Difference between pages "Couples Who Are Not Spouses: Your Income, Support and Property Rights" and "Selling Your Home"

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{{REVIEWEDPLS | reviewer = Thomas E. Wallwork|date= August 2017}} {{Dial-A-Law TOC|expanded = relationships}}
{{REVIEWEDPLS | reviewer = [https://www.ganapathico.com/our-team/nathan-ganapathi/ Nathan Ganapathi] and [https://www.ganapathico.com/our-team/anna-kurt/ Anna Kurt], Ganapathi Law Group|date= October 2017}} {{Dial-A-Law TOC|expanded = home}}
Not all couples who live together meet the definition of spouse under BC’s family law. Those who aren’t considered spouses have some rights but not others. Learn what happens if you’re in an unmarried relationship that ends.
Selling a home is the biggest financial decision most people make. Learn what to consider before putting up the “For Sale” sign, and the steps involved in selling your home.


{{PLSStorybox
==Key things to consider==  
| image = [[File:Serena.png|link=]]
| text = “My partner and I lived together for 17 months before we ended our relationship. We had bought a place together. It was only in my partner’s name, as was the mortgage. I thought I was automatically going to get half the property. But because we lived together for less than two years, that’s not the case. I have a harder path to asking a court for a share of the property."<br>
– Serena, Kimberley, BC
}}


==What you should know==
===You can go it alone or hire a real estate agent===
You can sell your own home yourself. Many do. The costs of hiring a real estate agent can be substantial (as the seller typically absorbs the cost on the sale of a home).


===Who a spouse is===
But there are advantages to working with a '''real estate agent'''. Agents are keenly aware of market trends and can help you get the best possible price for your home. They are connected to networks of potential buyers you would have a hard time reaching on your own. And they can help you navigate a complex process, advising on questions such as:
There are two main laws that define who a '''spouse''' is. [https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-3-2nd-supp/latest/rsc-1985-c-3-2nd-supp.html The federal ''Divorce Act''] defines a spouse as either of two people who are '''married''' to each other.


[https://www.canlii.org/en/bc/laws/stat/sbc-2011-c-25/latest/sbc-2011-c-25.html#sec3_smooth BC’s ''Family Law Act''] expands the definition. Here, the term spouse also includes:
* What facts must you disclose?
* What paperwork is required?
* What about the existing mortgage?
* Who ensures you will get your money?


* people who have lived together in a marriage-like relationship for at least '''two years''', and
{| class="wikitable"
* people who have lived together in a marriage-like relationship for less than two years and have had a '''child together''' (in this case, though, you '''aren’t''' considered a spouse when it comes to property, debt or pensions; we explain what this means shortly).
|align="left"|'''Tip'''
[https://www.canlii.org/en/bc/laws/stat/sbc-2004-c-42/latest/sbc-2004-c-42.html Under the law in BC], real estate agents must be licensed. [https://www.recbc.ca/about/licensee-search.html You can use the licensee search from the Real Estate Council of BC] to see if an agent is currently licensed.
|}
===In signing a listing agreement===
If you hire a real estate agent, you will be asked to sign a '''listing agreement'''. This is a contract between you and your real estate agent, setting out the terms for selling your home.


A couple is living in a '''marriage-like relationship''' if they present themselves as a couple to family and friends, and carry out their financial and household affairs as a couple.
Most real estate agents use a '''multiple listing agreement'''. This means your agent can advertise and show your home to agents from other real estate agencies (and not just their own). In this way, many potential buyers can learn about your home.


This information is for couples who are '''not spouses''' under BC’s family law. For example, you may have lived together in a marriage-like relationship for '''less than two years''' (and not had a child together). Or you have a child together but have never lived together.
Most listing agreements are standardized forms from the local real estate board. The agent may not have a lot of room to negotiate terms. But there are a few terms to pay particular attention to:


===Your rights to support===
* '''Who the agent is representing'''. A real estate agent can be hired as an agent for the seller, as an agent for the buyer, or (as we explain shortly, in very limited circumstances) as an agent for both the seller and the buyer.
Support is money paid by one parent or guardian to another, or one spouse to the other, for financial help after a relationship ends.
* '''The length of the agreement'''. Many agents prefer that the listing agreement continue for three months, but you can choose to list your home for a shorter period. If your home doesn’t sell within that time, you can either extend the term of the listing agreement or change agents.
* '''The agent’s pay'''. The listing agreement sets the amount of the agent’s pay, or commission. In BC, commissions can be a flat fee or a percentage of the sale price of the home. We explain these two options shortly.


====Child support====
====The real estate agent’s duties depend on who they are acting for====
Under BC law, each parent and guardian of a child has a duty to financially support the child. It doesn’t matter if the parents of a child have ever lived together. Generally, you can ask for child support from the other person as long as they’re a parent of the child under BC law. The other parent must pay child support for that child under the Child Support Guidelines.
All real estate agents must act honestly and with reasonable care and skill in performing their work. They also have other duties that depend on who they are acting for.


To learn more, [[Child Support (No. 117)|see our information on child support]].
A real estate agent can be hired as an agent for the seller, as an agent for the buyer, or (in very limited circumstances) as an agent for both the seller '''and''' the buyer. Under the law, an agent has to explain how these options change their duties to you.


====Spousal support====
When an agent is acting only for you, as your '''sole agent''' in selling your home, the agent has these duties:
A person who’s a spouse under the BC ''Family Law Act'' is eligible to apply for spousal support. (See “Who a spouse is” above). Someone who isn’t a “spouse” under BC family law cannot apply for spousal support.


To learn more, [[Spousal Support (No. 123)|see our information on spousal support]].
* a duty of undivided loyalty to you
* a duty to keep your confidences
* a duty to obey all your lawful instructions
* a duty to account for all the money and property you place in their hands while acting for you


===Your rights to property acquired during the relationship===
[https://www.recbc.ca/licensee/rules.html Under the rules in BC], real estate agents in the province can not practice '''dual agency'''. This means they can not act for both a buyer and a seller in the same transaction, or for two buyers who have conflicting interests. The sole exception to this rule is for property in a remote location that is under-served by real estate agents and it is “impracticable” for the parties to be represented by separate real estate agents.
Property division is one of the areas in which being a spouse under the ''Family Law Act'' makes a difference. Under the Act, '''spouses''' are presumed to:


* keep the property each of them brought into their relationship
Before practicing dual agency under this exception, a real estate agent must make a disclosure to both parties to the transaction. The disclosure must inform them of the duties and responsibilities of the agent to the clients, and the risks associated with a dual agency relationship.
* keep certain other property such as inheritances and gifts from someone other than your spouse
* share the other things they acquired during their relationship, no matter who bought it (called '''family property''')


Only spouses who are '''married''' or who’ve lived together in a marriage-like relationship for ''at least two years'' share an interest in family property. If you’re in a relationship that doesn’t meet this definition of spouse, you’re only allowed to keep the property you brought into the relationship.
====The agent typically gets paid after the sale of your home====
In BC, a real estate agent’s pay (or '''commission''') can be a flat fee or a percentage of the sale price of the home.


If you own property together (jointly) — such as a house, a car, or bank accounts — you’re each presumed to have an equal interest in that joint property.
A common approach is for an agent to charge 7% on the first $100,000 of the sale price, plus 2.5% on the rest. For example, if your home sells for $400,000, the commission under this approach would be $14,500:


If you contributed to the purchase of an asset owned by your partner, or paid more for the purchase of a joint asset than your partner, you may be able to get out what you put in. But you’ll have to prove your contributions to the purchase. And you’ll have to show that you didn’t mean for your extra contributions to be a gift.
Portion of price Commission
7% of $100,000 = $7,000
2.5% of $300,000 = $7,500
Total commission = $14,500
As the seller, you pay this commission to your agent. Your agent then shares it with the buyer’s agent. The commission is typically deducted from the sale proceeds of the home at the time the sale is completed.


To learn more, [[Dividing Property and Debts|see our information on dividing property and debt]].
===If you have a mortgage on your home===
If you have a '''mortgage''' on your home, you will need to deal with the mortgage in some way in selling your home.


Because the law in this area is complex, you should get legal advice.
One option to explore is whether a buyer can '''assume''' (meaning take over) the mortgage. If a buyer can assume the mortgage, this can save you money, avoiding the costs of paying out the mortgage on the sale.


===Your rights to property based on unjust enrichment===
Another option is paying off the mortgage when you sell your home. Many mortgages have restrictions on paying out the mortgage early. Some have a '''prepayment penalty''', such as three months worth of mortgage payments. Sometimes a lender will waive the prepayment penalty if the buyer takes out a new mortgage with them, or if you take out a new mortgage with them when you buy a new home.
If you contributed in some way to the assets owned by your partner, you may be entitled to a share of that property based on '''unjust enrichment'''. To claim an interest in your partner’s property, you must show three things:


* your partner gained '''a benefit''' from your contributions,
To find out if your mortgage can be assumed or includes a prepayment penalty, check your mortgage contract. Or check with your lender.
* you suffered '''a loss''' as a result of making those contributions, and
* there’s '''no legal reason''' why your partner should have received the benefit of your contributions at the cost of your loss.


If you can prove these things, a court may agree your partner was '''unjustly enriched''' by your contributions, and that you should be compensated for your loss. The court can order that your partner compensate you. If your partner can’t afford to make the payment, the court may impose a trust, called a '''constructive trust''', on their property. Then you can be paid the compensation you’re owed.
For more on mortgages, [[Mortgages and Financing a Home Purchase|see our information on mortgages and financing a home purchase]].


The law in this area is complex and it’s highly advisable to seek legal advice.
===If you get an offer to purchase===
{| class="wikitable"
|align="left"|
"After our kids left for university, we decided to downsize. We got four offers on our home at the first open house. I had no idea there was so much to consider. Between the subject to clauses, the offer prices, the closing dates — it was dizzying. And that was before we even figured out the financing part of it."


===Responsibility for debts===
:'' - Jasmin, Surrey''
If you sign for a loan, it’s your loan and your responsibility — not your partner’s. Likewise, if your partner signs for a loan, it’s their responsibility. But if you both sign for a loan, you are both responsible to repay the debt.
|}


If you '''guarantee''' (promise to pay) your partner’s loan, and your partner is unable to make the payments (or refuses to), you’re responsible. That’s true even though you may have had no benefit from the loan. If you end up paying some or all of the loan, you can ask your partner to pay you back.
If someone offers to buy your home, they will present an '''offer to purchase'''. This is a contract setting out the terms of the sale of your home. It is usually written on a standard form provided by the local real estate board. Once you and the buyer sign the offer, it is a binding contract of purchase and sale.


===Getting income assistance===
Your real estate agent is under an obligation to bring all written offers to you for your consideration. If several offers are brought to you at once, you are under no obligation to accept any one offer over another.
The BC government gives income assistance to those who need financial help.


As soon as you start living with someone else, the income assistance office may treat you like spouses. When you apply for income assistance, your caseworker will look at what income and assets you both have.
If there is anything you don’t like in an offer (including the price or the completion date), you can write in your own terms instead. This becomes your '''counteroffer'''. This is considered to be a new offer altogether. It becomes a binding contract of purchase and sale if the buyer accepts. If the buyer doesn’t accept your counteroffer, there is no agreement.


[https://www.canlii.org/en/bc/laws/stat/sbc-2002-c-40/latest/sbc-2002-c-40.html#sec1.1_smooth Under BC’s income assistance law], '''spouse''' includes people living together for at least the last '''12 months''' in a row. The income assistance caseworker must believe that, like a marriage-like relationship, your relationship shows:
===If the offer includes a subject to clause===
'''Subject to clauses''' are conditions that must be met before a sale proceeds. Common subject to clauses a buyer may include in their offer are:


* financial dependence or interdependence, and
* subject to the buyer getting financing (for example, a mortgage)
* social and familial interdependence.
* subject to the buyer getting a property inspection
* subject to the buyer selling their home


If you meet this definition and qualify for income assistance, you’ll get it at the rate for a couple or family — not as two single people.
If you get an offer with a subject to clause, make sure the buyer has only a short time to remove the condition. Your home may be off the market for the time it takes the buyer to remove the condition, and you will likely want to keep that period short.


You have the right to challenge the decision of the income assistance office. For step-by-step guidance, [[Income Assistance: Reconsiderations and Appeals|see our information on income assistance reconsiderations and appeals]].
As well, the subject to clause should be specific. Don’t accept a general clause, such as “subject to buyer obtaining satisfactory financing.” If the buyer changes their mind, all the buyer has to do to get out of the deal is to say they couldn’t get satisfactory financing. Instead, put details in the clause about the financing — the interest rate and principal amount the buyer is seeking to finance — as well as a deadline for when the buyer must remove the clause. A lawyer who practises real estate law can be helpful in this process.


If you claim income assistance as a single person when you’re actually living with someone else as a couple, you:
===You must disclose any defects to a buyer===
As a seller, you must disclose any '''material latent defects''' about your home to a buyer. A material latent defect means a defect that cannot be discerned through a reasonable inspection of the property. This includes a defect that makes the home:
 
* dangerous or potentially dangerous to the occupants,
* unfit for habitation, or
* unfit for the purpose for which the buyer is acquiring it, if the buyer has made this purpose known to the seller.
 
Common examples of material latent defects include:
 
* the basement leaks when it rains
* structural damage to the property
* underground storage tanks are located on the property
* problems with the potability or quantity of drinking water
* damage caused by the illegal use of the property (for example, a marijuana grow operation)
 
Failure to disclose material latent defects can result in future problems, including legal issues if the new owner discovers problems that you were aware of and did not disclose.
 
===What things in the home are included in the sale===
When someone buys your home, all the '''fixtures''' go along with it, unless you and the buyer agree otherwise. Defining a fixture can be difficult: generally, a fixture is anything that’s attached to the home to the point where removing it would damage the home or require repair. The bathroom sink is an obvious example. As objects like chandeliers are sometimes items that homeowners are interested in taking with them after the sale of their home, it is important these fixtures are explicitly excluded from the contract of purchase and sale. Better yet, before you put the home up for sale, replace the chandelier with a simple, inexpensive replacement.
 
{| class="wikitable"
|align="left"|'''Tip'''
The appliances — such as your washer, dryer, fridge and stove — aren’t fixtures. They aren’t included in the sale unless you and the buyer agree otherwise. You may be able to use them as bargaining tools if the buyer wants them.
|}
===On the completion date===
The contract of purchase and sale will state the '''completion date''' for the sale. On that day, legal ownership will transfer from you to the new owner in exchange for the purchase price of the home.


* may have to pay back any benefits you’ve received,
It is the normal practice for the buyer’s lawyer or notary public to prepare the documents needed to transfer the legal ownership. You, as the seller, may want to engage a lawyer or notary to act for you. Among other things, they can protect your interests by:
* may face a civil court case or even criminal charges, and
* could be refused future services by the Ministry of Social Development and Poverty Reduction.


===Getting benefits under a pension plan===
* checking the documents prepared by the buyer’s lawyer and explaining them to you
'''Old Age Security''' provides Canadian residents with a monthly pension beginning at age 65. People between age 60 and 64 whose spouse qualifies for a low-income pension supplement can receive an allowance benefit. To qualify for the '''allowance''' as a spouse, you need to be living together for '''one year'''.
* ensuring your old mortgage has been properly discharged, if this is required
* ensuring you have no further obligation regarding your old mortgage if it is being assumed by the buyer
* confirming all payments for which you are responsible have been made
* arranging for you to sign the transfer documents


The '''Canada Pension Plan''' allows pension credits earned during a marriage-like relationship to be divided. This is true as long as spouses have lived together for at least one year and an application is made within four years of the separation date.
==The process to sell your home==


Private pension plans generally don’t provide benefits for people who aren’t spouses.
===Step 1. Get a valuation of your home===
You will want to know what your home is worth and what it should sell for in today’s market. One way to find out is to get a professional '''appraisal'''. This will give you a value for your home based on what comparable homes in your area have sold for and what it would cost to replace your home. The charge will vary with the appraiser, but is often between $200 and $750.


===Getting employment insurance benefits===
Another way to learn the value of your home is to contact some '''real estate agents''' who work in your area. They will look at your home and, for no charge, tell you what price they would list the home for and what they’d expect it to sell for. Keep in mind that realtors are not professional appraisers. You may decide to pay for the greater certainty of a professional appraiser’s opinion.
The federal government provides '''employment ensurance (EI) benefits''' to workers who lose their job. You may be eligible for EI benefits if you leave a job to follow your partner to a new place. Employment insurance defines a couple as '''spouses''' if they’ve lived together in a “conjugal relationship” for at least '''12 months''' in a row.


You can also get EI benefits if you leave your job to follow your partner if you’re:
===Step 2. Find out the details of your mortgage===
If you have a mortgage on your home, find out:


* expecting the birth of a child, or
* how much is owing on the mortgage
* caring for an immediate family member.
* whether the buyer can assume the mortgage (as we explained above)
* if the mortgage includes a prepayment penalty (also explained above)


Note that you won’t qualify for benefits if the government concludes there were reasonable ways you could have kept your job. These might include requesting a transfer or commuting from the new place of residence.
To find out these details, check your mortgage agreement and statements. Or check with your lender. If the mortgage can be assumed, ask your lender if the buyer will need a certain income to qualify.


===Coverage under your partner’s medical and dental plans===
===Step 3. Decide if you are hiring a real estate agent===
The BC Medical Services Plan covers people who live together in a marriage-like relationship. There’s no requirement about how long you must be living together.
Decide if you are going to sell your home yourself or hire a real estate agent.


Medical or dental plans or employers’ extended health plans generally don’t provide benefits for people who aren’t spouses.
If you decide to use a realtor, pick someone you trust and are comfortable with. Word-of-mouth is a good way to find a realtor you can work with. Ask friends, neighbours and work colleagues who have recently bought or sold a home who they worked with and how that experience went. The internet is a good way to locate realtors who specialize in properties and regions that may be of interest to you.


==Common questions==
{| class="wikitable"
|align="left"|'''Tip'''
[http://online.recbc.ca/licensee-search You can use the licensee search from the Real Estate Council of BC] to see if an agent is currently licensed.
|}
===Step 4. Sign the listing agreement===
If you hire a real estate agent, you will be asked to sign a '''listing agreement'''. We explain what to watch for above, under “What you should know.”


===Will I have to go to court?===
The agent will provide you with a copy of the agreement. Keep it for future reference.
If you separate, you may have to go to court to sort out some of your support and property rights. BC Provincial (Family) Court can help you deal with support for you and your children, plus guardianship, parenting arrangements, and contact. Family Court can’t deal with property issues. It also can’t make orders about who will live in the family home. For these issues, you’ll have to go to the BC Supreme Court.


For more on going to court, [[Provincial (Family) Court|see our information on Family Court]].
===Step 5. Consider any offer to purchase===
If you get an offer to purchase, review it carefully. Be sure you understand the effect of any '''subject to clauses''' (explained above).


{| class="wikitable"
{| class="wikitable"
|align="left"|'''Tip'''
|align="left"|'''Tip'''
You may be able to deal with some or all of your family law issues outside of court through '''mediation'''. You can try contacting a '''family justice counsellor'''. They are mediators who are specially trained to help families with guardianship, parenting, child support, and other family law issues. [https://www2.gov.bc.ca/gov/content/life-events/divorce/family-justice/who-can-help/family-justice-counsellors See the BC government website to learn more].
You may want to have a lawyer check the offer before you sign it. A lawyer can alert you to problem areas or signs of real estate fraud.
|}
|}


===Do I need to make a will?===
===Step 6. Complete the sale===
If you want to make sure your partner and children are taken care of after your death, you need to make a '''will'''. In it, you can say who you want your property to go to. You can also name a guardian. They’ll be legally responsible for your children after you and your partner die.
Sign the documents, receive your money and turn over your keys. Your home is sold!


For more, [[Preparing a Will and Estate Planning|see our information on preparing a will]] and [[When Someone Dies Without a Will|when someone dies without a will]].
==Common questions==


==Who can help==
===Do I have to pay a commission even if the real estate agent doesn’t sell my home?===
Normally, your real estate agent is entitled to be paid their commission when a buyer signs an offer to purchase, and you accept it. The buyer is someone who is “ready, willing and able to buy your home.” If the transaction later falls through, that doesn’t necessarily affect the agent’s right to be paid. The terms of the listing agreement will be key.
 
If you sell the home yourself while the listing agreement is active, you may have to pay the commission. Check the terms of the listing agreement.
 
You may even have to pay the commision is the home sells after the listing agreement has expired — if the agent had previously shown the home to the buyer or was the “effective cause of the sale.”


===With more information===
{| class="wikitable"
The wikibook ''JP Boyd on Family Law'', hosted by Courthouse Libraries BC, has information on unmarried relationships.
|align="left"|'''Tip'''
A lawyer can help you avoid situations where you have to pay a commission even where the realtor doesn’t sell your home.
|}
===Do I have to pay capital gains tax?===
If your home is your principal residence, you don’t have to pay tax on any profit ('''capital gain''') you make when you sell it. This is called the principal residence tax exemption on capital gains.


[[Other Unmarried Relationships|Visit website]]
If at any time during the period you owned the home, it was not your principal residence, you might not be able to benefit from this tax exemption. A lawyer can advise on whether the principal residence tax exemption applies to you.


'''Legal Aid BC''' has information about family law basics in its booklet ''Living Together or Living Apart: Common-Law Relationships, Marriage, Separation, and Divorce''.
==Who can help==


[https://legalaid.bc.ca/publications/pub/living-together-or-living-apart Visit website]
===With more information===
The '''Real Estate Council of BC''', the body that licenses real estate agents in the province, offers a guide on “Selling a Home in British Columbia.”


===Free and low-cost legal help===
* [https://www.recbc.ca/sellinghome.html Visit website]
Options for legal help include legal aid, pro bono services, legal clinics, and advocates. [[Free and Low-Cost Legal Help|See our information on free and low-cost legal help]].


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Revision as of 04:27, 7 October 2020

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Nathan Ganapathi and Anna Kurt, Ganapathi Law Group in October 2017.
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Selling a home is the biggest financial decision most people make. Learn what to consider before putting up the “For Sale” sign, and the steps involved in selling your home.

Key things to consider

You can go it alone or hire a real estate agent

You can sell your own home yourself. Many do. The costs of hiring a real estate agent can be substantial (as the seller typically absorbs the cost on the sale of a home).

But there are advantages to working with a real estate agent. Agents are keenly aware of market trends and can help you get the best possible price for your home. They are connected to networks of potential buyers you would have a hard time reaching on your own. And they can help you navigate a complex process, advising on questions such as:

  • What facts must you disclose?
  • What paperwork is required?
  • What about the existing mortgage?
  • Who ensures you will get your money?
Tip

Under the law in BC, real estate agents must be licensed. You can use the licensee search from the Real Estate Council of BC to see if an agent is currently licensed.

In signing a listing agreement

If you hire a real estate agent, you will be asked to sign a listing agreement. This is a contract between you and your real estate agent, setting out the terms for selling your home.

Most real estate agents use a multiple listing agreement. This means your agent can advertise and show your home to agents from other real estate agencies (and not just their own). In this way, many potential buyers can learn about your home.

Most listing agreements are standardized forms from the local real estate board. The agent may not have a lot of room to negotiate terms. But there are a few terms to pay particular attention to:

  • Who the agent is representing. A real estate agent can be hired as an agent for the seller, as an agent for the buyer, or (as we explain shortly, in very limited circumstances) as an agent for both the seller and the buyer.
  • The length of the agreement. Many agents prefer that the listing agreement continue for three months, but you can choose to list your home for a shorter period. If your home doesn’t sell within that time, you can either extend the term of the listing agreement or change agents.
  • The agent’s pay. The listing agreement sets the amount of the agent’s pay, or commission. In BC, commissions can be a flat fee or a percentage of the sale price of the home. We explain these two options shortly.

The real estate agent’s duties depend on who they are acting for

All real estate agents must act honestly and with reasonable care and skill in performing their work. They also have other duties that depend on who they are acting for.

A real estate agent can be hired as an agent for the seller, as an agent for the buyer, or (in very limited circumstances) as an agent for both the seller and the buyer. Under the law, an agent has to explain how these options change their duties to you.

When an agent is acting only for you, as your sole agent in selling your home, the agent has these duties:

  • a duty of undivided loyalty to you
  • a duty to keep your confidences
  • a duty to obey all your lawful instructions
  • a duty to account for all the money and property you place in their hands while acting for you

Under the rules in BC, real estate agents in the province can not practice dual agency. This means they can not act for both a buyer and a seller in the same transaction, or for two buyers who have conflicting interests. The sole exception to this rule is for property in a remote location that is under-served by real estate agents and it is “impracticable” for the parties to be represented by separate real estate agents.

Before practicing dual agency under this exception, a real estate agent must make a disclosure to both parties to the transaction. The disclosure must inform them of the duties and responsibilities of the agent to the clients, and the risks associated with a dual agency relationship.

The agent typically gets paid after the sale of your home

In BC, a real estate agent’s pay (or commission) can be a flat fee or a percentage of the sale price of the home.

A common approach is for an agent to charge 7% on the first $100,000 of the sale price, plus 2.5% on the rest. For example, if your home sells for $400,000, the commission under this approach would be $14,500:

Portion of price Commission 7% of $100,000 = $7,000 2.5% of $300,000 = $7,500 Total commission = $14,500 As the seller, you pay this commission to your agent. Your agent then shares it with the buyer’s agent. The commission is typically deducted from the sale proceeds of the home at the time the sale is completed.

If you have a mortgage on your home

If you have a mortgage on your home, you will need to deal with the mortgage in some way in selling your home.

One option to explore is whether a buyer can assume (meaning take over) the mortgage. If a buyer can assume the mortgage, this can save you money, avoiding the costs of paying out the mortgage on the sale.

Another option is paying off the mortgage when you sell your home. Many mortgages have restrictions on paying out the mortgage early. Some have a prepayment penalty, such as three months worth of mortgage payments. Sometimes a lender will waive the prepayment penalty if the buyer takes out a new mortgage with them, or if you take out a new mortgage with them when you buy a new home.

To find out if your mortgage can be assumed or includes a prepayment penalty, check your mortgage contract. Or check with your lender.

For more on mortgages, see our information on mortgages and financing a home purchase.

If you get an offer to purchase

"After our kids left for university, we decided to downsize. We got four offers on our home at the first open house. I had no idea there was so much to consider. Between the subject to clauses, the offer prices, the closing dates — it was dizzying. And that was before we even figured out the financing part of it."

- Jasmin, Surrey

If someone offers to buy your home, they will present an offer to purchase. This is a contract setting out the terms of the sale of your home. It is usually written on a standard form provided by the local real estate board. Once you and the buyer sign the offer, it is a binding contract of purchase and sale.

Your real estate agent is under an obligation to bring all written offers to you for your consideration. If several offers are brought to you at once, you are under no obligation to accept any one offer over another.

If there is anything you don’t like in an offer (including the price or the completion date), you can write in your own terms instead. This becomes your counteroffer. This is considered to be a new offer altogether. It becomes a binding contract of purchase and sale if the buyer accepts. If the buyer doesn’t accept your counteroffer, there is no agreement.

If the offer includes a subject to clause

Subject to clauses are conditions that must be met before a sale proceeds. Common subject to clauses a buyer may include in their offer are:

  • subject to the buyer getting financing (for example, a mortgage)
  • subject to the buyer getting a property inspection
  • subject to the buyer selling their home

If you get an offer with a subject to clause, make sure the buyer has only a short time to remove the condition. Your home may be off the market for the time it takes the buyer to remove the condition, and you will likely want to keep that period short.

As well, the subject to clause should be specific. Don’t accept a general clause, such as “subject to buyer obtaining satisfactory financing.” If the buyer changes their mind, all the buyer has to do to get out of the deal is to say they couldn’t get satisfactory financing. Instead, put details in the clause about the financing — the interest rate and principal amount the buyer is seeking to finance — as well as a deadline for when the buyer must remove the clause. A lawyer who practises real estate law can be helpful in this process.

You must disclose any defects to a buyer

As a seller, you must disclose any material latent defects about your home to a buyer. A material latent defect means a defect that cannot be discerned through a reasonable inspection of the property. This includes a defect that makes the home:

  • dangerous or potentially dangerous to the occupants,
  • unfit for habitation, or
  • unfit for the purpose for which the buyer is acquiring it, if the buyer has made this purpose known to the seller.

Common examples of material latent defects include:

  • the basement leaks when it rains
  • structural damage to the property
  • underground storage tanks are located on the property
  • problems with the potability or quantity of drinking water
  • damage caused by the illegal use of the property (for example, a marijuana grow operation)

Failure to disclose material latent defects can result in future problems, including legal issues if the new owner discovers problems that you were aware of and did not disclose.

What things in the home are included in the sale

When someone buys your home, all the fixtures go along with it, unless you and the buyer agree otherwise. Defining a fixture can be difficult: generally, a fixture is anything that’s attached to the home to the point where removing it would damage the home or require repair. The bathroom sink is an obvious example. As objects like chandeliers are sometimes items that homeowners are interested in taking with them after the sale of their home, it is important these fixtures are explicitly excluded from the contract of purchase and sale. Better yet, before you put the home up for sale, replace the chandelier with a simple, inexpensive replacement.

Tip

The appliances — such as your washer, dryer, fridge and stove — aren’t fixtures. They aren’t included in the sale unless you and the buyer agree otherwise. You may be able to use them as bargaining tools if the buyer wants them.

On the completion date

The contract of purchase and sale will state the completion date for the sale. On that day, legal ownership will transfer from you to the new owner in exchange for the purchase price of the home.

It is the normal practice for the buyer’s lawyer or notary public to prepare the documents needed to transfer the legal ownership. You, as the seller, may want to engage a lawyer or notary to act for you. Among other things, they can protect your interests by:

  • checking the documents prepared by the buyer’s lawyer and explaining them to you
  • ensuring your old mortgage has been properly discharged, if this is required
  • ensuring you have no further obligation regarding your old mortgage if it is being assumed by the buyer
  • confirming all payments for which you are responsible have been made
  • arranging for you to sign the transfer documents

The process to sell your home

Step 1. Get a valuation of your home

You will want to know what your home is worth and what it should sell for in today’s market. One way to find out is to get a professional appraisal. This will give you a value for your home based on what comparable homes in your area have sold for and what it would cost to replace your home. The charge will vary with the appraiser, but is often between $200 and $750.

Another way to learn the value of your home is to contact some real estate agents who work in your area. They will look at your home and, for no charge, tell you what price they would list the home for and what they’d expect it to sell for. Keep in mind that realtors are not professional appraisers. You may decide to pay for the greater certainty of a professional appraiser’s opinion.

Step 2. Find out the details of your mortgage

If you have a mortgage on your home, find out:

  • how much is owing on the mortgage
  • whether the buyer can assume the mortgage (as we explained above)
  • if the mortgage includes a prepayment penalty (also explained above)

To find out these details, check your mortgage agreement and statements. Or check with your lender. If the mortgage can be assumed, ask your lender if the buyer will need a certain income to qualify.

Step 3. Decide if you are hiring a real estate agent

Decide if you are going to sell your home yourself or hire a real estate agent.

If you decide to use a realtor, pick someone you trust and are comfortable with. Word-of-mouth is a good way to find a realtor you can work with. Ask friends, neighbours and work colleagues who have recently bought or sold a home who they worked with and how that experience went. The internet is a good way to locate realtors who specialize in properties and regions that may be of interest to you.

Tip

You can use the licensee search from the Real Estate Council of BC to see if an agent is currently licensed.

Step 4. Sign the listing agreement

If you hire a real estate agent, you will be asked to sign a listing agreement. We explain what to watch for above, under “What you should know.”

The agent will provide you with a copy of the agreement. Keep it for future reference.

Step 5. Consider any offer to purchase

If you get an offer to purchase, review it carefully. Be sure you understand the effect of any subject to clauses (explained above).

Tip

You may want to have a lawyer check the offer before you sign it. A lawyer can alert you to problem areas or signs of real estate fraud.

Step 6. Complete the sale

Sign the documents, receive your money and turn over your keys. Your home is sold!

Common questions

Do I have to pay a commission even if the real estate agent doesn’t sell my home?

Normally, your real estate agent is entitled to be paid their commission when a buyer signs an offer to purchase, and you accept it. The buyer is someone who is “ready, willing and able to buy your home.” If the transaction later falls through, that doesn’t necessarily affect the agent’s right to be paid. The terms of the listing agreement will be key.

If you sell the home yourself while the listing agreement is active, you may have to pay the commission. Check the terms of the listing agreement.

You may even have to pay the commision is the home sells after the listing agreement has expired — if the agent had previously shown the home to the buyer or was the “effective cause of the sale.”

Tip

A lawyer can help you avoid situations where you have to pay a commission even where the realtor doesn’t sell your home.

Do I have to pay capital gains tax?

If your home is your principal residence, you don’t have to pay tax on any profit (capital gain) you make when you sell it. This is called the principal residence tax exemption on capital gains.

If at any time during the period you owned the home, it was not your principal residence, you might not be able to benefit from this tax exemption. A lawyer can advise on whether the principal residence tax exemption applies to you.

Who can help

With more information

The Real Estate Council of BC, the body that licenses real estate agents in the province, offers a guide on “Selling a Home in British Columbia.”

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