Selling a House in Canada
Selling a house in Canada is a very complex process that involves several specialists and requires certain expenses from the buyer.
1. Paying for the services of real estate agents
The Seller pays a commission on the amount of the a house sold. Typically the seller pays for the services of both the seller's and the buyer's agents. The commission rate is negotiated in the beginning, most often it is 5%. Of these 5%, half goes to the seller's agent, and half to the buyer's agent.
The fee is negotiable, and can be greater or less than 5%. It may be less if an agent represents both the buyer and the seller ("double presentation" - dual agency). This situation is not encouraged by brokerages, but if it occurs, an agent can charge less.
Another case is when the commission is big enough, the agent is interested in attracting customers, and is willing to work for a smaller percentage. However, if an agent is willing to work for less than 2.5% commission, you should be careful. It's possible that he is not very successful in real estate transactions, or it's just a part time work for him - then don't expect a great service.
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When selling a house in Canada, you should also remember that the MLS database shows what percentage of commission the seller offers to an agent, and if it is below 2% -2.5%, your a house may not interest real estate agents, even if it's attractive for buyers.
2. Costs of preparing a house for sale
The costs of preparing a a house for sale depend on its condition, on how much you want to raise the sales price, and on your potential customers are. Possibly, a few cans of paint to freshen the overall appearance of residential areas would be enough.
However, if there are serious shortcomings or your house needs substantial repairs, then the amount could be more significant. To strike a balance and get the maximum benefit from repairs, you should discuss this matter with your real estate agent. He can advise what is worth doing, and what is not; whether investments will give results. The costs may also include purchase of decorative items, and / or fees to a designer or staging expert.
3. Advertising charges
This includes payment for preparation of photo, video, electronic and printed materials, such as Internet presentations and posting information about your house in the catalogs). Typically, these charges are paid by a real estate agent, who undertakes the process of finding a buyer for your a house. However, you should always discuss this issue with the agent before you sign a contract.
4. Lawyers' fees
A fee to the lawyer dealing with registration of the sale (Legal fee), one-time fee paid at the time of closing.
5. Tax on profit
If you sell your house at a price higher than that at which you bought it, then it is treated as your income (gain capital). However, if the house that you sold was the place of your primary residence, then this income is not subject to any taxes. This is one reason why real estate investments in Canada are so appealing.
However if you sell a a house in which you have not lived, for example, if you bought a condominium apartment for rent, you will pay taxes on half of the gain capital. This also applies to the case when the a house belongs to a non-resident of Canada.
Selling a House in Canada - People involved in the Selling process
Selling a house in Canada requires assistance of several specialists who help you carry it out smoothly.
1. Real Estate Agent
A key figure in this process, because what you buy and on what terms depends on his or her abilities. Good agents usually help customers to choose other specialists involved in the transaction, and control the entire process until completion.
Lawyer is a mandatory player in the transaction. Correct paperwork and conducting the registration in the municipal authority is entirely his responsibility.
3. Staging Specialists
While it's not required to engage staging specialists when selling a house in Canada, their help can be tremendous. Typically, staging specialists give living space attractive appearance, and provide decorative elements (artwork, furniture, curtains, carpets, etc.) to help your a house look more luxurious and attractive.
On Selling a House in Canada I used materials written by Helen Riabinin, Sales Representative, Century 21 St.Andrew's Realty Inc. for Russian Toronto.
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