14 IMPORTANT FACTS TO CONSIDER BEFORE YOU TRY TO SELL YOUR OWN HOME
Occasionally, one can see "For Sale By Owner" signs, and some owners think that selling their own home will not only save them money, but believe they have an advantage over the sellers that have their home listed by a reputable Real Estate sales professional. Before you decide to take on this very important and legally complicated process…remember not even most Real Estate Lawyer's recommend selling your own home yourself in today's market. Here are a few of the reasons why:
1. You are limiting your exposure to potential buyers (less than 10% of what a good real estate broker will generate) which theoretically means your home will take ten to fifteen times longer to sell on the market.
2. The longer a home is on the market the lower the selling price is. Why? Because most buyers think that if the home has not sold after this long... there must be something wrong with the home.
3. The selling/buying process begins AFTER the buyer leaves your home. Most sellers think that all it takes is for someone to see their home, fall in love with the great decor... and the offer automatically will follow. Remember that the buying process begins after they leave your home. If a real estate sales representative does not represent the buyer, and they are looking on their own…they usually leave the home and start to talk themselves out of the buying process. Real estate professionals are trained on how to overcome buyers remorse--a very common occurrence.
4. Because of the limited exposure you will very likely end up with a lower selling price. Remember, in order to generate the highest price possible for your home… selling means exposure. You need the maximum exposure possible, to generate the highest price possible.
5. Most buyers find it extremely awkward to negotiate or even to talk directly with sellers and therefore avoid FSBO properties.
6. Lack of negotiating experience and lack of pertinent information often will result in a lower selling price, or worse yet, a bungled contract and possible lawsuits.
7. The majority of qualified buyers are working with experienced real estate professionals.
8. Many serious buyers will pass by a FSBO home merely because they recognize that it is not in the real estate mainstream, this can some times make them wary.
9. As most local buyers now retain an experienced real estate sales person to represent them as their buyer-agency, you will probably be negotiating against an experienced professional.
10. Expected savings in broker's fees will also be greatly reduced if you offer a selling commission to entice real estate sales representatives to bring potential buyers.
11. If you are planning to use a Lawyer to help you negotiate the offer, then your lawyer's fees will be considerably higher.
12. Only real estate sales representatives have access to the up-to-date market information. News reports cannot approach the timeliness or specificity available to real estate sales people. Further, real estate sales representatives are involved in home sales much more frequently than the average homeowner is. This familiarity leads to a degree of expertise that provides an edge on negotiating and successful selling.
13. You only pay the commission to the real estate broker, if they successfully sell your home at the price you are happy with.
14. Accepting an offer is one thing, ensuring a safe and successful closing is quite another. Real estate transactions usually always have problems on closing. At times, expecting the Buyers and Sellers Lawyer's to fight it out or resolve the problems, can sometimes mean the deal is lost. This is the time that your experienced real estate professional, can be the most important. Your Real Estate professional can act as a great mediator. Lawyers MUST act only on their client's instructions and are not paid to negotiate.
Is now a good time to sell your house?
Thinking of selling your home but not sure if now is the “right time?” Talk to a REALTOR for sound advice on when to sell your home in the least amount of time for the best possible price.
First a REALTOR will help you examine your reasons for wanting to sell. The most common reasons why people decide to sell their homes include changes to their financial status, an employment transfer, a growing family or retirement. Today’s low interest rates have also made it attractive for many homeowners to “move up” to a larger home.
Whatever your reason, selling a house is a complicated procedure so it’s imperative to have a qualified real estate professional on your side. Because selling a home involves large sums of money and complicated legal documents, a REALTOR’s expertise can help a homeowner avoid costly mistakes.
Real estate cycles
Buying your home was probably the best investment you ever made. That’s because over the long term, real estate has proven to be a sound investment while at the same time offering you and your family shelter and a feeling of pride of ownership.
However, real estate is subject to the law of supply and demand which creates cycles in the market. A shortage of homes generally means prices rise. This cycle is commonly known as a “seller’s market.” Alternately, a surplus of homes can result in a slow down in home sales or even a reduction in prices and is often referred to as a “buyers market.”
One of the most important services a REALTOR provides is market analysis. Most people don’t have the time it takes to conduct the comprehensive market research required to accurately price a home. A REALTOR can give you up-to-date information on what economic and other factors are impacting current market conditions.
Which market is best?
Obviously, you will want to sell your home quickly and for the highest possible price. In a “seller’s market,” you often see many buyers competing for the same house resulting in top prices -- sometimes even over the original list price. However, if you are planning to purchase another home after the sale, chances are you will be competing in the same seller’s market faced with higher prices.
In a buyer’s market you may find you have to wait longer to sell your home for a fair price. The upside to selling your home in a buyer’s market is you’ll have more selection and pricing options when you go looking for your new property.
Although the current market cycle should influence your decision to sell, remember there are trade-offs to selling in either a buyer’s or seller’s market. Some people are concerned that if they trade up to a larger home in a buyer’s market they will lose some of their home’s equity in the sale. But, while you may sell your home at a “discount,” it’s likely you will purchase your larger home at an even greater discount. The advantage is you then own a larger asset with even greater potential for appreciation.
In Ontario, changing seasons and the weather can affect buyer demand. For example, fewer buyers may be out looking at homes during the cold and snowy winter months, but as a seller you will be competing with fewer homes on the market. Spring tends to be an attractive time for real estate sales as gardens start to look nice again and people come out of hibernation. Buyers with school-aged children like to purchase in the spring so they can move in over the summer. However, homes sell throughout the year so think of the season as only one factor in deciding when to sell your home.
There are many important issues that come into play when deciding to sell your home. A REALTOR can help you to determine if now is the best time for you.
Preparing your home for sale
When you decide to sell your home, many details come into play. One of the most important will be making your home as attractive as possible to potential buyers.
A REALTOR will help you look after all the ins and outs of selling your home including a plan to give your home strong “curb appeal” and improve its “saleability.” Your REALTOR can provide many tips and low cost suggestions to not only attract more potential buyers, but to sell your home faster and for the best possible price.
It’s true that first impressions count and the outside of the home speaks volumes about what the inside may look like. Often potential buyers won’t get past the front door if the outside of a home looks run down or shabby. Your REALTOR may suggest some simple “quick fixes” like a fresh coat of paint, flowers or shrubs and clean windows. Many of these suggestions are worth the minimal costs involved as they not only increase the saleability of your home, but could potentially add value equal to the money spent on paint for example.
With that in mind, your REALTOR will likely caution you to stick to minor improvements. Bigger, more expensive renovations or repairs are probably best handled by adjusting your price to reflect the cost of the repairs.
A home that looks well-cared for is most attractive to potential buyers. Take a close look around the outside of your home and assess whether you need to tidy up, paint, trim bushes, repair ripped screens or clean the windows. Consider renting a pressure washer for the day – these do a great job on dirty siding and eaves.
Lots of minor repairs can be done by the “do-it-yourselfer.” Things like fixing window screens, replacing the odd loose roof shingle, repairing door hinges and such are relatively simple. Advice is available at your local home improvement centre on everything from caulking windows to removing peeling paint to replacing screens.
Where to begin
Take a tour of your entire home to see what needs to be cleaned, what needs to be cleared out and what needs to be repaired. The following is an excerpt of a comprehensive checklist that can be found in the Ontario Real Estate Association’s booklet, “How to Sell your Home.” For a free copy of the booklet, contact OREA at 1-800-563-HOME or check with your local REALTOR.
Tips to prepare your home for sale
Inside your home:
Walls and Ceilings
Entryways and hallways
Closets and storage areas
Living room, dining room, bedrooms, den and study
Basement, furnace room, garage, attic storeroom
Outside your home:
Yard and environment