5 Things to Know Before You List (Most Sellers Realize Too Late)
5 Things to Know Before You List (Most Sellers Realize Too Late) | Arthur Zhao
AZ
AZ Real Estate Partners
Selling · Listing Prep
5 Things to Know Before You List
Selling isn’t ‘call an agent and post on MLS’. Skip these 5 questions before listing and closing day brings a surprise — some of those surprises are worth $30,000+.
Every year I get 5-8 clients who learn at closing: ‘Why is the cheque so much smaller than I expected?’ ‘I owe HST on this?’ ‘I thought that wasn’t my problem.’ 90% of selling surprises aren’t market-driven — they’re questions not asked before listing. This is the 5-item pre-list checklist that saves money and saves relationships (yours, with your spouse and family).
5 specific scenarios
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1. What does your ‘net proceeds’ actually look like?
Selling a $1M home and netting $975K? Wrong. From $1M subtract: listing commission 2.5% = $25K + co-op commission 2.5% = $25K + lawyer $1.5-2K + mortgage penalty $5-15K (if still in term) + property-tax adjustment + staging/photos. Actual net: $920-950K. Demand a precise net sheet before listing.
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2. Have you calculated your mortgage prepayment penalty?
If your mortgage has 2 years left, breaking early can trigger 3 months interest or the IRD differential. On fixed-rate, IRD often runs $10-30K. Call the bank for an exact prepayment quote — most sellers skip this and discover it at closing.
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3. Does the Principal Residence Exemption (PRE) apply?
If this is your principal residence, gain is tax-free. But ‘principal residence’ has rules — you must have actually lived in it; if you rented it for years, those years count as capital-gain pro-rata; if you own multiple properties, only one can be designated per year. Confirm PRE status with your accountant before listing — never assume.
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4. Is the Seller Property Information Statement (SPIS) required?
In Ontario, the SPIS is voluntary — but once you sign one, any error or omission gives the buyer a claim or rescission right. Recommendation: don’t sign an SPIS. If the buyer insists, have your lawyer draft a ‘Material Defect Disclosure’ covering only what you know — much safer.
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5. Repairs and renos — which give real ROI?
Do: deep clean ($300-600, biggest ROI), paint ($2-4K, 1.5x return), staging ($2-5K, 2x return), minor door/window repair ($500-2K). Don’t: full kitchen/bath gut ($30K+, doesn’t pay back pre-sale), additions or basement reno (rarely recouped), highly specific design styles (narrows your buyer pool).
⚠ The net sheet is free — demand it
Any serious listing agent provides a net sheet before contract. If they don’t volunteer it, ask. This single document is the cheapest insurance against closing-day surprises. Every line should be a specific number, not ‘approximately’.
FAQ · Common Questions
Is the home I live in always tax-free when I sell?
If PRE applies, yes. Conditions: (1) you or your family actually lived there; (2) you didn’t designate another property as principal residence in the same year; (3) you didn’t rent it long-term. If you had an in-law suite or Airbnb income, self-check or call your accountant.
Mortgage penalty is huge — can I ‘port’ it?
Yes — it’s called mortgage portability. You move the existing mortgage to your next home, avoiding the break penalty. Conditions: the closings have to align (within ~30 days), and the new home’s loan amount must absorb the existing balance.
Are photos and staging really necessary?
$1M+ homes — mandatory. $500K-1M — depends. Polished homes can skip staging, but professional photos are non-negotiable. Under $500K — at least photos + simple decluttering. ROI is positive across the board.
Should I fix small issues before closing or sell ‘as is’?
Depends on cost. $500-2K items (leaks, doors that don’t shut, dead bulbs) — fix. Buyers see these in inspection and read ‘poor maintenance overall’. $5K+ items (roof, HVAC) — usually don’t fix; disclose in listing instead. That actually anchors buyer expectations correctly.
Do I owe HST when I sell a resale home?
Resale principal residence is HST-exempt. But: commercial use, rental, farm property, or ‘new’ homes (built within 4 years) trigger HST. A standard resale principal residence is not an HST issue.
Want a precise Net Sheet for your home?
Send me the address, current mortgage balance, and term remaining — within 48 hours I’ll come back with a net-proceeds estimate including buffers.
Arthur Zhao · Broker · 📞 416-277-3836 · arthurzhao.realtor
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