Once you accept an offer from the buyer, there are a number of obligations you have and steps to take prior to completion of the sale. You are responsible for maintaining the property in good condition for the buyer during this process. The sale may also be subject to a home inspection.
Ronald Klarenbeek can help arrange access for the inspection well before the stated date in the Contract of Purchase and Sale. It is possible that you will need to re-negotiate or make repairs based on the results of the home inspection, so be prepared for that too.
Consult a moving guide for advice on when to notify utilities and how to prepare for your upcoming move.
When selling a home, you may need to provide a title search or other documents to the buyer prior to completion. These will be outlined in the Offer to Purchase and Sale and explained to you by Ronald Klarenbeek
If you are selling a condominium, be prepared in advance to show detailed documentation pertaining to your unit and Strata Corporation, including past minutes. In order for the deal to complete, the buyer must approve these documents by the stated date in the Contract of Purchase and Sale. Ronald Klarenbeek can assist you with compiling the following documents:
- Title search
- Form B
- Registered strata plan
- Financial statements of the strata corporation
- Property disclosure statement
- Building envelope report, if any
Tip: Keep copies of all your Strata minutes to avoid extra fees for making copies.
You will need a lawyer or notary to legally complete the sale. Please advise Ronald Klarenbeek of your selected lawyer and notary and we will provide them with a copy of the signed Contract of Purchase and Sale in advance. It is advisable to arrange to meet with your legal counsel several days prior to the completion date to review and sign all of the documents.
When visiting your lawyer or notary in preparation for completion day, carry photo identification with you such as a driver’s license, passport or resident’s card and bring a personal cheque to pay for legal costs.
On completion day legal ownership of your property will be transferred to the buyer. Funds for the sale will be received by your lawyer or notary from the buyer’s lawyer or notary and a statement of adjustments will be provided to you by your lawyer or notary. This list itemizes all costs payable at completion, including legal fees, taxes and other completion costs. Finally, funds will be used to discharge your mortgage, if applicable, with any remaining proceeds transferred to you in the form of a bank draft.
Tip: Protect yourself and your investment by ensuring that your home or condominium/content policy is still effective until the transfer of ownership takes place.
This is the day that the buyer receives the keys to your home. On your behalf, Ronald Klarenbeek will coordinate the key exchange with the buyer.6. Closing Costs
Closing costs associated with selling a home and incurred by the seller include adjustments, real estate commission, mortgage discharge fee, capital gains tax (if applicable) and legal fees.
Adjustment costs are any prepaid costs paid by the seller that are to be reimbursed when the buyer takes possession of the home. Adjustment costs may include property taxes, utilities, strata fees and service contracts.
If you own a condominium, your strata corporation might charge a fee anytime you move in or out of your unit. Fees generally range from $50 to $100 for each move. Please refer to your strata bylaws for more information.
In most cases, the buyer credits the seller for these costs on the adjustment date. In some instances, you may have to reimburse the buyer for outstanding property taxes.
Capital gains tax is applicable if you have sold a rental property, cottage or any property purchased as an investment or to earn income. It does not apply to sales of your principal residence. Capital gains are taxed at a rate of 50% of the gain. Non-residents are required to pay an estimate of the tax, in the amount of 25% before the sale and further documentation will be required. Please consult with your accountant or lawyer for details on Capital Gains Tax.
Generally speaking, as the seller, you will be required to pay the commission for the sale of your home and GST is also applicable. Ronald Klarenbeek will provide you with a breakdown of costs for commissions.Discharge of mortgage
Depending on the type of mortgage you have, there may be penalties and fees to discharge your mortgage. Closed mortgages usually charge penalties and discharge fees if you sell before the end of your term while open mortgages are more flexible and can often be transferred or discharged with little or no fee. Talk to your lender ahead of closing to clarify.Legal fees
When you hire a lawyer or notary to assist with your transaction, they will process the legal documents required for sale of real estate property.
Legal fees generally average $750 and up, plus GST and disbursement costs.
Your lawyer or notary will arrange for the transfer of money from the buyer’s lender and ensure that your mortgage is discharged. He or she will also prepare a Statement of Adjustments which itemizes the costs payable at completion. Finally, disbursement costs such as faxes, phone calls and mailing fees will be itemized and vary from approximately $250 (total) and up.