What You Should Know When Selling Your Home in Toronto & The GTA.
As any first-time home seller will tell you, selling a property can be a lot more trouble than buying it. It’s definitely worthwhile, but it’s a great deal of work even when you sell with a real estate agent.
Fortunately, with some foresight, planning, you can make the home selling process easier on everyone and help your property fetch a higher price in the Toronto & GTA real estate market.
With a career spanning over 3 decades, Frank Leo, #1 Individual RE/MAX Agent in the World, has gathered this collection of essential home selling tips which every home-seller should know before they start the home selling process.
If you have any further questions about real estate don’t hesitate to contact us at any time.
The Big Question: Should I Sell Independently (FSBO)?
Maybe you’ve driven by a home for sale in Toronto and seen this sign on the front yard: “For Sale By Owner.” If the thought of selling your home independently crossed your mind as you returned home, you’re not alone.
While this approach may seem to work for a select few. Most people will have difficulty selling their home without a real estate agent. It’s possible, but you just won’t get the same results without proper marketing and skilled negotiations.
Most people have careers and families which they need to concentrate on. Putting hours of effort into selling your house is a commitment most people can’t afford to make. Some of those less successful sellers could end up either losing money by getting considerably less for the property or having the house sit on the market for weeks or even months.
Small Mistakes Can Cost A Fortune
Whether or not you sell independently or with a Toronto or GTA real estate agent, the small mistakes can be quite costly.
Let’s say you don’t get an accurate home evaluation before selling your property and end up setting the price too low. Sure, the house may sell because some market savvy investor will spot the opportunity and take advantage of the situation. Your losses could be massive. The market and the market conditions are continually changing; if you are not aware of these changes it could be very costly to you.
Conversely, you could set the price too high. Many people who are selling the homes they live in end up setting a higher price than others are willing to pay because of their own sentimental attachments to their properties. In this case your property will just sit for sale having people wonder what is wrong with it.
Can We Save Money By Hiring A Discount No Commission Company?
The simple answer yes but at a cost. Often the cost can be very high. These mere posting companies are all about a transaction fee. They charge a listing fee up front (non refundable even if the property does not sell). What they do not clearly state is that the selling fee is up to you to pay what you wish, but most end up offering the average fee to the selling agent. Therefore only half the expected and perceived savings right off the start.
If use a property at $600,000 if sold at the average 5% fee, the listing portion would be $15,000.00 minus the flat fee paid $3100.00 equals $11,900.00 ( less paid). The question is but at what cost. One of the best known companies that has a colour in their name as well as construction material (not a block,) LOL, has a tiered fee structure. If you used their services, a for sign, advertise your home on the MLS, realtor.ca , their own website, manage the showing process, help with the offers, negotiations and paperwork. This service is currently offered for $3,100.00
The TREB (Toronto Real Estate Board) Statistics.
In 2018 TREB had Register Agents 53554
Agent who did 0 deals 20182 / 37.69%
Agent who did 1-6 deals 25,516 / 47.65%
Agent who did 7-12 deals 5048 / 9.43%
Agent who did 12+ deals 1798 / 5.22%
As you can see almost 38% of agents sold zero properties. If you add the agents who sold 6 or less properties then 85.34% of all the agents on TREB sold 6 or less properties in an entire year. Now take into consideration that they all would “provide a for sign, advertise your home on the MLS, realtor.ca , their own website, manage the showing process, help with the offers, negotiations and paperwork” like the discount fee for service company. MLS and a sign on the lawn is not enough. If it was all agents would be selling the same amount of properties.
So why are only 5.22% of realtors selling 12 or more properties in all of 2018 on TREB?
Well as we can see it is not that easy even for licensed professionals. Imagine for the novice For Sale By Owner it can be overwhelming and stressful. To get the best results it’s simple you must reach more buyers but not only any buyer but ideal buyers although not easy. Knowing where they are, targeting them and then getting them off the fence to come and see the property and put in a great offer is required. It is safe to say if someone wants to buy in your area and is looking for a home like yours with all it’s attributes they would pay more than someone who would say “it’s not exactly what I’m looking for but it will do”. Of course and the difference in price would be substantial. We must recognize that there would be a fee for that extra advertising and also require experience to know where and how to market effectively. Experience in how to prepare the property for sale requires experience and often some cost. Then there is the negotiation process. This is very important and if done properly you will be much better off but if not you could end up getting a lot less for your property. It is not as straight forward and easy as many people think.
Going back to the fee for service company, once they are paid their fee what is their incentive to get you more for your property. They already have your money, they have been paid. They say they offer access to experienced realtors. The question I have is if they are that experienced realtors why would they work for a nominal fee if they could make much more working at a conventional real estate company? How experienced are they really (look at the stats above)? If you had a successful experienced realtor with a proven system how much more would you get?
So you are frustrated and your property does not sell, this is very common with flat fee services. The actual list to sale ratio of these companies is very low (you should ask for this information before you had over your hard earned money) it will shock you. So you paid their fee and now what?
You call an experienced successful realtor to help, but you have already paid the fee to the other company so you are actually paying more. Plus by having your property on the market and it not selling, the realtor will now have to fix the perception that there may be something wrong with the property. That’s why experience is so important. The good thing about traditional realtor is that you do no pay unless they get you results and your property sold. So they have to get you results or they are the ones that lose money. That is peace of mind.
Where Would You Sell Your Picasso Painting?
I believe that no two properties are alike. Everyone’s property is unique like painting ”one of a kind”. We have heard those stories of people having a garage sale and a buyer that sees the true value of that ring or painting and they buy it for a ridiculous price. Then they announce to the world how they found this treasure at a garage sale and how smart and lucky they are. This makes me mad. It is not fair to the sellers but that is the way it is. Would you want to sell your Picasso painting at a garage sale or would you want to hire the best art dealer to market it to all the art collectors they know and have access to and then expertly negotiate the highest price possible for you? The difference would literally be millions of dollars more in your pocket, but there would be a fee to pay for the service.
When it comes to your largest investment your property would you want to make the same mistake and sell it in a garage sale type of method? Do you really want to take a chance?
Working With The Best Toronto & GTA Real Estate Agent
There are numerous benefits to working with a successful real estate agent when selling your home in Toronto & The GTA, not the least of which is getting top dollar value for your property and selling in a time-frame that works for you.
When you sign a listing agreement with a real estate agent your chances of selling under great terms goes up immediately, perhaps more than any other single action could provide. Frank Leo & Associates, for example, offer a Guaranteed Home Selling System to clients, ensuring that every client’s home is sold for top dollar.
The benefits of working with a successful real estate agent is that they have a system and it will kick in right away. Most Toronto & GTA real estate agents will offer a free home evaluation that will give you an idea of how much you can sell the property for. Understanding what your home is worth is a hefty benefit on its own, even if you don’t sign a listing agreement with that particular agent.
If you decide to go forward with an agent, he or she will be able to address issues that you didn’t even know existed with the house. Working in the Toronto & GTA real estate market provides them with insights that you might never come across on your own. Many of these issues need to be corrected before the house hits the market in order to maximize the chances of selling.
You can read more about all of the benefits of working with an agent in our post about what it’s like working with the Best Toronto & GTA real estate agent for you.
It Takes The Best Real Estate Team in Toronto & The GTA To Get You Top Dollar & Sell In A Timeframe That Works For You
The Best real estate agent in Toronto & The GTA will certainly do well to help you sell your home, but having a top real estate team is even better.
A top real estate team like Frank Leo & Associates, rated the #2 RE/MAX Team in Canada, provide the firepower of an entire company to sell your home. In practical terms, that’s many times the amount of experience and effort a private seller or even an experienced agent is able to deploy on their own.
At Frank Leo & Associates, for example, our team has a dynamic 360 degree multi-million dollar marketing system which advertises your home 24/7 until sold. A sophisticated understanding of economics, marketing, and the Toronto & GTA real estate market allow us to market each individual property to buyers who are likely to want to buy it. A more sophisticated home-selling approach is likely to help your home fetch a far higher price on the market.
Your Home Needs Marketing Just Like Any Other Product
Most companies spend 1,000’s of dollars advertising their products and trying to make an impression on buyers. Only a real estate brokerage dedicated to real estate services can add the weight of their sophisticated marketing efforts to help you sell your home.
All of the efforts that goes into the marketing and advertising of each home alone is a great deal of work, but that’s saying nothing of the experience and understanding of the local market which is absolutely necessary to sell effectively.
Home Preparation Is Critical When It’s Time To Sell Your Home In Toronto or The GTA
A big part of creating an appealing perception of a home seller’s property in Toronto is, of course, the property itself.
The best Toronto & GTA real estate agents have home presentation down to a science. They understand what buyers look for and how to leverage the strengths of each home to create a positive first impression.
Home staging comes down to more than just tidying up and putting away family photos. Depending on the home, it can be quite an extensive process to get the property ready for photographing for the digital MLS listing and for prospective buyers who come see the home.
With no previous experience or insights into the psychology of home buying or what people are looking for in a home, independent sellers are at a distinct disadvantage when it comes to getting their home ready for sale in Toronto & The GTA.
You can get up to date on home staging in our post about preparing your home for sale in Toronto & The GTA.
Don’t Hold An Open House!
One of the biggest misconceptions about selling homes in Toronto, the GTA, or anywhere else is holding open houses. The truth about open houses might come as a surprise to you.
Although they are seen as a tried and true method of getting exposure for property and finding interested buyers, open houses actually aren’t the best way to get a home sold. Like door-to-door sales, they are an outdated form of real estate advertising which is less effective than modern methods and much more of a security issue.
Most real estate agents who use open houses are doing so to network with buyers. Even if a buyer doesn’t want to buy the house, they’re likely to be in the market for a similar property. That agent is then perfectly situated to show the buyers their choice of other properties.
You can read more about why the best Toronto & GTA real estate agents don’t depend on open houses in our post about how ineffective open houses don’t sell homes.
What If You’re Selling A Rental Property In Toronto or The GTA?
If you’re selling your property in Toronto & The GTA there are a few additional considerations to keep in mind.
First, you can rest assured that the myth that landlords have to wait until their tenants decide to leave before they can sell is just that – a myth.
As a landlord, you have the right to put your property up for sale at any time you please. The only stipulation is that you must continue to abide by the Residential Tenancies Act and/or the terms of your lease agreement with the tenant(s).
Tips For Selling A Property Which Has Tenants
You can read the Residential Tenancies Act yourself but we’ve summarized the key points relating to selling for you below.
Please note that although the information we’re providing is up-to-date and accurate it isn’t a replacement for legal advice.
Can You Terminate A Tenant’s Lease When Selling Rental Property in Toronto?
As a landlord in Ontario, you can’t legally evict tenants in order to sell a property. Unless you mutually agree for them to move out or the new owner must continue to respect the terms of the lease. At the end of the lease the tenant may be required to move out if it’s for the personal use of the new owner.
You can refer to the Landlord Tenant Board’s resources for more information regarding landlord/tenant rights.
When The Tenant’s Lease Ends And You Want To Sell The Property
If a tenant’s lease expires they automatically become a monthly tenant. You will still need to follow the Landlord and Tenants act.
There are many variables when dealing with tenants and knowing how to proceed it key to getting the best results. An experienced realtor can make all the difference when selling.
Doing Renovations When Selling A Rental Property in Toronto
If you’re planning to renovate, upgrade, refurbish, or do any work on the unit or building you are selling you have an obligation to be upfront with your tenants. Asking the tenants to leave on some pretext but fixing the place up instead is grounds for recourse.
Any wrongful eviction leaves you vulnerable to a lawsuit. The Ontario Landlord and Tenant Board could slap you with a fine of up to $25,000 in addition to the cost of damages you might have to pay out to the tenant.
Since the property belongs to you, you are entitled to make upgrades so long as you abide by the terms set out in the Act.
What To Do When Showing A Property That Has Tenants Living In It.
Potential buyers will want to see the property for themselves, naturally. So long as you abide by the law of reasonable entry you are completely within your rights to show the property. It’s important to have the appropriate clause in your lease to avoid any confusion.
Marketing The Rental Property For Sale In Toronto
There are many legalities to deal with when selling your rental property. Trying to sell it yourself can be very challenging. If you are not aware of all the potential pitfalls you will have a difficult time selling your rental property.
What If You Have Difficult Tenants?
If you’re dealing with difficult tenants you have legal recourse. That is, tenants aren’t allowed to refuse to let potential buyers see the property. They must also maintain a reasonable standard of cleanliness. Although you have legal recourse this may be very costly and the results are not guaranteed.
If tenants are especially difficult and jeopardize the sale the landlord can sue for damages. But the likelihood of getting the money for the damages even if you win can be difficult.
What Rights Do You Have As A Landlord When Selling Property In Toronto
Landlords in Ontario are completely within their rights to sell a property which is occupied by a tenant. If you want to close the sale before the end of the tenant’s lease, the new owner must assume the tenant. If you can try and reach an agreement with the tenant about leaving earlier.
How To Make The Sale Go Smoothly
Securing a sale for your rental property takes enough effort on its own without having to worry about complications with your tenant.
A great deal of frustration on everyone’s part can be saved with a little bit of planning. Be upfront with your tenants and let them know your intentions for the property. They can start looking for a new place with plenty of notice, making them less likely to disturb the sales process.
Giving the tenants advance notice is also likely to make them more amicable when it comes to future showings or photography. They’ll know what to expect. Accommodating their schedules when it comes to bringing people to the apartment will also go far what it comes to making them comfortable and co-operative. Keep in mind the tenants do not have to leave and many informed tenants will refuse.
Reaching An Agreement With Your Tenants When Selling Rental Property in Toronto & The GTA
Some landlords take a proactive role with helping their tenants move to give them an incentive. Whether it’s covering moving expenses, helping them find a new place, or helping them relocated to another unit, there are many ways a landlord can help a tenant to encourage them to move out.
Depending on your relationship with the tenants you can offer them more or less to move. It may be better to add these incentives after letting them know you intend to sell and opening negotiations. You don’t want to find yourself in a disadvantaged bargaining position when your tenant figures out how important it is for you to sell the property in a timely fashion.
Get Help Selling Your Rental Property in Toronto or The GTA
Regardless of what happens with your tenants, you can count on Frank Leo & Associates to help you sell for top dollar in a timeframe that works for you.
You can also contact us with any of your Toronto & GTA Real Estate questions.