So you want to sell the biggest possession you own? Not sure where to start and it all seems daunting? The simplest place to start is by figuring out what questions to ask when selling a house. We get asked a lot of really great questions all the time from clients just like you! Here are some of the ones we think you’ll find interesting!
With the number of For Sale By Owner companies popping up in the marketplace, you may be wondering why you should use a REALTOR® to sell your house instead of selling it yourself. Although the idea of reducing closing costs sounds tempting, there are many challenges that can come up during the selling process.
The most important factors in selling a home are exposure and proper pricing, which are usually the areas that private sellers struggle with the most. REALTORS® are immersed in the market. They know the neighbourhoods, they know how much value certain upgrades add to your home, and most importantly, they know what your neighbours have sold their homes for. All these things, along with their extensive training, helps a REALTOR® price your house competitively, which ultimately will sell your home faster.
By using a REALTOR®, you also increase the number of people that have access to your property. While you can list a private home on MLS® and reach that traffic, you are missing out on a REALTORS® network. REALTORS® work with both buyers and sellers, meaning that while they are helping you sell your house, they are also speaking with people who want to buy. Additionally, when listing, they have a toolbox of tried and true marketing techniques to get your house in front of buyers!
When it comes to negotiating with a prospective buyer, REALTORS® are worth their weight in gold. Real Estate contracts are very specific with many clauses to protect both parties, but only if you understand them. REALTORS® work with these contracts on a regular basis and know how to make sure that you are covered. Negotiations are also a highly emotional process, one where personal memories can cloud financial decisions. A REALTOR® acts as a knowledgeable, yet impartial party working for your best interests.
Often times, people associate closing costs with buyers instead of sellers and find themselves face-to-face with some unexpected payments come closing day. The cost most people are familiar with is REALTOR® commission paid out to both the buyer and seller agents. These fees, plus HST, are negotiated in the initial listing contract and are typically paid out of the sale price of the home and dealt with by the lawyer.
If you currently hold a mortgage on the property you are selling, you will be responsible to pay fees to the bank or mortgage company. You can expect a mortgage discharge fee, typically between $250 and $350, a mortgage discharge penalty, usually equal to the greater of 3 months interest rate or the interest rate differential, as well as a fee to register the mortgage discharge on title.
Prior to closing, your lawyer will prepare closing adjustments, which may result in you being owed money from the buyers, or you owing them. Typically these consist of items like property taxes or utilities that are pre-paid at set increments.
In the event that you are selling a secondary property, such a cottage or income property, capital gains tax will need to be paid to the government.
Finally, your hard working lawyer will want to get paid! You can expect the fees to range from $500-$1,000 plus HST, along with any possible disbursements not covered above.
There is no hard and fast rule about buying or selling first, however, there are definitely some important things to talk to your REALTOR® about before you decide. The first is the market for the type of property you would be purchasing and the market for the property you are selling. Does your ideal property type come on the market fairly often? How quickly do these types of homes usually sell? Often in a hot market, buying first can be beneficial, especially when you are looking for a specific location, for example, a certain school district. On the flipside, if the market is very active, you can be fairly confident that your property will sell quickly if priced properly.
The second big factor to consider is your financial situation. Are you able to get bridge financing? In the event that your sale fell through, could you handle the costs of both properties for a short time until you negotiated another sale? If you have no financial flexibility, buying first could put you in a precarious position, thus not recommended. Before deciding how to proceed, discuss the options with your REALTOR®.
While bidding wars have become commonplace in Toronto, they have yet to make their way to Barrie and the surrounding area to the same extent, and most likely never will. The concept of pricing your home below market value in the hopes of gaining higher bids is risky. Barrie, while an active market, does not have enough people to make bidding wars effective. A seller runs a much greater risk of underpricing and ultimately walking away with less than their home is worth.
Typically Real Estate moves in cycles with homes selling faster and for higher prices during the spring and fall market. With that being said, the length of those cycles has fluctuated a great deal to include February/March right through to October. During these times, a seller will find more people looking to buy a home, as well as more homes on the market for them to choose from. Ultimately though, the best time isn’t just about market cycles. It’s about finances, convenient times for moving and a host of other factors that you need to consider before selling your home. Your REALTOR® can weigh in on market conditions so that you can make an educated choice.
When we live in a home, we use the space and decorate it to best fit our family, however, those choices don’t always translate positively to a prospective buyer. Stagers market your home, highlighting it’s best features and making it a neutral and inviting space that will appeal to a wide audience. For a few hundred dollars, a stager will spend time reviewing every room in your home with a ‘buyer’s eye’, ultimately providing you with recommendations on enhancements you can make inside and out to make your property more desirable to a buyer. Following the consultation, they will provide you with a report so that you can start implementing the suggestions yourself. If DIY (do-it-yourself) is not your thing, most companies can arrange for the work to be completed for you or even provide furniture rental while your home is on the market.
Pre-inspections, while not necessary, can be helpful if you anticipate some problems showing up in a home inspection. When a buyer pays for the home inspection and asks for pricing adjustments, they are basing it on the advice of their home inspector. Sometimes these repair/replacement costs can be bang on, and other times they can err on the side of caution with a higher price tag. By having an inspection done yourself, you can shop around for the best price before making the repairs/replacements, which could save you money in the long run and ultimately give you some peace of mind when the buyer’s home inspections happens.
There are no rules about having a For Sale sign put on your lawn, however, to us it seems like a no-brainer! For Sale signs act as a 24-7 marketing tool for your property, allowing anyone that drives by to see that your house is on the market. Many potential buyers, particularly those new to an area, spend time driving around neighbourhoods looking for one that has the right feel for them. When this happens, all they have to do is take one look at the sign on your lawn to know that your charming home could soon be theirs.
Lockboxes are a great tool to make the process of selling your home a lot more convenient for you and potential buyers. Typically, when a buyer is interested in your property, their REALTOR® will arrange a showing through your REALTOR’S® office. All showings will be confirmed by you (according to instructions you have provided to your REALTOR®) and will follow within a specified time window. As a potential buyer, it is less stressful visiting an unoccupied home and easier to envision themselves in the space if they haven’t already met you and connected it with your family.
Open houses were once the quick and easy way to get a good look at an interesting property, however, with the growth of the internet, prospective buyers can get a relatively accurate sense for a property without ever leaving their home. With that being said, open houses aren’t necessarily a waste of time. They provide a great opportunity to get feedback from visitors on the pricing and condition of your home, which could prove helpful if your home has been on the market for awhile. Deciding to host an open house is a decision to make with your REALTOR® after weighing the pros and cons.
We realize you have lives and families and that having your home ‘showing ready’ at all times just isn’t possible. On the flipside, you don’t want your home to sit on the market for longer than it has to. Discussing your limitations with your REALTOR® is a good idea so that they can be sure showings are not requested at inopportune times, like your 3 year old’s bedtime. You may also want to consider visiting friends or family when your home first goes on the market, as the first few days is usually when you will get the most activity.
Closings can vary from a few days to a few months, however, 60-90 days is typical of most transactions. Specific timing can be negotiated, along with price and other factors, when responding to offers of purchase and sale.