THE STEPS TO SELLING A HOME
1. Preliminary Planning
q Get together any pertinent information such as the deed, survey, tax bill, mortgage statement, utility bills, information on upgrades and improvements etc.
q Attend to minor repairs--loose doorknobs, leaky faucets etc. Ensure that the doorbell and all electrical fixtures work and replace any burned out light bulbs.
q Have the house cleaned. Kitchens and bathrooms should sparkle and clean windows are impressive. Watch for and remove cobwebs on the ceiling.
q Closets should not be overcrowded. If necessary, rent a storage locker temporarily or give away items you no longer use.
2. Select a Realtor
q Interview one or two agents who are experienced with your neighbourhood and your style of home.
q Get answers to any questions or concerns.
q Find out how they would market the property, discuss commissions and how much they offer to the selling agent and ask what they expect of you. Do they charge additional marketing costs to the selling agent?
q Do not be taken in by an agent who suggests the highest price but may not be able to deliver.
q Read Agency Relationships Explained provided by the Toronto Real Estate Board or Working with a Realtor published by the Ontario Real Estate Association and discuss agency issues with your realtor. Make sure you understand it.
q Choose a realtor with whom you have rapport, who listens to you and understands your needs and in whom you have confidence.
q The Canadian Real Estate Association website also provides excellent information at www.crea.ca
3. The Listing Agreement
q The listing agreement is a contract between the seller and the listing broker describing the property to be sold and the terms under which it is to be sold.
q The listing agreement is on a standard form provided by the local real estate board and must comply with their regulations.
q You are appointing a realtor to market the property for a specified length of time and agree to pay them a commission (usually a percentage of the sale price) for bringing an acceptable offer from a purchaser.
q On an MLS listing the listing broker agrees to share the commission with the co-operating broker who brings the offer from the buyer. You should discuss with your realtor how the commission will be split and how much they offer to the selling agent and whether they deduct marketing fees. This practice is growing but is considered unprofessional.
q You must also indicate whether you want the property to be advertised only by the listing broker or whether to allow other agents to advertise it.
q There is usually a holdover clause stating that if a buyer who was introduced to the property during the listing buys the property within a stipulated time period after the expiry of the listing you will still have to pay commission to the realtor. This is to protect the realtor from the situation where the buyer and seller make a private deal to wait until the listing expires to avoid paying the realtor who introduced the buyer to the property.
4. Pricing your Home
q Pricing your home right is the key to selling it quickly and for the best price.
q The seller sets the asking price for the home but ultimately the buyer determines the value.
q Homes sell quickly and usually for the most money when they are priced properly in the beginning.
q Your realtor will provide you with information about similar properties which sold recently and properties currently for sale.
q A good strategy is to list a little more than the price of properties recently sold and a little less than the competition.
q Highest prices are obtained when there are multiple offers which generate a "bidding war". This occurs when a property is perceived to be a good buy. Pricing it right can result in a sale price higher than the asking price.
q A buyer will pay a price similar to what he would have to pay for similar properties.
q Things that don't affect value are your original cost, the cost to rebuild it today, your investment in improvements, personal attachment, what you need, and certain types of improvements.
q The dangers of overpricing: reduces the number of showings, reduces advertising response, loses potential buyers, eliminates offers, helps sell the competition, can cause appraisal problems, extends market time.
5. Showing Your Home
q Your realtor may want to hold an open house for agents on the day the listing appears to facilitate many agents previewing it at once with the least inconvenience to you.
q It is your responsibility to have the house looking good for showings. It should be clean, tidy and odour-free, and pets and children should be out of the way. Curtains should be open in daytime and closed at night with lights turned on.
q You should be out or inconspicuous. Allow the agent to show the property without interfering. Do not get involved in conversation with the purchaser.
q Showings are by appointment and buyers will always be accompanied by an agent. The listing broker keeps a record of all the appointments.
q It is standard practice to provide a lockbox which makes a key accessible for agents to show the property when you are not home.
q Your agent may want to hold an open house for the public on weekends. This is a marketing strategy which is advisable in some situations but not always necessary. If they do hold an open house you should go out and leave it in their hands.
6. Dealing with Offers
q When someone prepares an offer they advise the listing agent who advises you and makes an appointment to present it to you.
q Usually both the listing agent and agent representing the buyer meet with you to present the offer. They read through it and explain it. You can ask for clarification of any questions of concern to you.
q You can request that the selling agent leave the room so you can consult confidentially with your agent to discuss price and terms. Remember the other agent may be the agent of the purchaser and anything you say will not be held in confidence.
q Your agent will explain any clauses and conditions and advise you what is normal wording and what is unusual or may be of concern.
q Offers are on standard forms provided by the local real estate board with many standard clauses to satisfy the lawyers.
q Besides identifying the parties and properties the offer lists all the items the purchaser wants included in the sale and any fixtures to be excluded.
q There is an irrevocable date and if you don't accept it by that time the purchaser may revoke it.
q You may either accept the offer as is, reject it, or make changes and sign it back to the purchaser to see if they are willing to accept your changes. If you make changes to it, you have rejected the original offer and they are no longer bound by it. They may either accept your changes, reject it or come back with a counter-offer. This process continues until either a deal is reached or negotiations terminate.
q The purchaser makes a deposit with the offer which is usually turned over to the listing broker once an offer is accepted and is held in their trust account to be applied to the purchase price on the closing date. The agent's commission is usually deducted from this deposit on the closing date and if there is a deficiency your lawyer is instructed to pay the balance of the commission owing from the proceeds of the sale.
q Once agreement is reached and any conditions are waived, the documents are handed over to your lawyer who prepares the transfer papers, deals with any adjustments, and meets with the purchaser's lawyer on the closing date to exchange the keys for the payment.