According to The Toronto Regional Real Estate Board (TRREB), the housing market in the GTA is continuing to improve as of May 2023. For that particular month, realtors reported 9,012 sales through the MLS system. That represents a 24.7% increase over the same month in 2022. Those positive numbers are motivating sellers in Oshawa, Whitby, Richmond Hill, and Scarborough.
The housing market is heating up. That means it’s an excellent time to consider selling for market value. This value can be determined by a number of factors. While there’s no universal method to determine this price, it usually factors in numbers for comparable sales and an appraisal.
Here are some of the things you’ll need to know if you’re planning on selling your house for market value.
How Much Should I Sell For?
There’s no hard and fast answer here, but some general rules that work when you’re putting together an asking price. Researching the local real estate market conditions is the first step. That will give you a benchmark and some data to start working from. Reviewing historical data can give you a solid foundation to learn more about what’s selling and how much it has been going for.
Make note of some of the important figures like the number of days a property sits on the market and the median sales price. The other important numbers to look at are the inventory levels. This is all about the supply and demand. High inventory can mean a buyer’s market. Those types of market conditions mean you’ll need to drop your sale price. The opposite is a seller’s market where there’s a low inventory. A listing, under those circumstances, can ask for a higher price.
If you talk with a local real estate agent, they will more than likely tell you the goal is to get somewhere between 5% and 10% above the current market value. There are other trends and factors you’ll need to consider — like a market that’s in a downturn.
How Does A Slow Market Affect The Sales Price?
Some sellers can make a big mistake when there’s a market downturn. Psychologically, they find it difficult to shift gears and hang on to the price they were asking when the cycle was good. As a result, the house can sit unsold but carrying costs still need to be met. Those include real estate taxes, property insurance, and even mortgage payments.
However, a slow market isn’t necessarily about an economic downturn. Historically, fewer homes get sold between Thanksgiving in the middle of January. The sale price gets affected for several reasons. There’s a higher number of properties for sale in a slow market, and that increases competition and drives prices downward. Sellers often need to lower their prices to get the property sold.
As the negotiating power shifts to buyers, prices get driven down further.
Different Options for Selling a House
In Ontario, you’re free to sell your house for any price you want. There are several different ways you can set a sale price. Considerations include the fees for legal services and cleaning, staging, and moving costs. Following are a few options you have:
For Sale By Owner (FSBO)
In one of these transactions, the homeowner takes on all of the responsibility, including handling legalities, documents and marketing. They also set the price.
Real Estate Agent
A real estate agent looks after all of the details. They understand how to negotiate with potential buyers, deal with the legalities and documents involved, and set a fair market price.
Cash Home Buyer
A cash home buyer is the most direct option. They can supply a quote in as little as 24 hours and there’s no need to do any upgrades or otherwise necessary repairs when you deal with one of these alternative lenders. There are no commissions to pay when you use them. However, since their business model is based on buying at a discount and selling on the MLS for a profit, they cannot offer full market value.
Regardless of the price you set and the method you use, the big priority for home sellers is to get as much money as possible.
Here’s How Much You Can Make Selling Your House
You’ll need to look at a few factors before you can come up with what will be a ballpark figure here.
- Consider the location before setting an asking price. A home that is closer to transportation routes shopping and schools will net you a bigger price when you go to sell.
- Renovations and upgrades can make a difference but you’ll need to be careful with these. For example, HGTV reports that a kitchen renovation has an ROI of somewhere between 75 and 100%.
- Along with some other factors, there’s an element of seasonality. Selling during the warm weather is preferred. You’re also more than likely to get market value and above when you list before school starts.
Remember, there are closing costs and some other ones that will eat into your sale profits. Like taxes.
What Are The Taxes That Need To Be Paid?
First off, there’s no capital gains tax if the property you’re selling is a principal residence. In Ontario, the buyer pays the Land Transfer Tax, not the people selling.
Then there’s the HST. That tax doesn’t apply on resale properties.
Finally, if you’re buying and selling homes as part of a business, the CRA will charge you the usual tax rates.
Remember, getting the timing right is a big part of selling your house for market value.
When Is The Best Time To Sell Your Home?
If you can, the best time to sell is in the Spring and Summer. Specifically, the beginning of May, or aim to list your home on a Friday or Saturday somewhere between April and June. Remember, buyers love to come to open houses in nice weather.
Mortgage Broker Store is a cash home buyer serving several locations in the GTA. Call 416-499-2122 or email ron@mortgagebrokerstore.com for some free advice. Our team has 34 years of experience.
