lower scale than commission-based professionals. For instance, you may be responsible for staging and marketing on your own
  • Sales tax on real estate commission. This can quickly add up, so be sure to include this in your selling costs budget
  • Real estate lawyer fees. These fees vary widely when selling your home as the more complex the deal, the higher your fees will be. It’s best to get several quotes before deciding which lawyer to use

Selling a house without a Realtor is one way to avoid commissions, especially if your property is in high demand during a hot seller’s market. But, of course, not using a professional also has its cons, so it’s important to know the risks (See: Selling your home privately below).

Mortgage prepayment penalty

If you break your mortgage contract early, your lender will charge a prepayment penalty. This can be especially expensive if your mortgage term still has a while to go. Your nesto advisor can crunch the numbers to see if breaking your current mortgage to sell your home makes the most sense.

Lenders also calculate these penalties differently. Most fixed-rate mortgages have a prepayment penalty that’s based on either three months’ interest or the interest rate differential (IRD). The IRD is calculated based on the amount that’s being prepaid, and the difference between your original interest rate and the lender’s current interest rate. Most variable-rate mortgage penalties are three months’ interest and don’t typically carry IRD penalties. The IRD penalties are often responsible for those news stories you hear about where Canadians are paying tens of thousands of dollars to break their mortgage. 

TIP: Ask about early payout penalties and how they’re calculated by the lender before even signing your mortgage contract. This knowledge could save you a lot of stress and money in the future

Moving costs

Hiring movers is the most stress-free way to move, but the costs can quickly add up depending on how long the move will take and how far the movers must travel. If, for instance, you have several large items to move as well as a lot of belongings, the moving company will send extra employees to help you move, which will cost more. 

Other things to consider that will increase your moving costs include:

  • The movers are also packing your belongings
  • overs will need to disassemble and reassemble furniture
  • Specialty items such as pianos

Planning ahead and getting several recommendations for, and quotes from, different moving companies will help you save money and also feel secure in having your belongings moved by these professionals. You’ll also want to ensure the company is legitimate and insured.

Selling your home with a Realtor

Hiring a Realtor to sell your home who’s experienced in your local market will offer peace of mind knowing they’ll sell your home as quickly as possible and for the best price. You also won’t have to worry about forgetting anything important that could result in a lawsuit. After all, selling a home is a complex process if you’re not experienced. 

While you could save a significant amount of money on real estate commissions by selling your home privately, you also must consider how well you’ll be able to determine the home’s value and listing price, as well as getting the home ready to sell with staging and marketing. You will, however, have to pay the buyer’s agent commission, which is often at least 2.5% of the sale price.

Selling your home privately

There’s no doubt that Realtor commissions make up the bulk of your home selling budget. As such, you may want to look into what it takes to sell your property on your own to save on paying selling agent commission, since you’ll still have to cover the buyer’s agent’s commission. This is known as a For Sale by Owner (FSBO) transaction, whereby the seller of a home lists and sells their property by themselves, without the services of a real estate agent. 

There are many tasks involved with selling your home on your own, including listing, marketing, staging and negotiating with the buyer/buyer’s agent, so it may be risky to consider this option if you don’t have experience with real estate transactions. You could also end up getting sued if the transaction doesn’t close properly.

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Required documents to sell your home

Before you’re ready to put your home on the market, you’ll want to gather several documents for potential buyers, including: surveys; deeds; tax receipts; transferable warranties; pre-listing home inspection report; and property renovation contracts. 

If you’re selling a property privately, you’ll also need specific paperwork for selling a house without a Realtor.

Preparing your property for sale

It’s important to take the time to prepare your home for sale. You want to make sure that potential buyers can picture themselves in your home. This means depersonalizing and decluttering as much as possible. 

Hiring a staging company is often the best solution for making sure your home is seen at its best. 

Other things to consider when prepping your home for sale, includes:

  • Performing needed maintenance such as fixing a leaky faucet or recaulking your bathrooms. You can also hire a handyperson to complete these tasks for you. Buyers want to see that the home has been well maintained
  • Painting. A fresh coat of neutral paint can work wonders for making your home appear fresh and clean. You can do this yourself or hire a company
  • Cleaning. Ensuring there are no dust bunnies or grime around your home will help it seem more appealing. You can do this yourself or hire a company

Many of the items above may be covered in your Realtor commissions to help get your home ready for listing. 

Frequently Asked Questions

Do I need to pay taxes if I sell my home?

No. When you sell your primary residence, you usually don’t have to pay tax. But if, at any point, the property was not your principal residence, you may have to pay tax on the capital gains made from the sale of the property. As always, it’s best to consult a tax expert if you’re concerned about paying capital gains on the sale.

What is a conditional sale?

A conditional sale occurs when a potential buyer makes an offer to buy your home on the condition that the offer can be withdrawn if certain terms aren’t met.

The three most popular conditions include if the buyer is:

  • Unable to secure mortgage financing
  • Not satisfied with the home inspection
  • Unable to sell their current property

Do I need a lawyer to sell a house in Canada?

It always makes sense to enlist the services of a real estate lawyer when selling your home, as it’s a complicated transaction unless you’re experienced in the process and sell homes often. A real estate lawyer will help you ensure that all contracts, agreements and deeds are carefully drafted, as well as take care of transferring the title to the new owner.


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