Table 1 — Types of Buyers and How to Target Them
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Knowing Your Home Is the Key
Knowing your product is the key to selling. Knowing information about your home will help you determine your target market, will allow you to answer buyers’ questions, and will let you decide how to sell your home, including whether you use a real estate agent or sell it on your own. Some of the most important things you need to know are the type of home you are selling, the type of ownership you have and how that affects what you can sell, and the features of your home and neighbourhood.
Types of Homes
The type of home you have — whether detached, semi-detached (often called a duplex or townhouse), apartment, condominium, or manufactured home/mobile home — will determine the type of market you are selling to. For example, a single-family detached home will be ideal for a young couple, a young family, or a first-time home-buyer. Young couples or singles, as well as professionals and investors, will be attracted to a condominium or apartment.
A condominium is a type of housing ownership, more formally known as strata title ownership, rather than a particular type of housing. (There is more detail on strata title later in this chapter.)
Title and Ownership
When you are preparing to sell a property, you need to understand the different types of home ownership and how they appear on the land title. The most common types of residential home ownership are: co-ownership (including joint tenancy and tenancy in common), strata title, co-operative, timeshares (including fee ownership interest and right-to-use ownership), freehold, and leasehold.
Understanding the different types of home ownership is important.
Co-ownership
Co-ownership occurs if property is owned by more than one person. This type of ownership is generally either by joint tenancy or by tenancy in common. A notary or lawyer should be able to explain the differences between the two types of ownership and how the co-ownership in your situation affects your ability to sell the property. A notary or lawyer can also tell you how you should be registered on the title.
Joint tenancy
When you purchase with a spouse or partner, you commonly have joint tenancy. When one partner dies, the other becomes the sole owner. The ownership automatically transfers to the survivor without having to go through probate. This feature is known as the right of survivorship. A joint tenant cannot leave the property interest in a will to a third party. If you and your spouse divorce, or you and a partner have a falling out, you may not be able to sell a property held in joint tenancy. Depending on how you are listed on the title, you may need your spouse’s or partner’s consent to sell. A lawyer will be able to tell you what legal interest each of you owns and what other options are available to you.
Tenancy in common
Tenancy in common is a form of co-ownership that may involve two or more owners. Each owner may or may not have the same amount of shares, rights, or interests. As a result, one party may sell his or her share without the permission of others.
Strata title
In strata title, you not only own your unit, but also share ownership of the common areas of the strata property, such as hallways, garages, and elevators. Because you share these common areas, you share the financial responsibility for their maintenance with the other owners of the building. This will be reflected in your monthly maintenance fees.
Co-operative
A co-operative is a type of ownership in which the property is owned in the name of a company. Buyers purchase shares in the company, which gives them ownership of a suite and often of a parking stall as well. In a condominium or co-operative, you will be governed by the strata corporation or company’s by-laws and regulations. You will be required to live under those rules and regulations and will be fined for violations. If you don’t pay your fines, assessments, or monthly dues, the strata corporation or homeowners’ association can put a lien on your home.
Timeshares
Timeshares are a relatively new concept in property ownership that generally fall under two main categories: fee ownership interest and right-to-use ownership. In fee ownership interest, the owner has a right to encumber, convey, or otherwise transfer the interest for all future time. In a right-to-use ownership, the buyer receives no registerable title. Instead, the owner of this interest has a contractual right to enjoy the use of the property for a specific period.
Many provinces do not currently have legislation specifically addressing timeshare ownership. If you have this type of property, seek the advice of a lawyer or your local real estate agent.
Freehold
A freehold interest is the same as “ownership” of property. The owner of a freehold interest has full use and control of the land and the buildings on it, subject to the rights of the Crown, local land-use by-laws, and other restrictions in place at the time of purchase.
Leasehold
A leasehold interest in land means the townhouse, apartment, or detached home is built on city-owned land. The term “leasehold” can also apply to single detached houses on farm land, on First Nations land, and so on. Leasehold interests are for a defined period of time. They can be for a week, a month, a year, 99 years, or any other specific period of time. The person to whom leasehold interest is granted is called a lessee or tenant, and the grantor of the interest is called the lessor or the landlord. If a leasehold has a fixed term of 99 years, for example, there will be no review of the lease rate for the full 99 years. If the previous lessee has lived in a building on the leasehold for 20 years, you may purchase the remaining portion of 79 years. The shorter the remaining portion, the less a buyer will pay for the leasehold interest.
If you are selling a leasehold property, provide a list of financial institutions that are receptive to financing this type of sale.
It is important to know that the sale of a leasehold differs greatly from the sale of a freehold property. For one thing, pricing does not reflect market value; you are only selling the improvements on the land, and not the land itself. If you are selling a leasehold property, financing may be a buyer’s biggest obstacle, as many institutions will not finance this type of sale. To help buyers, you should try to provide a list of financial institutions that are receptive to financing this type of sale.
Further, many institutions may want a larger down payment to protect themselves from buyers who simply walk away from the property should there be a problem down the road. Other financial institutions may want to make sure that the prepaid lease has a long lifespan, 99 years or more.
Positive and Negative Aspects of Your Property
When you prepare to sell your home, you need to make a list of all the positive and negative aspects of your property. Some of the positive aspects may be distance to school, access to transportation, distance to the city centre, and distance to parks and community centre facilities. Though it is tempting to exaggerate the positive features of your property, it is dangerous to provide anything other than an accurate representation