Thinking of Selling?

Before making the important decision to sell your property, it is essential to ask yourself some very important questions and consider all the options that will best position you to NET the most amount of money at the end of the transaction, before deciding to put your home on the market.

Frequently Asked Questions:

When is the best time to sell?

Most sellers believe spring is the best time to sell and showcase your property in warmer weather when everything is in full bloom. They are often told that spring brings the most active looking buyers. However, this may not always be the case. For example, if there are more properties listed on the market, buyers will have more options to choose from and will often become more selective, perhaps moving quickly from one option to another if they cannot negotiate a deal to their liking. When it comes to the four seasons, each season has its own unique advantages to consider when selling your property. Summer can be an excellent time to sell because buyers may be on holidays, or couples with children may be motivated to find a home to settle in to before the new school year. Fall can also be ideal as everyone is getting back in to the groove of things and will be energized after restful summer holidays. It is my personal favorite to list during the holiday season when homes are often decorated top to bottom and people are in a festive mood.

What is capital gains tax?
Capital gains tax is applied to the financial gain or positive difference between the sale price of an property and its original price. This tax typically applies to investment properties, not a principal residence. The Canada Revenue Agency (CRA) applies a tax of 50% on half of the financial gain when an investment property is sold. There are ways a seller may be able to reduce the amount of capital gains tax paid by choosing the appropriate time to sell, deferring the capital gain or by donating the asset to a registered charity. In addition, if the seller owns a small business, farm or fishing property, it may be possible to use a Lifetime Capital Gains Exemption (LCGE) to offset the capital gains tax. It is highly recommended that you consult a tax expert or lawyer to discuss your options.
Should I try selling my property privately?

Many people believe that by selling their property privately,they will save thousands in commissions. However, statistics have shown that those who choose to sell their homes privately not only take 3-4 times longer to sell, but they often miss out on thousands of dollars during the negotiation process due to lack of expertise and experience. Most importantly, when inviting potential buyers into their homes, they run the risk by exposing themselves and their families to complete strangers and unqualified buyers. Professional Realtors will ensure their buyers are properly qualified and vet them before assisting them to buy a property. Lastly, the exposure to potential lawsuits is much more likely when selling your home privately. Hiring a qualified, trustworthy real estate professional with industry expertise can greatly enhance the selling experience and likely avoid the common pitfalls involved with selling your property privately.

What is a discharge penalty and how much will it be?

Many sellers list and sell their properties before inquiring about the cost of discharging their mortgage and find out on the closing date that they will have to pay $5,000, $10,000, $20,000 or even $30,000 to break their mortgage.The amount of the penalty will depend on several factors: whether your mortgage is fixed or variable, how far along you are into the term of the mortgage, the interest rate and the terms of your mortgage contract. The Ratehub Mortgage Penalty Calculator is a tool used to help you determine what your prepayment penalty may be, however, it is always best to call your bank or lender to determine the actual fee.

Can I “port” my mortgage to the new property without having to re-qualify?
Porting your mortgage means taking your current mortgage along with its current rates terms and transferring them to anew property. Please note that even if you recently qualified for your current mortgage, the new property you’re buying may need to be appraised and go through its own qualifying process in order to port your mortgage. In many circumstances, you may need to increase the mortgage amount in order to purchase the new property. This is where it may get a little tricky, especially if interest rates have gone up from your last renewal. Not to worry — this is what industry professionals call a “Blend and Extend.” This will allow you to keep the interest rate and term from your existing mortgage and blend it with the new interest rate and term from the excess amount required to buy the new property, ultimately resulting in one blended interest rate and term. In the circumstance that interest rates are lower than when you last renewed your mortgage, you may want to consider discharging your existing mortgage and renew the entire amount at the lower interest rate so long as the savings are greater than any discharge penalty you may have to pay. As a licensed Mortgage Broker with VHME, I am able to provide you with various scenarios related to your mortgage.
If I am running a business out of my home, will my property be subject to HST?

If you are running a business out of your residential property, you may be required to pay H.S.T. when the property is sold, depending on what percentage of the property is being used for your business. For example, if your home is worth $750,000 and you are using 40% of the home for a daycare, you may be required to pay ($750,000* 40%)*13% H.S.T= $39,000. Furthermore, if you own a Mixed Use property where for example the main floor is zoned commercial and the upper two levels are zoned residential you may be required to pay H.S.T on the commercial portion only. Your MPAC assessment (Property Tax Bill) will help you determine what percentage of the dwelling is deemed commercial.

Should I stage my home or sell it as is? Will I be leaving money on the table if I choose not too?

Staging a property has become an excellent tool to feature a home’s best qualities and is often warranted, especially for homes that have dated furniture or a lack of furniture. Staging your home can be costly,running from as little as $1000 up to $20,000depending on the size of the home and the number of pieces of furniture required. The property may also require more extensive renovations such as painting, replacing flooring, carpeting, vanities, light fixtures, installing granite or quartz counter tops, resurfacing tubs or installing new plumbing fixtures. As an experienced Realtor I’ve learned that although warranted in many cases, staging requires discipline and the ability to determine if the cost of staging will actually net the home owner more money in their pocket than if they went without it and perhaps just followed some simple recommendations. I often find that working with what is already there, removing clutter, clearing counter tops and enhancing a few of the home’s best qualities & features is often all that is required to reach your homes highest potential marketability.

Will I have to pay back the HST portion on a newly built home or property that has been completely/ partially renovated?
Many buyers purchase new properties without any representation, often just walking in to the presentation centre on their own when a new development is being built. They often get so excited with the presentation centre’s latest designs, features and fashions that they sometimes forget a few important details during the buying process. One of those important details isthe H.S.T. factor. In most cases, the builder will absorb the H.S.T portion and build it into the purchase price provided the buyer signs an agreement assigning the H.S.T. rebate back to the builder which would normally go to the buyer. More often than not what buyers may not have been properly informed by the builder’s representative is that should they try to flip, sell, lose their job or wish to transfer the property to a third party, they will be required to pay back the entire amount of the H.S.T rebate that was assigned to the builder, should that sale occur within 18 months of the original closing date.
How do I know I am hiring the right agent?

Here are some interesting facts to consider when you are looking to hire a realtor: Canada has a total population of just over 37 million. The number of realtors in Canada has now surpassed 130,000 licensed agents coast to coast. This means that there is 1 realtor for every 284 people residing in Canada, inclusive of children and retirees. Unfortunately, in recent years there has been a trade off between quality and quantity, which has left the industry over saturated. So my question is“how can you possibly determine if you are hiring a qualified, reputable and knowledgeable agent for the job of selling or buying your most valuable assets?”
It is highly recommended to thoroughly interview the Realtors you are considering for the job of selling your property. My advice is to create a comprehensive list of questions in order to evaluate which realtor is right for you. Consider asking questions like “How many properties have you “personally” sold?” “What is your marketing plan?” “What are you specifically going to do to get my property sold?”and “How will you protect my interests when looking for a property to purchase?” A Realtor with the best combination of knowledge and experience will be able to answer all of your questions and assure that you are hiring the right person with your best interests at heart.

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It has never been more important than it is in today’s marketplace to hire a trusted, experienced & qualified Agent with a proven track record with solid Market Plan that wont treat you like a number and work hard to Net you the most amount of money for your property in the shortest amount of time with the fewest problems.  Wouldn’t you agree? 

What to do and to consider before selling:

    • Call your mortgage lender or check your mortgage documents to find out what your discharge penalty will be
    • Determine if your existing mortgage is portable, assumable with or without approval and whether you need to re-qualify
    • Have you signed a first right of refusal option agreement with a previous potential buyers
    • Is your property being expropriated or is it considered as Historical or Heritage
    • Are there any local future developments that may substantially increase or decrease the value of your property
    • Will your property be subject to taxes if you sold (HST, Capital Gains, business taxes etc)
    • Have you completed any major renovations or upgrades, were they done with a permit or without one?
    • Is your property the most expensive or the least expensive on your street?
    • Is your property subject to flooding or are you aware of any latent or patent defects?
    • Is your mortgage balance greater than the value of your property?
    • How long does it take for properties to sell in your area
    • Does your agent have a Marketing Plan or is their best and only asset their Social Media presence?
    • Is your agent capable of dealing with issues, deficiencies or problems?
    • Does your agent know how to handle multi offer presentations effectively so that you capitalize on the sale of your property?
    • If I consider selling “privately” will I really be saving commission or will I actually “Net” less by representing myself instead of hiring a qualified Realtor who will get me the most amount of $$$ and expose my property to the greatest number of buyers and agents?

These are just a few items to consider before putting your property on the market or exposing yourself to the wrong agent and becoming another horror story to talk about at parties.  With a proven track record and a detailed market plan that will ensure your success and net you the absolute most amount of money in the shortest period of time, The Frank Salvatore Team is committed to guiding you through the entire buying and selling process .  Allow the Frank Salvatore Team handle all your real Estate Needs and reach out to us today!!!

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