Selling Tips

Selling your property? Thinking about it? Well, if you haven’t been in the market for awhile, you’re in for a pleasant surprise: chances are, your home has appreciated quite a bit since you bought it. BUT, while your property has likely appreciated considerably, choosing one Realtor over another can mean the difference of several hundreds of thousands of dollars. That is not a hyperbolic statement: I can point you to a few examples of an ineffective selling strategy that contributed to a lower selling price than the market could bear. And that decision not only hurts that seller, but it hurts neighbouring sellers by giving buyers a comparable that can create a meaningfully negative ripple effect. That’s why it’s so important to be informed before you choose a Realtor. And that’s why I created HOSSOPOLIS.

Selling a house is a momentous decision for most people, owing to the financial, emotional, and situational consequences, be they positive, negative, or a bit of both. Toronto has enjoyed a seller’s market for a decade with no signs of abating, despite the many self-professed prognosticators. This has also led to a period of historic prosperity for real estate professionals and adjacent businesses (designers, movers, stagers, architects, builders, appraisers, banks, insurers, landscapers, HGTV, and I guess IKEA). There has also been unprecedented growth in real estate membership as many people seek to participate in the always-hot Toronto market, seduced by the specter of high commissions on homes that sell themselves. These factors, among others, have contributed to even wider variation in the skills, experience, and capabilities of real estate professionals, with unambiguous implications for buyers and sellers. While it’s true that the demand for housing in most Toronto neighbourhoods and for most build-forms exceeds supply, and it’s also true that most homes on the market sell quickly, it is not true that this seller’s market guarantees you will get the maximum price possible for your home. The quality of your Realtor can mean the difference of $500,000 on a detached home in Toronto. Truly. Quality is also not a function of awards, sales volume, or days on market. It’s not even evidenced by how many homes they sold in your neighbourhood. Quality is a combination of the level of service, the experience you received before, during, and after a sale, AND ABOVE ALL, the assurance of knowing you received the highest possible price that the market could bear. How do you know that, if the universe is once given? Well, ask me and I’ll tell you. 

Your Realtor will take you step by step through the process of selling your home. This includes the signing of the many documents involved in working with a Realtor; the selling strategy or presentation that explains to you how the Realtor will market your home, what they recommend as a selling strategy (e.g. offers date, no offers date, open houses, etc), how they will prepare and advertise your home, and importantly, what they predict your home will sell for, and what they recommend as the listing price. On the matter of price, this is one of the most consequential decisions and it is on this issue that you should press your Realtor the most on rationale, what comparables they used and what comparables they DID NOT USE…and WHY? I can’t stress enough: do not take any conversation or recommendation on price as gospel. Do not assume that the first recommendation is the best recommendation. And if possible, do your own homework beforehand. That can involve you looking up current listings and sold prices, or it can involve contacting a Realtor friend who can share with you some of that information. Or contact me, even if you have no intention of listing with me. Is $50,000 worth a couple hours of your time? Is $100,000 worth a couple calls or calling in a couple favours? Yes. Yes. And yes. Make your Realtor EARN their commission. Getting the highest price for your property that the market can bear is the most valid expectation to have of a Realtor. If they say set an offers date in 7 days, ask why 7? Why not 5 or 14? If they say to accept the highest offer from the first round without trying to squeeze more out of the buyers, ask why.

Back to the sale: once you and the buyer have a firm offer in hand, the countdown begins to the closing (completion) date. Time to start planning your move, notifying your utility companies, contacting your lawyer, garage or contents sales, and in many cases, turning your attention to your new home. Most Realtors are happy to help you with most of this, provided they are qualified to do so. On or before the day of completion, your lawyer will request all keys, fobs, remotes, etc (or sometimes just the keys, with the expectation that everything else will be in a conspicuous location in the home); you’ll also have to sign the closing documents and perhaps provide some documentation, also (evidence of payment of utilities, taxes, etc). The closing documents include the important “statement of adjustments,” which summarizes all of the proceeds from the transaction as well as the disbursements (mortgage discharge typically being the largest). Your lawyer will usually transfer your proceeds to your bank account on the day of closing or the next business day. 

Much of what I’ve outlined here is relevant to properties that will get multiple offers. If you’re selling a property that likely won’t sell within 2-3 weeks, then it’s also important that you understand everything you are agreeing to in the Listing Agreement (Seller Representation). If the “holdover period” is longer than 60 days, ask why. Or ask me. I’m here to help. No expectations.

Selling a house that is likely to get multiple offers is a common occurrence in Toronto’s housing market for the last decade. And it’s not a phenomenon that’s limited to detached houses. Condos, townhouses, and cottages are all properties that often attract multiple offers. But getting multiple offers is not a guarantee that you received the highest price that the market could bear. That is a function of the overall selling strategy, the marketing & advertising strategy, and ultimately, the quality of your Realtor. You work with a Realtor because of their expertise, their insight, and their resourcefulness. That does not mean that everything that your Realtor says is gospel or the best or only path forward. The best decision is made jointly, with thoughtful discussion, debate, and understanding of each other’s positions and, ultimately, by understanding how your Realtor arrived at their decision. Remember, it’s important to understand what they’re telling you as much as it is what they are not telling you. A seller is often at an information disadvantage in this discussion, and while a relationship with a Realtor shouldn’t be adversarial, the more informed you are, the better your Realtor will be. So spend a bit of time doing your own research before working with a Realtor. It can only help you make a better decision and lead to a better outcome (e.g. higher sold price). Use the many resources available to you, including me. 

A few comments on the offers date: you may find yourself with 2 or 20 offers to review. Your Realtor is obligated to present every offer to you, regardless of the price, conditions, etc. Your Realtor is also obligated to not disclose any detail of any offer to anyone other than you. That means, they can’t tell the next highest bidder that they are $43,000 away from the highest offer. They are obligated to disclose the number of registered (bona fide, in-hand or en-route) offers AND they are obligated to proactively disclose whether any of the offers are from their brokerage or their own clients. These latter two situations give rise to a “multiple representation” situation that inherently invites a potential conflict of interest. Also, if your Realtor indicates that all offers must be registered by a certain time, say 6:00pm, and they start presenting the received offers to you at, say, 7:00pm, and an offer comes in at 8:00pm, before you’ve made your decision, they are obligated to present that offer to you, as well. To do otherwise would be to potentially harm you, their client. Offers dates are also products of the housing craze of the past decade. They are not binding, meaning, a buyer can submit an offer whenever they want. Whether you accept the offer or even consider the offer is up to you, the seller, and you alone. No one else can decide to accept or reject an offer, regardless of the published offers date. Offers received before an offers date are referred to as “pre-emptive” or “bully” offers. It is generally good practice for a Realtor to notify any agents with an active booking or who previously showed the property that you have received a pre-emptive offer. In some cases, this may prompt other prospects to submit an offer, and lo and behold, you’re in a multiple offers situation before the expected offers date.

All of this can get a bit manic. The best way to prepare for the various eventualities is to discuss them with your Realtor ahead of time. Or give me a holler and I’ll let you know what to expect.

Staging homes is an adjacent business that has enjoyed its own boom thanks to the booming real estate market. Once upon a time, staging was reserved for model homes in new subdivisions, but for the last 10+ years, staging has become a popular hustle. Staged homes are commonly found and are easy to spot, largely because everyone seems to choose from the same rental furniture catalogues (do you want the mid-century modern look or the transitional look). Realtors fall on either side of the “is staging worth it” debate. For new builds, staging an otherwise empty home with furniture can help prospects visualize the space. For lived-in homes, every Realtor will agree with the benefits of de-personalizing and de-cluttering. Whether or not you need to change your furniture and turn your home into a Crate & Barrel lookbook is more of a personal choice between Realtor and selling client. As with all things, it’s good to know your options, hear your Realtor’s viewpoint, and make the best decision with the information you have. Note: staging is not cheap, especially for a house, with rates running in the $5,000-$20,000+ range, depending on how long your place is staged and how much work is needed. Knowing whether you’re in a seller’s market or a buyer’s market can help inform your decision, too.

Conditional offers are common, even in a seller’s market. While you may rule out a conditional offer in a multiple offer situation, you should evaluate all the offers on their merits before doing so. That said, it’s rare for a multiple offer situation to favour a conditional offer. It’s important to know that when you have accepted a conditional offer from a buyer, the offer is not firm until the conditions are waived. The most common conditions on a buyer’s offer are: conditional upon securing financing within a pre-defined timeframe (usually 5-7 days); conditional upon a home inspection to be completed within a pre-defined timeframe; conditional upon a lawyer’s review of a status certificate (for condos). Depending on the deal, however, conditions can number several and can be unique to the property and parties (septic systems, appraisal value, vendor takeback mortgage, severance of property, etc). In general, conditions should be few in number and short in duration. The more there are or the longer they are in effect, the more risk there is the deal will fall through. When a conditional offer is accepted, you have the option of suspending showings of your property or continuing them. For residential properties, showings are generally paused until the deal firms or falls through. A final point on conditions: the aforementioned commonly used conditions are typically written in a way that favours the buyer in two ways: one, the buyer does not need to prove to you that a condition was unmet (e.g. if the offer was conditional on financing, the buyer does not need to prove to the seller that they could not get financing), and two, the power is with the buyer to notify the seller in writing if they choose to waive the offer for any reason (whether or not the condition has been met). Generally speaking, if the buyer does not provide written notice by the pre-defined deadline that the condition is waived, the offer is effectively dead and you’re back to marketing your property.

A firm offer is also known as an offer with no conditions or an unconditional offer or a clean offer. A seller generally prefers a firm offer, since conditions usually favour the buyer, which means you have a period of uncertainty after accepting an offer, until the conditions are waived. As a seller in a multiple offer situation, you may face a scenario where the highest price offer has a condition (say, on financing approval or inspection) and the second highest offer is a firm one with no conditions. There’s no right answer in this situation – deciding which of any offer to accept in a multiple offer situation depends on a number of factors. Furthermore, a curious norm in the past decade is for Realtors to advise clients to set an offers date 6-7 days after the listing is published, and to then accept the highest clean offer after only one round of bids. Don’t accept this formulaic approach of listing your home unless you fully understand the Realtor’s rationale. It’s not enough to say “that’s what everyone does.” There are advantages to a quick offers date but there are also many disadvantages. There are some advantages to accepting “highest best first offer” but there are many disadvantages. That this pattern has become so ubiquitous and predictable suggests a complacency in selling strategies. Remember, you are the decision maker when it comes to selling your home, and you should press your Realtor to give compelling rationale for any given selling strategy. One size does not fit all.

Selling a tenanted property can be advantageous or disadvantageous, depending on various circumstances. If you’re marketing a tenanted property to investors, then having a tenant with a history of reliable payment can be a plus. If you’re marketing a tenanted property to someone who intends to move in upon closing, then you need to know your rights and (many) obligations as a landlord. You cannot end a tenancy simply because you want to list or sell a property, thanks to a curious right of Ontario tenants known as security of tenure. At a minimum, you need to inform your tenant that you’re listing the property and provide them 24 hours written notice before any showings. Technically, they can’t deny you a showing if you give the requisite notice, but it’s generally a good idea to be civil with your tenant: they can make life more difficult for you than you for them. I speak from experience. Unless your tenant consents to ending their tenancy, selling a tenanted home means the purchaser will also be assuming the tenant and the obligations of a landlord. If the tenant is on a month-to-month lease, once the purchaser takes possession of the home, they can issue a notice to end the tenancy with 60-days notice, ostensibly on the grounds of “personal use.” There are a couple other scenarios, but this is the most common. If you know you’re likely to sell your property in the foreseeable future, consider the pros and cons of taking on a new tenant in the interim. It may be financially advantageous, if not entirely intuitive, for you to forego a tenant and leave a property vacant for a period of time. Implications of a vacant property tax are also important considerations.

Assignments are not common in Toronto (less so than Vancouver at its peak, anyway), but they do occur. The most common assignment is the sale of a pre-sale condo before closing. An assignment can be at par or face value (meaning, the price that is in the original purchase & sale agreement), at a discount (the seller or assignor is selling at below their purchase price and will cover the difference), or at a premium (say, profiteering off an in-demand pre-sale condo). Assignments can be complicated and require close scrutiny by a real estate lawyer to ensure both parties understand their obligations, financial and otherwise. Another situation that may trigger an assignment occurs when a purchaser with a firm deal no longer expects to be able to close the deal owing to unforeseen circumstances. Rather than default on the deal and face legal fallout, they may pursue an assignment to a new buyer who can meet the terms of the original deal with the seller’s consent. Assignments can be tricky and it’s recommended you work with Realtor to help you. 

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