The information below is meant to give you an overall picture of the steps involved in selling a property. For more detailed info, please contact me. I will be happy to answer any of your questions.
Finding an Agent
You may meet an agent at an open house, have your friends refer an agent they know, or interview several to find one who can best work with you.
When meeting with you, an agent will discuss the market value of your property, work with you to put together a suitable marketing plan, explain what documentation is needed (location certificate, property taxes, deed, utility bills), tell you about the costs associated (lawyer’s fees, commission, and possible mortgage buyout), and give you a concise explanation of the forms used in listing and selling your property. An agent may also suggest improvements to increase value of your property.
An agent may suggest a market value on your home at your initial meeting or he/she may require additional information to calculate the market value. It is important to note that the agent who agrees to list your home for the highest price is not always the best choice – there is no guarantee that your home will sell for that price. Make sure you consider the entire marketing plan of any agent you chose to work with.
You will be working closely with your agent, so it is important that you reach an understanding with him/her regarding list price, frequency of showings, open houses, marketing, and feedback. Selling your house is a team effort between you and your agent.
Determining the Market Value
The single most important aspect of successfully selling your house is determining the fair market value. It can be very difficult for a homeowner to be objective about value – this is where your real estate agent comes in. Determining market value for both buyers and sellers is, after all, a large part of an agent’s job.
To determine the value of a property, your agent will compare it to similar properties in the area. An agent will look at properties which have sold recently, those that were for sale and did not sell, and those currently for sale.
Your agent will complete a CMA (comparative market analysis). This is a tool which allows an agent to evaluate the attributes of your house in comparison to other properties in the area. By looking at similarities and differences between properties, an agent can reach an estimated market value. It is important to note that this is not an appraisal; a CMA determines how much buyers are willing to pay for a property based on actual market activity.
It is important to reach an accurate market value before listing your home, as a fairly priced property will be exposed to more qualified buyers and may even generate competing offers. If a property is overpriced, potential buyers in a slightly lower price range will not see it and those who do see it will realize they can get better market value elsewhere.
The Marketing Plan
Ask your agent how he/she will market your home to potential buyers and other agents.
One of the most important marketing tools is the lawn sign. While some sellers feel the whole neighbourhood will be talking if a sign is put up, you should be aware that people who want to live in the neighbourhood will be looking for signs.
Another very important marketing tool for your property is the MLS (Multiple Listing Service). This is a database compiled by co-operating brokerages. Most agents find houses for their buyers through the MLS and agents notice when new listings are posted. Chances are it will be another agent who will bring a buyer for your house and the MLS is likely where the agent will find the property.
Other marketing tools an agent may use are: newspaper advertising, television advertising, posting on various internet sites, promoting the property at sales meetings, advertising and conducting open houses, and distributing feature sheets about the house to other brokerages.
The marketing plan relies on your co-operation – make sure you are aware of and agree with the marketing proposed.
The Listing Agreement
When you and an agent agree to put your house on the market, you will both be signing a listing agreement.
A listing agreement is a contract that gives the agent and his/her brokerage the right to offer your property for sale in exchange for terms and conditions set by you. The listing agreement contains: the list price of the property, whether the property will be MLS or exclusive, information about marketing the property, the amount of the commission, the expiry date of the agreement, and other information pertinent to the property.
Along with a listing agreement, an agent will also request information for the Addendum, a form which includes physical information about your property, such as room sizes, lot size, utilities available, location, assessment value, and taxes. This Addendum forms part of the Listing Agreement once it is completed and signed.
If you are living in the property you are selling, you will be asked to fill out a Property Condition Disclosure Statement (PCDS), a form which contains information about the major systems in your house such as plumbing, structural integrity, heating, water supply and explanations of any recent damage or repairs to your property. This form must be filled out and signed by the seller. The PCDS also forms part of the Listing Agreement once it is completed and signed.
Once you and your agent have signed a listing agreement, your agent will begin the process of marketing your house.
Preparing Your House for Showings
It is important to examine your home both inside and out to figure out what can be done to make sure it is being presented in the best possible way to potential buyers. Your agent can offer suggestions on typical improvements which will increase the value of your home or even on little touches that will make it more welcoming to those viewing it.
An agent will be able to help you figure out what kind of return you can expect on various improvements you may want to complete. Typically, interior painting and decor changes, bathroom renovations and kitchen improvements have the best return when reselling a house. An agent can help you with these decisions and can recommend professionals to complete the job.
If there is a showing or an open house scheduled, it is important that your house show as well as it possibly can. Things like keeping rooms tidy, having bathrooms and kitchens spotless, turning on lights, and clearing away clutter in high traffic areas will make potential buyers want to spend more time in the house, increasing the chance that they will make an offer.
Depending on the season, there are also many touches outside which will increase the curb appeal of your home and make more potential buyers want to see the inside. In winter, make sure walks and driveways are clear of ice and snow and that icicles are not forming above traffic areas. In summer, make sure your hedges and lawns are trimmed, any peeling paint is touched up and the windows are clean and operational. The front door and foyer are also important areas for first impressions – make sure your civic number is easy to read, your front door and bell are in good repair and your porch and foyer are neat and tidy.
Remember that first impressions are lasting impressions!
When potential buyers are interested in your home, they will make an offer through their agents. In some cases, an agent of brokerage may represent both the buyer and the seller – this is called limited dual agency and must be agreed to by both the buyer and the seller.
When your agent received an offer on your property, he/she will want to meet with you to discuss the various terms contained in the offer. While purchase price is often the biggest issue of an offer, other conditions such as the closing date, inclusions or exclusions, time limits for conditional clauses, or the deposit may be just as important to you. Your agent will go over the offer with you and discuss the pros and cons of the terms.
It may be that you will have more than one offer presented to you at the same time. It is your decision whether all the potential buyers know that other offers will be considered at the same time – this is something your agent will discuss with you when listing your property. If there are multiple offers, your agent will be able to help you work through each one to determine which offer is best for you.
When an offer is presented to you, you have three options: you can accept it, reject it, or prepare a counter offer. Your agent will be able to help you with these important decisions by giving you comparable market information, providing you with feedback from other showings, and examining market time and interest in your property.
When you accept an offer, it will contain a closing date. This is the date when the buyer will take possession of the property.
It is often assumed (and sometimes written in the agreement) that buyers will be able to take possession of the property by noon on the closing day. To avoid confrontations on moving day, it is best for both the buyer and the seller to have a clear understanding of when the house will be vacated.
In most cases, a pre-closing inspection of the property must be done by the buyers and their agent before the deal can be completed; this is often done once the house is vacant. Once this inspection is completed and the buyers are satisfied, their lawyer will arrange a transfer of funds and keys with the seller’s lawyer and the transaction will be complete.
It is expected that the property will be clean, vacant, and in the same state of repair as when the offer was made at the time of closing. If this is not the case, the closing may be held up until any issues are resolved.
If you are moving on the day of closing, be sure you have made adequate preparations so that your closing will not be held up.