Information & Advice > home sellers
1) 4 Factors in Selling
3) Planning Your Move
4) Closing Checklist
A. The List Price
The market value of a house is the price that a willing and knowledgeable buyer and seller will agree upon. Only the market value is of importance to the buyer!
Serious buyers with money and motivation quickly learn the market value of homes that meet their needs. They usually are not willing to waste time bidding and sometimes looking at overpriced properties.
Benefits of Competitive Pricing
- A more attractive price yields better exposure to serious buyers
- Less inconvenience for you
- Better response to advertising, signage, ads etc.
- Due to the interest competitive pricing can attract a faster sale with fewer conditions
- Attracts higher offers, one of the best ways to attract competing offers, either directly or indirectly
- When a property is priced too high and does not sell in the beginning, the seller reduces the price in an effort to promote a faster sale. As more time goes by, the seller continues to reduce the price. However, because less interest is generated the longer a property remains on the market, the price drops until the house finally sells at a price below market value.
Research indicates for best results: price within 2-3% of the market value.
B. The Condition of Your Home
The first five minutes are critical in selling your home! It has been said that buyers make up their minds in less than 5 minutes, and then spend the rest of the time rationalizing their decision. Their first impressions begin with the yard, the driveway, and the front door.
Here are a number of things you can do to make your house ready for viewing. Attending to them can make a difference of literally thousands of dollars in the market value of the property.
Click here to view checklist
Remember your stiffest competition is the brand new "model" home your buyer has just seen . . . with no children and no animals!
C. The Market Exposure Your Home Should Be Given
After you have show cased and priced your home, it is ready to take to market. There are a series of steps an experienced real estate agent will take to give your house the maximum exposure in the first few days and weeks that it can get.
These activities can include:
- Listing your property on the Multiple Listing Service (MLS), to notify the agent network who will bring you specific buyers for your property
- Putting a FOR SALE sign on your property
- Putting a lock box on your door for easy accessibility for other real estate agents
- Making Feature Sheets to highlight strengths of property
- Networking with their networking referral system
- Distributing "Just Listed" cards in your neighbourhood
- Various advertising methods
- Conducting an open houses for real estate sales representatives, agents, brokers and/or the public
- Virtual Open House Tour
- Caravan Bus Tour
- Special Invitation to be mailed to agents with current listings in your area
- Upload information on the internet
- Contacting homes in the surrounding area
- Your agent may or may not need the marketing activities above and probably will have additional activities.
D. The Final Terms of the Agreement of Purchase and Sale…”the Offer”
Even when a buyer and a seller come close to agreeing on the final price of the property, the successful completion of the sale can rest on many factors which must be included in the agreement of purchase and sale.
Some of the more common items that may receive attention, and therefore be items for negotiation between the two parties are:
- Conditional on Financing. If the buyer needs to find financing to finalize the agreement or the buyer is already approved for financing and the bank requires a satisfactory appraisal of the property, a condition of this sort is included in the agreement which must be met within a set period of time.
- Conditional on the sale of the buyer's home. Sometimes the buyer, whose home is on the market, but not yet sold, wants to agree that the sale be subject to the sale of his property. In other words the Buyer agrees to buy your home as long as they can sell theirs within a set period of time.
- Conditional upon home inspection by a qualified home inspector. The Buyer arranges and pays for an inspection of the home by a qualified inspector.
- Conditional upon satisfactory home insurance In some instances older homes that have had few mechanical improvements have experienced huge rate increases. These increases have made some properties too expensive to own.
- Closing dates. Some may want or need an earlier or later closing date than you would like. Be prepared for flexibility.
- What equipment, fixtures and chattels of yours are included in the sale price?
- Condition of the house , repairs the buyer may want or need to have done.
- How the mortgages are dealt with (sometimes the buyer asks a seller to hold a mortgage).
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Here is a brief summary explaining some of the costs you may incur when you are selling your property.
1. Real Estate Commissions. This is usually between 4% - 7% + HST of the sale price of the property. However, this could change depending on the nature of the agency relationship shared between the purchaser’s agent and the purchaser. If the transaction is one of property rental, the commission is generally one month’s rent, plus HST.
2. Survey Costs. In some cases the seller must provide a survey. If you have a current survey in your possession, and nothing has changed since it was conducted, this will usually suffice. A new survey will generally cost $700 - $1,200 in town, and possibly more in the country. Country surveys vary in price due to size of the area and the terrain.
3. Legal Fees; one for the lawyer (plus HST) and their service and one for the disbursements. Ask for quotes for both. The fee may be higher if there is a mortgage being discharged on the sale.
4. Mortgage Discharge. If your mortgage is being discharged prior to its maturity, there could be a penalty for early discharge. A lot of mortgage companies require a discharge fee to cover their administrative costs. Call your bank and ask for a mortgage discharge statement in advance of selling. This will minimize any “surprises”.
In the case of an institutional lender, many mortgages provide a "portability" feature, which means in effect that the interest penalty may be waived if the seller transfers the mortgage from the home they are selling to the home they are buying, if in fact that is the case.
Your agent can verify all this data in a “mortgage verification form” sent to your lender.
5. Other Expenses. All your final bills from utilities and suppliers should be fully paid up at the time of closing or shortly thereafter. These could include realty taxes, phone, hydro, oil, gas, cable TV, renovations, alterations, snow removal - all the bills which have to do with the house. Make sure all the companies and organizations involved are informed of the date of closing to ensure all final billings are made, and you are no longer responsible for any utility or tax charges subsequent to the date of closing.
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Click here to view checklist
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After Closing Checklist
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