Chances are, if you’ve lived in your Lake Of Bays cottage or home for more than a few years, you can likely turn a tidy profit. That’s great news. But sealing the deal requires more than just a handshake. You’ll have to consider if now’s a good time to sell? What’s the best way to get the word out? How do you get top dollar for your property? These are just some of the questions that Andrew Bulloch can help you with.
1. Decide when to sell
In real estate, timing influences your Lake Of Bays cottage or home’s selling price. Working with Andrew Bulloch he can help make timing work for you.
A buyer’s versus a seller’s market?
When lots of people are looking for Lake Of Bays cottage or homes but not many are for sale, it’s a ‘seller’s market’, because the seller has something everybody wants. When there are lots of Lake Of Bays cottage or homes for sale and not many people buying them, it’s called a ‘buyer’s market’ because buyers have more power of choice.
How quickly do you need to sell your Lake Of Bays cottage or home?
In a seller’s market, top price and a fast sale can go hand-in-hand. In a buyer’s market, more sellers are competing for your potential buyer. If you have to sell right now, consider lowering your asking price a bit to speed up the sale. Andrew Bulloch can help you figure out the right price-to-speed ratio.
Seasonality. Do Lake Of Bays cottage or home sales get frostbite?
It’s true. Winter sales tend to be slower, and spring sales are more brisk. Regardless, there are always people looking to buy, and seasonality is only one of many factors to consider.
What if you’re also buying a Lake Of Bays cottage or home?
If you sell your existing Lake Of Bays cottage or home for a ‘low’ price, you’re probably also buying at a low price. If you are upgrading to a larger Lake Of Bays cottage or home, this actually works to your advantage. If you’re downsizing from a bigger Lake Of Bays cottage or home to a smaller Lake Of Bays cottage or home or a condo, you need to pay a bit more attention to the market.
To buy first or sell first? The eternal question
Many people are able to time their sale and purchase so they happen on the same “closing date”. As a buyer, you can make your offer “conditional” on the sale of your existing Lake Of Bays cottage or home to make sure you’re not left paying for two Lake Of Bays cottage or homes. As a seller, you can try to extend the “closing period” to give yourself more time to find your next Lake Of Bays cottage or home. Andrew Bulloch can provide advice and counsel during these kind of negotiations.
What if you find your new dream Lake Of Bays cottage or home before you’ve started to sell your old one?
Talk to your existing mortgage lender about “Bridge Financing”. This is when your lender (the bank) agrees to lend you the down payment for your new dream Lake Of Bays cottage or home, while you still cover the mortgage on your existing property.
2. Prepare your finances
Before the offers start rolling in, you should prepare for the massive amounts of money that will pass through your hands.
Still have a way to go paying off your mortgage?
Here are some things to consider.
“Discharging” your mortgage
Many people use the proceeds from the sale of their Lake Of Bays cottage or home to “discharge” or pay off their mortgage. If you have what is known as an “open” mortgage, you can pay it all off without any penalties. If you have a “closed” mortgage, be prepared to pay a penalty. The penalty amount will depend on a number of factors, including how much time is left on the term of the mortgage.
If you’re buying a new Lake Of Bays cottage or home, is your mortgage “portable”?
A “portable” mortgage means you can take your mortgage money with you and buy a new Lake Of Bays cottage or home, without penalty. This can be a real bonus if the interest rate on your mortgage is lower than existing rates! If your new Lake Of Bays cottage or home is more expensive, and requires more mortgage, you’ll have to borrow the extra money at the current market rate.
Maybe the buyer is “assuming” your mortgage
Your mortgage may have a feature that allows the new buyer to take over your mortgage. If the interest rate is lower than existing rates, this can be a very enticing selling feature for your Lake Of Bays cottage or home.
Become a mortgage lender yourself?
If your buyer is having trouble arranging all the money to buy your property, you may consider lending directly to them. This is called a “Vendor Take Back” mortgage, and it’s often used by sellers to help move a property in a slower market. This is an incredibly complicated financial dealing, and you must talk with your Andrew Bulloch, financial advisor and lawyer before choosing this route.
If you find your new dream Lake Of Bays cottage or home before you’ve started to sell your old one
Talk to your existing mortgage lender. You may be able to arrange “Bridge Financing”. This is when your lender (the bank) is confident your existing Lake Of Bays cottage or home will sell quickly, and they agree to lend you the down payment for your new dream Lake Of Bays cottage or home.
Capital gains tax
If the Lake Of Bays cottage or home was your primary residence, you will not have to pay taxes on any capital gain (the increase in the value of your Lake Of Bays cottage or home). If you had tenants living in part of your Lake Of Bays cottage or home, such as the basement, you will pay capital gains tax on a portion of your profits. You may also owe capital gains tax if you’re selling a vacation or investment property. Talk with an accountant to find out what you’ll have to pay.
GST for professional services
Your lawyer and Andrew Bulloch are providing services that are subject to GST/HST.
To be continued….