Home Selling Tips
May 23, 2008 – 10:59 am
The For Sale By Owner Method of selling a home is not as difficult as most people think. Despite what expensive real estate agents may tell you, selling a home is not something that only they have the power to do.
To effectively sell your own home you will need to know the steps involved in the home sales process and perform them as good or better than an agent can on your own behalf.
Can you do this?
Of course, but not without diligent work.
Sell Your Own Home - Guide to Private Home Sales
The For Sale By Owner method of selling a home still requires you to do work in order to be successful but the benefits are very tangible:
- Save Money - selling yourself allows you to keep the 5% real estate agent sales commission. On a $300,000 home sale this translates into an equity savings of $15,000.
- Sell Faster - since you do not need to factor an agent commission into the sales price of your home you have the flexibility to offer your home at a lower sales price leading to a faster sale if desired.
- Negotiating Power - if you DO decide to work with a buyer’s agent you have the ability to negotiate a flat fee or reduced commission rate if they provide you with a qualified buyer. In this instance, you would still pocket the seller’s agent^ portion of the commission since you are effectively performing their role on your own behalf.
^ there are two types of real estate agents. Buyer’s agents who broker deals on behalf of home buyers and seller’s agents (also known as listing agents) who list and market properties on behalf of home seller’s. The 5% sales commission is split between these two parties when a successful deal is brokered. Both types of agents are not necessarily involved in every real estate deal as the example above has illustrated.
PropertySold.ca can help you every step of the way with your private home sale. We are Canada’s premiere "For Sale By Owner" listing service. Thousands of Canadian home buyers visit our website each and everyday to search our real estate listings.
We have helped hundreds of Canadians just like you to sell their own homes and we can apply our knowledge and expertise to your private sale.
Please read our short step by step guide below to find out if the private home sales method is something that you would like to learn more about.
Sell Your Own Home - Step by Step
Step 1 - Home Staging - Preparing your Home to Sell
The condition of your home is one of the most important aspects of the home sales process that you have complete control over. The old adage "presentation is everything" certainly applies here and should not be overlooked.
Buyers in general are attracted to homes that are clean, spacious and well lit with an attractive decor. Before placing your house up for sale brighten up your home, remove counter clutter, make sure all the rooms of the house are neat and tidy. Scrub and vaccuum all of the interior floor coverings and walls until they sparkle.
Making simple aesthetic changes to your property such as trimming the lawn and hedges, planting flowers, re-painting weather worn exterior surfaces as well as fixing any tiles or gutters that may be broken can be the difference maker between closing a sale and watching a qualified buyer walk away. Keep it tidy.
Step 2 - Pricing Your Home - Understand Your Market
The single biggest reason that many For Sale By Owner candidates fail to sell their homes is over-pricing their home.
Over pricing your home reduces buyer interest, makes other homes in your neighborhood appear to be of better value than your home and can have an adverse effect on mortgage applications once an appraisal of the home has been performed.
The real estate market dictates what your home is worth, not you. Home sellers need to understand this and price their homes within the market properly or a sale simply won’t happen.
Home sellers must find out what other homes in their area have recently sold for in order to find the correct price for their home. Talk to neighbors and other home sellers in your area, read online classifieds / newspaper real estate classifieds in addition to utilizing the same site that real estate agent’s in Canada use to help them set sales prices for their clients: http://mls.ca .
You will not have access to the "private agent’s" area where agent’s can view comprehensive home sales statistics but you will be able to view the sales prices for other homes currently for sale in your area. Use these listings to help you price your home.
These prices are based upon those very same stats you cannot access and are up to date reflecting current market conditions.
If you price your home 5% to 10% above the market price you are more likely to receive an offer close to the true value for your home than if you priced it 20% to 25% over. An inflated sales price hurts your credibility so keep your price within an acceptable range.
Step 3 - Hire a Real Estate Lawyer
Whether you sell yourself, or through an agent you should hire a real estate lawyer to handle the transaction. A real estate lawyer will cost you some additional money but it is wise to retain the services of a legal professional to protect your interests throughout the sales process.
A real estate lawyer can / will:
- help you evaluate complicated sales offers
- act as an escrow agent to hold any fund transfers (eg. down payments)
- evaluate complicated mortgages, leases
- review contracts and the closing process for the sale
- tell you what you will need to disclose to potential buyers about your home prior to the sale (you are legally obligated to provide a disclosure)
- help you acquire title insurance
The services of a lawyer are highly recommended to any sellers that are not intimately experienced with the home selling process. Spending a relatively small amount of money for a professional to look after your best interests can save you a lot of money and headaches.
Step 4 - Marketing Your Home - Exposure
Want to sell your home fast? Invest money in as many advertising methods as you can comfortably afford. A combination of a yard sign, local print advertising and an internet property profile are the most effective means at the home seller’s disposal.
PropertySold.ca can help you with your property marketing. Our website is currently receiving over 80,000 unique visitors a month from all across Canada. We are one of the fastest growing real estate websites in Canada with extensive experience in private home sales.
PropertySold can provide you with a comprehensive online property profile on our website in addition to yard signs, bi directional corner signs, personalized listing URL’s and profesional sales tools. Listings on our website are indexed by the major search engines and receive direct traffic from internet searches in addition to our main website traffic. Combine PropertySold.ca’s marketing service with a classified ad in your local newspaper and online and you have effectively covered the 3 main marketing options available to the private home seller.
Writing a Sales Ad:
Most people will only scan a property profile so it is important that your listing and sell ad stand out. Writing a long winded, flowery description of your property will not help you to sell it faster. People like short, to the point descriptions that stick to the main facts about the property. Mention facts such as the number of bedrooms or bathrooms but keep your description to the point.
You may want to include text such as "Priced Below Market" or "Close to Subway" if the feature may trigger a faster sale. Browse the PropertySold.ca website and view a few property profiles. Find the one’s that you judge to be buyer friendly and copy their approach when writing your own ad.
Photos:
Creating a profile of your property without including photographs is a sure-fire way to not sell your house. No one is going to give you an offer without seeing what the home looks like. Make sure you take as many pictures as you can (digital cameras offer a relatively inexpensive way to take as many pictures of your home as you need without wasting film). Include as many photos with your online listing as you are allowed (with Propertysold you can include up to 20 images with your listing). Make sure to take both interior and exterior pictures along with pictures of any special features on your property such as a pool or hottub.
Lawn Signs:
A lawn sign is one of the most powerful marketing tools available to the home seller. A lawn sign tells passerby traffic that your home is on the market. Yard signs attract attention and provide a potential buyer with your contact details and the URL to view more information about your property online. A professionally designed yard sign (like the one’s PropertySold can supply you) improves your credibility and drives buyers to your online listing where they can get more information. This step should not be overlooked.
Online Property Listing:
Listing your property online allows you the flexibility of having real estate buyer agents contact you with potential buyers. If a successful deal is brokered with a client that the real estate buyer agent introduced to you then you will have to pay the buyer agent a negotiated commission fee, typically 2.5% - 3%. You would still keep the "seller agent" portion of the commission since you are essentially performing this role for yourself but having an online listing is essential to the sales process. Your online listing will also provide leads through searches at the for sale by owner portal website.
Feature Sheets:
You should make color copies of your online listing and distribute them to as many busy places as you can such as your office or gym. Optionally, you can make them available in a box near your yard sign for passerby traffic to grab.
Step 5 - Negotiating a Potential Deal
If you receive an offer to buy your home, either directly or through the buyers lawyer, you should immediately consult your own lawyer. There is a short period of time (typically 72 hours), known as the Irrevocability Period, where the seller can cancel or amend the offer.
At the end of this period this offer becomes a legally binding contract. It is important for the seller to be aware that offers can be quite complicated and will often include special clauses that favor the home buyer. For this reason it is highly recommended that you consult with a lawyer to make sure that your best interests are attended to.
There are a number of pitfalls that can be written in the terms and conditions for an offer that can cause a deal to collapse. Be careful to avoid contingencies that especially favor the home buyer such as linking the escrow closing date to the closing date for the buyers current home sale.
It is also important to find out as much as you can about your potential buyer such as; are they pre-approved for a loan and how much of a loan are they seeking (what is their down payment amount). Money lenders tend to stay away from deals where the purchase price of the home is higher than the next comparable sale and the buyer is putting down less than a 10% down payment. If you price your home too high the buyer may not be able to get financing!
On any offer you accept make sure your money will not be in escrow for longer than 30 days. Also, if you receive more than one offer do not counter offer more than 1 offer at a time. If two buyers accept your counter offers at the same time you could end up in some legal trouble.
When negotiating the final sales price of your home be sure to remember that a buyer will rarely give you their top offer.
Step 6 - Home Inspections
All standard real estate contracts allow the prospective home buyer the right to inspect your home and property. A home seller can also arrange to have a home inspector look at their home to identify anything that should be fixed prior to attempting to sell. This can help provide credibility and trust from potential buyers and show that you are being pro-active in identifying and fixing problems with your property.
If a potential buyer schedules a home inspection and they find a lot of problems with your property, they may kill the deal so make sure you are fully aware of any shortcomings your property may have prior to placing it on the market and fix them.
Once the Inspection process is complete from the buyer’s perspective the buyer will make an application to a mortgage lender to secure the funds for the purchase.
Step 7 - Buyer Appraisals and Mortgage Concerns
After a buyer applies for a mortgage, the mortgage lender will:
- order an appraisal of the home (to ensure the buyer is not overpaying)
- order a title search to determine if the property has liens on it
- issue a "commitment" - the buyer must complete all conditions listed on the commitment
Before closing the sale, make sure to contact your mortgage lender and let them know you will be paying off the remaining balance on your mortgage. Also contact your local utility companies and let them know the date to shut off your services on your behalf.
Step 8 - Closing the Deal
On the closing date the home buyer is allowed to perform a walk through of the property to ensure that all agreed to repairs have been performed and that the home is in the same condition as when the buyer made their offer. If a problem arises at this point, all monies are held in escrow while the problems are resolved.
Typically, closings will occur 30 - 45 days from the date the sales contract was signed. Your lawyer will handle the details of the closing on your behalf ensuring that; all money is collected, loans or liens are paid, the deed is transfered and issue insurance to make sure there are no issues with title. A lawyer will write you a cheque for the funds you are due from the transaction, less expenses within 1 - 2 business days after the closing.
If you would like help with your private home sale in Canada please visit our main website at:
Propertysold.ca Inc. - Canada’s Private Home Sales Leader
More Information:
For all of your real estate questions please call PropertySold.ca Inc. today at 1-866-686-9929 and speak to a customer service representative. We have licensed real estate professionals on staff ready to take your call right now.
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