Step by Step Seller’s Guide
Is it a time for you to Sell Home ? There is a myriad of reasons why people decide to sell their homes and no matter what, there is one common thing, which will unite all Sellers – desire to get Top Dollars from the sale of their existing homes. In addition, people want to run this transaction as quickly and as smoothly as possible. That is my goal too. I love when my clients are happy, because of getting the good or even better deal in the shortest period of time.
It is always a good idea, before you will start the process of selling your home, to allocate the reason why you are moving. Is it the insufficient number of rooms or floor area or on a contrary there are too many? Are you simply get ready for something better than what you have now? Have you change the job and you now spend too much time commuting there and back? Maybe, a desire to get some cash for investment or start your own business drives you? Or you are just looking for change? A full analysis of your current situation will be a great foundation for your next move. After the reason or number of it are detected you may move forward. What going to be your next step?
I will provide you with step-by-step process of selling your home.
Step 1: Evaluate the market and decide when to sell home.
The supply of homes on the market exceeds demand.
High inventory of homes. Few buyers compared to availability. Homes stay on the market longer. Prices are stable or perhaps dropping.
Buyers spend more time looking for a home, and when they negotiate, they usually have more leverage.
The number of homes on the market is roughly equal to the demand.
Demand equals supply. Sellers accept reasonable offers. Homes sell within a reasonable time period. Prices generally remain stable.
There is less tension among buyers and sellers. There is a reasonable number of homes to choose from.
The number of potential buyers exceeds the supply of homes on the market.
There is a smaller inventory of homes with many buyers. Homes sell quickly. Prices usually increase.
Prices may be higher or perhaps climbing. Buying decisions must be made quickly. Conditional offers may be rejected.
How quickly do you need to sell your home?
In a seller’s market, top price and a fast sale can go hand-in-hand. In a buyer’s market, more sellers are competing for your potential buyer. If you have to sell right now, consider lowering your asking price a bit to speed up the sale.
Seasonality. Do home sales get frostbite?
Yes, that’s true! Winter and summer markets tend to be slower, and on a contrary, spring and fall markets are more active. Regardless, there are always people looking to buy and seasonality is only one of many factors to consider.
What if you are also buying a home?
When market is hot, as it is now, and prices are rising so fast, time is an essence. When you sell your home, you want to get top dollars for it. Moreover, if I would be selling mine, I would want the same. But, step aside and look at the situation from another angle: If you sell your existing home for a ‘high’ price, you’re probably also buying at a high price. If you are upgrading to a larger home, this actually works against you and you need to pay a bit more attention to the market. If you’re downsizing from a bigger home to a smaller home or a condo, then the time may work hand on hand with you and be your best ally.
To buy or sell first?
The eternal question, same old as – what was first egg or chicken? Many people are able to time their sale and purchase so they happen on the same “closing date”. As a buyer, you can make your offer “conditional” on the sale of your existing home to make sure you’re not left paying for two homes. As a seller, you can try to extend the “closing period” to give yourself more time to find your next home. A REALTOR can provide advice and counsel during these kind of negotiations.
What if you find your new dream home before you’ve started to sell your old one?
Talk to your existing mortgage lender about “Bridge Financing”. This is when your lender (the bank) agrees to lend you the down payment for your new dream home, while you still cover the mortgage on your existing property.
Sell with a REALTOR, or go it alone?
Real estate transactions are complex, time consuming and involve a lot of legal documentation. Your REALTOR is knowledgeable and highly motivated to help you get the most for your home. Before flying solo, truly know what a can be offered to you. I can provide you really attractive bulk deals when you buy and sell with me.
Step 2: Organize your finances if you still have mortgage
Discharging your mortgage
Many people use the proceeds from the sale of their home to pay off (“discharge”) their mortgage. If you have what is known as an “open” mortgage, you can pay it all off without any penalties. If you have a “closed” mortgage, be prepared to pay a penalty.
A “portable” mortgage means you can keep your mortgage money to buy a new home, without penalty. This can be a real bonus if the interest rate on your mortgage is lower than existing rates! If your new home is more expensive, you’ll have to borrow the extra money at the current rate.
Maybe the buyer is willing to assume your mortgage
Your mortgage may have a feature that allows the new buyer to take over your mortgage. If the interest rate is lower than existing rates, this can be a very enticing selling feature for your home.
Step 3: Find a REALTOR who is right for you
There are many reasons why a REALTOR is essential when selling your home, but which is best for you? Don’t simply go with the first Sales Representative who suggests the highest asking price. Ask around, talk to a few, and you’ll soon find the one that’s right for you. Your REALTOR is a trained professional who knows all aspects of the real estate market. A Sales Representative will save you time, money and hassle.
As with purchasing a home, you want to list with the one who is the expert in your area. There will be a few REALTORs, who are knowledgeable about your neighbourhood. Call them up and interview them. Maybe the one who worked great for you mom, will not impress you!
Interviewing candidates don’t hesitate to ask questions. Finding the right REALTOR is about a partnership, so screen a few before deciding. Make sure you feel comfortable with him or her and that they show a genuine interest in helping you.
Ok, you got the Sales Representative now! Great!
What is your next step?
Step 4: Determine your home’s asking price
Lots of people out there want to buy your home. The right asking price will attract attention and get you maximum return. A good REALTOR should prepare Comparative Market Analysis, which can help you set a right market value on your home to get the most out of interested buyers.
If the market is extremely Buyer’s or Seller’s, than different marketing strategies can be used. But in balanced market you don’t want to set your price too low or too high.
Setting too low a price means you could miss out on thousands of dollars that some buyer would have paid. Setting too high a price can scare away willing buyers and leave your home on the market for too long. What can harm the selling price dramatically. When you lower the price, people may assume you are under pressure to sell, and lower their offers even further. REALTORs know the general factors affecting your market, so work with them to get a price that’s right for you.
Using the extensive background information available to REALTORs through a real estate Board’s MLS System, I can compare your home to a collection of similar homes that have recently been sold in your area. No two homes are the same, but I’m very good at adjusting their calculations according to the differences.
Step 5: Sign a listing agreement
Signing the listing agreement officially gives your REALTOR the green light to start selling your home. The “Listing Agreement” authorizes your REALTOR brokerage to market and sell your home. This agreement serves three purposes.
- It defines your relationship, including the limits of your REALTOR’s authority.
- It provides detailed information about your home which can be placed on a real estate Board’s MLS System to help potential buyers find you.
- It forms the basis for drafting offers on your home.
How to read Listing Agreement.
This describes the legal relationship between you and the real estate brokerage, and sets a time limit for the REALTOR to sell your home.
Exclusive or Multiple Listing Service®?
“Exclusive Listing” means that only your brokerage can find a buyer for your home. REALTORS generally recommend a “Multiple Listing”, which allows them to put your home on a real estate Board’s MLS System – a great tool to market your home and help find a buyer.
You have the final say over this magic number, but your REALTOR® will have very useful advice on what price will attract buyers. Learn more about choosing the right asking price in Step 4: Determine your home’s asking price.
Real estate commission
This may be a flat fee or a percentage of the final sale price, but not both. The compensation is agreed upon between you and the individual brokerage.
A physical description of your property
Your REALTOR will itemize the lot size, your home’s age, the style of construction, number and size of the rooms, and any outstanding selling features such as “backs onto ravine” or “fabulous kitchen renovation”.
This includes the lot number, land surveys and the zoning code.
Let people know the numbers like the minimum deposit you require or if you have a low-interest rate mortgage that can be assumed.
This lets everybody know how long you need to move out once your home is sold. 60 or 90 days is typical, but if you can be flexible this may help sell your home faster.
How the home will be shown
Your REALTOR can make the arrangements for viewing appointments. Any specific instructions, such as “make sure the cat stays in” can also be noted.
What exactly is included in the price? Chattels and fixtures
Chattels are movable items like washers and dryers, microwaves and window blinds. They’re not automatically included in the sale, but sellers will often include them to sweeten the deal.
Fixtures are permanent improvements to a property like central air conditioning, installed lighting and wall-to-wall carpeting. Fixtures are assumed to be included in the sale of the home unless you note otherwise. Maybe the dining room chandelier is family heirloom that you wish to take with you. The line between chattel and fixture can get blurry, so go over every item with your REALTOR to make sure you have no regrets when it comes time to sell your home and everything that comes with it.
Step 6: Prepare your home for sale
Yes, first impressions matter.
It’s nearly impossible to replace the initial flurry of interest and activity a new listing will generate. REALTORS in your area will want to see your home right away and tell their buyers all about it. Be sure you’re priced and poised to capitalize on this first wave of excitement.
You’ve lived in your home for a while now; use your REALTOR’s fresh set of eyes to your advantage. Break out the mop and the paintbrush. It’s time to give your home a mini-makeover. Here are all the little things you can do to attract the big offers.
Now’s the time to address your home’s little imperfections: the hole in the screen door, the chipped paint on the baseboards, and the mess in the basement. Print out a copy of my Is Your Home Ready For Showing? Checklist and take a thorough tour of your home.
Get rid of clutter
Your house will feel a lot bigger and more inviting when you clear out those closets, remove bulky, unused furniture and rearrange the remaining pieces to make the best use of space.
If you haven’t used something in the past year, toss it, donate it to charity or sell it.
Cleaning is the single most cost effective way to make your home more attractive to buyers. Floors, windows, walls, doors, baseboards – everything! Give extra care and attention to the bathrooms and kitchen. And once it’s all clean, keep it clean! You never know when your ideal buyer will visit.
Some repairs are absolutely vital, like a leaky roof or basement and unsafe electrical problems.
Otherwise, fix all the little things like leaky faucets, doors that squeak, and small cracks in the ceiling.
Depersonalize your home
You want buyers to walk through your house and feel like it’s their home, not yours! Things like a cluttered wall of family portraits or your trophy collection are guaranteed to prevent buyers from emotionally placing themselves in your home. Remove everything that’s too much about you.
If you haven’t used something in the past year, toss it, donate it to charity or sell it.
Never underestimate the power of paint
Strong colours on the walls or wild wallpaper make it hard for buyers to imagine their furniture in your house. Consider repainting your home in bright, neutral colours that will enhance a room’s size and look more inviting.
Next to cleaning your home, paint is the most cost-effective way to increase your home’s appeal.
Add some beautifying touches
You don’t need to spend a fortune to make a big difference. Replace tattered old curtains with some fresh draperies. Mirrors on the wall help rooms feel more spacious. New houseplants add undeniable appeal. And on the outside of your home trim the trees, weed the garden and consider planting a few new flowers to make a great first impression.
Don’t get so carried away with prepping your home that you forget why you’re doing this – to get more money! You need to consider two things before making any improvements.
- Will this make my home more desirable to buyers?
- Will this increase the value of my home more than it costs me to do it?
Your REALTOR® may also be able to offer useful tips and advice when it comes to prepping homes so you can get the most out yours when it comes time to sell.
Step 7: Let your REALTOR market your home
It’s time for your REALTOR to do their thing with a few old-fashioned, and some new-fashioned, marketing tools.
FOR SALE SIGN
DEDICATED WEBSITE FOR YOUR HOME
LISTING ON MLS
CENTURY 21 AND OVER 30 OTHER WEBSITES
HIGH QUALITY PRINT MATERIALS
Ultimately, your home itself becomes a selling tool
Make sure your home looks its finest
Your best buyer may just walk in off the street and anytime!
Lock away valuables
Most folks are decent, courteous and honest, but it’s wise to stash away jewelry, cameras and other small valuables.
Attend to any hazards
Is there an electrical cord somebody could trip on? Is there a chair that will collapse if somebody actually sits in it? Fix it, or lose it.
Avoid cooking foods with strong aroma
and reduce cooking at all to a minimum. Almost nobody’s dream home smells like smoked herring!
The best way you can help: Don’t be there
You want people to feel relaxed and daydream that your home is their home. This just isn’t possible with you there. Go see a movie, or take your pets on a field trip.
A “lock box” is a small, secure box that’s affixed to your front doorknob. It’s a mini safe with a key to your house inside. REALTORS® are given a combination to the lock box, so they can show your home to interested buyers.
Step 8: Add a lawyer to your team
When selling, it’s essential to have a lawyer handle all the various legal documents that change hands. Before you agree to a lawyer, make sure he or she is experienced in real estate, ask how they structure their fees, and get an estimate of all the legal costs you can expect.
You’ve probably already worked with a real estate lawyer
The most logical candidate is the lawyer you hired when you bought your home. He or she is already familiar with the property and may have even prepared the purchase documents. If you were satisfied with their work and fees, look no further.
Consider other ways to find a lawyer
Ask the people you trust, like friends, family, or business associates if they know a lawyer with substantial real estate experience. REALTOR can give you the names of several lawyers so you know your home will be in the right hands.
How your lawyer will help with the sale
Your lawyer will review important documents that require your signature. The most critical of these is the “offer” submitted by the buyer. You will be legally committed to anything you sign, so know exactly what you are agreeing to.
Step 9: Receive an offer
All of your hard work has paid off, but you won’t know exactly how much it’s paid off until you see the offer. This is an exciting, often emotional time, so be prepared.
Your Sales Representative can walk you through the process and will present you every offer that’s submitted. The buyer’s REALTOR may be there too. He or she represents the buyer’s best interest in the negotiation. The buyer will likely not be there, so you can review and respond to their offer without any awkward pressure. Your eyes will be immediately drawn to the price! Here’s where emotions can really kick in. This isn’t a poker match, but remain calm. Your Sales Representative can provide advice before any judgments are made.
Discuss the offer
You may want to ask your REALTOR for advice on the merits of the offer. Maybe it’s time for a high-five, or maybe it’s time to plan your counter offer. You may also wish some private time to discuss things with your partner.
Three options when responding to an offer
You can accept the offer
You got the price you were hoping for, maybe even more! The closing date looks good and there are no fussy conditions. Sold!
You can Sign Back the offer
This offer is close, but something’s not quite right. Now the delicate art of negotiation begins, by “signing back”.
You can reject the offer
This offer isn’t even close.
Reasons why you may want to “Sign Back”:
- You want more money – This is by far the most common reason people “sign back”. Everybody wants to get the most for their home, and as the saying goes “if you don’t ask, you don’t get”. Go for it, but don’t get too greedy and insult someone who has made a fair offer.
- You want to change the Closing Date – Maybe your buyer wants to move in sooner than you’d like. Maybe you haven’t even started looking for a new home! You can “sign back” a compromise closing date. Perhaps the buyer will compensate you for the inconvenience of living in a motel for a few weeks.
- There may be some undesirable conditions on the offer
Conditions are points of contention that must be fulfilled in order for the sale to go through. Here are some common ones.
- Buyer to obtain financing – If the buyer doesn’t have a mortgage lined up, he or she will often put in this condition. The sale will only go through if the buyer can get the mortgage he or she wants.
- Approval to assume mortgage – You have a great mortgage rate on the property and the buyer only wants your home if he or she can also take over your easy payments.
- Sale of purchaser’s home – The buyer hasn’t sold their existing home yet and he or she wants to be protected from the expense of owning two properties. You might want to ask their REALTOR about the other home and its odds of selling soon.
- Property Inspection – This condition is becoming standard practice. Refusing a home inspection before sale is highly suspicious to a buyer, and may spoil the deal.
The art of counter-offers and negotiation.
Successful negotiation is one that leaves both you and the buyer feeling satisfied with the outcome. This is a highly emotional time, so be sure to regularly “check your head,” and ask yourself “How important is this particular detail to me? Am I willing to jeopardize a sale over this?” Remember once you “sign back” an offer, you are releasing the buyer from their offer and he or she is free to walk away. Your REALTOR can help you every step of the way so you don’t end up doing something you may regret later.
Step 10: Close the sale
Your negotiations were a success. But before your house is truly sold, it’s time for the vital final steps known as “closing”. Your REALTOR and Lawyer will take care of the many complicated and time-consuming legal maneuvers. That’s why you hired pros.
You still have plenty to do. Your closing checklist should include:
- Advise your Lawyer that an Agreement has been signed. Make sure your lawyer is ready to close the transaction.
- Immediately begin satisfying any conditions of the agreement that require action on your part before the set date of completion creeps up on you.
- Notify your Lawyer and lending institution if the buyer is assuming your mortgage.
- Contact the utilities, telephone and cable companies about transferring or removing service.
- Call your insurance agent and arrange cancellation or transfer of your homeowner’s insurance.
- Contact a moving company to arrange your move on or prior to closing date.
- Send out your change of address notices and advise the post office. Notify the Ministry of Transportation about your new address for driver’s license and registration.
- Notify your REALTOR immediately if anything changes about your property or your situation.
Contact with your Lawyer
- If you plan to “discharge” or pay off your mortgage with proceeds of the sale, your lawyer will obtain a statement from your lender showing your outstanding balance on the mortgage, and any penalties you’ll have to pay to discharge the mortgage.
- A few days before closing, your lawyer will ask you to sign the paperwork that enables the title to be transferred to the buyer.
- On closing day, your lawyer will receive and distribute the proceeds from the sale, pay off your mortgage and other costs, and give you a cheque for the net proceeds.