Information on Selling Big White Real Estate
Selling your Home
Once you have made the decision to sell your home, there are some important things that you need to consider with the help of your representative:
- The market conditions – The real estate market is always changing and it is important to understand how the current conditions will affect your position as a seller
- What the market value of your home is – This is influenced by market conditions, location, size, style, condition, amenities and financing options.
- What a realistic selling price would be – Homes that are priced right sell faster and can generate higher, competing offers.
The Selling Process
Here is a summary of the selling process:
- The Offer
This will be influenced by the market conditions and the buyer but is usually different from the asking price.
- The Deposit
Once an offer has been accepted, the buyer will place a deposit on the property. This deposit will be applied against the purchase price when the sale closes.
- The Terms
This includes the total price the buyer is offering and the financing details.
- The Conditions
This is a series of requirements that must be fulfilled prior to closing. The sale may be subject to such things as a home inspection, the sale of the purchaser’s property and/or the buyer obtaining financing.
- The Inclusions and Exclusions
This is a list of furnishes, appliances, decorative items, fixtures, etc. that are being included or excluded from the sale.
- The Closing and Possession Dates
In general, the closing date is the day that the seller will receive the funds and the title will be transferred to the buyer. In BC, the possession date is usually 1 to 3 days after the closing date.
The seller of a property in Big White is responsible for the following costs:
- Lawyer or Notary Fees and Expenses
Includes attending to the execution of documents and discharging of any encumbrances.
- Obtaining a Clearance Certificate
If you are not a Canadian seller, you will need a Clearance Certificate from Revenue Canada prior to the completion date of your transaction. The current wait for a Clearance Certificate is 6 to 8 weeks, so it is important to contact your lawyer or accountant as soon as an accepted offer has been received. Before issuing the Clearance Certificate, Revenue Canada will need to collect any tax payable on the property to be sold.
- Pre-Payment Penalties
In Canada, a mortgage is for a fixed term usually between 6 months and 5 years. There are penalties to selling the property before the term of the mortgage is up and are usually the greater of three months’ interest or the interest rate differential.
- Goods & Services Tax (GST)
The GST is a 5% tax that, in the case of a vendor, applies to the commission fee and other services related to the sale.
- Adjustments for Ownership
This may include taxes and/or strata fees.
- Capital Gains Tax
The rate of the Capital Gain tax is 33.33% of the ‘gain’ on investment properties. To determine the adjusted cost base in calculating capital gain, Revenue Canada allows for the following:
- Property Transfer Tax
- Legal fees and disbursements associated with the purchase
- Furnishings and renovations included in the selling price
- A portion of the interest on mortgage payments
- HST fees associated with the purchase
- Revenue Canada does not allow any deductions from the selling price in determining the gain. However, by filing a Canadian tax return with Revenue Canada after the sale, some of the tax paid may be recovered.