Tips for sellers of property in Haliburton County
Check your Title
One of the worst things that can happen in a real estate transaction is that the buyer walks away at the last minute due to a title problem your lawyer isn’t able to correct in time. You can avoid this outcome by having your title checked before you put the property up for sale. Old mortgages that should have been removed, missing road access and all kinds of other issues can be cleaned up ahead of time, giving you more confidence that when your property sells, it’s really sold for good.
Permits
Most buyers’ lawyer will want to see the original permits for septic systems, wells and construction to ensure the property complies with local regulations. Most of these documents are readily available from your municipal office and can be obtained in advance, to be included with information you give to potential buyers. Going through this exercise also allows you to correct any past errors before they become a problem. While you’re at it, check the zoning for your property and make sure you are in compliance with it.
Shore Road Allowance
If you live on waterfront, there is likely to be a strip of land between your cottage and the water called a shore road allowance. It’s owned by the municipality and, technically, is public; you cannot sell it. You cannot build on it either without special permission, so you’ll want to make sure you haven’t. Some people don’t like the idea of these allowances and avoid properties that have them. You can make yours more attractive to those buyers by purchasing the allowance before you list, so that it becomes part of your property.
Road Access
Make sure you can show potential buyers the documentation that gives your property permanent, convenient road access during the times of the year you’d expect a buyer to need it. If you don’t have this information, your lawyer can likely put it together for you and your agent.
Potable Water
Most buyers will ask for a water test, to ensure its safe for drinking. Rather than have to deal with a bad result at the last minute, have your water tested before you list, and undertake whatever maintenance is necessary if the result is less than perfect.
Hidden Defects
The concept of buyer beware goes only so far. You are legally responsible to disclose any serious defects you know about, whether the buyer and their home inspector find them or not.
Purchase Documents
It’s likely that many of the documents your lawyer will need will have been provided to you when you purchased the property. Some of them, such as a survey, will facilitate your sale by giving buyers additional confidence – nearly every buyer’s lawyer will ask for a survey. It’s a good idea to give a copy of this information to your agent for review, and ultimately to your lawyer after you have a signed offer.
Vendor Mortgage
A ‘vendor-take-back’ or VTB mortgage is a discount the seller gives to a buyer in exchange for a mortgage on the property for the same amount. Some buyers have difficulty obtaining sufficient financing, and so will ask you to take a first or second mortgage in order to make the deal. This can be an opportunity for sellers to earn more on the proceeds of the sale than they would from other investments, but there are risks you should discuss with your agent and lawyer. The interest rate you will earn will be determined by a number of factors: whether the mortgage is a first; the credit history of the buyers; market conditions; your negotiating power. Like most investments, a VTB mortgage can be a good thing or a bad thing. Do your homework.
Leaving Your Property
Whether the Agreement says so or not, you are legally required to leave your property in the condition it was when you sold it. If you have agreed to leave furniture or appliances, they must remain. Likewise you should not leave junk or personal belongings for someone else to clean up. A home or cottage doesn’t have to be spotless, but it should be tidy – just as you would want it to be were you the buyer moving in. Don’t get cute by taking light bulbs, towel racks, broadloom carpeting, kitchen islands, door knockers or built-in shelving, unless you’ve mentioned in the offer that you’ll be taking these things. In winter, make sure the drive is plowed and the fuel tank filled up. If in doubt about any of these things, check with your agent.
Get Legal Advice
Before you list, have your lawyer put together the legal documentation you’ll eventually need to support your sale. I like to give my clients a sale binder containing as much information about the property as possible, which their agent can give to potential purchasers to review. Doing this in advance saves time later on and avoids surprises that can kill or delay your deal. You’ll also want to know your tax liabilities, if any, when you sell. Your lawyer can review these with you and advise if you have any opportunities to reduce the tax burden. This is especially relevant with second properties.