SELLING YOUR HOME
So, you've decided you want to own a home. It's a popular dream. For most people, with the right planning, it can become reality. But there is a lot to know before you begin moving. We’ll take you through the planning process step-by-step, to determine exactly the kind of home that's perfect for you.
When is the Best Time to Sell Your Home?
Everyone seems to have specific ideas on when the right time is to sell. Some base their theories on the overall economy, while others will tell you that there are key buying months that you'll want to capitalize on.
If you're not buying and selling strategically or for investment, the best time to sell is really when you feel your existing home will not meet your future needs. The best reason to purchase a new home is to take advantage of your family and lifestyle changes. Do you wish to be closer to a school? Are you switching jobs? Do you have an aging parent to care for?
In Canada, weather and holidays do play a factor. Almost no one goes house hunting around Christmas, and few give up their summer vacations. Of course, those with school-aged children are less likely to move during the school year and summer is an ideal time. In some areas, there is a definite "spring cycle" -- perhaps it's a bit of spring fever and a wish to break out of the bonds of winter.
Some gamblers look for winter bargains and then try to sell their homes during the spring cycle. But overall, that could be more tension and aggravation than you wish. And the monetary results may be disappointing.
Another key factor to consider is the economy. Are interest rates higher or lower in comparison to your current mortgage? If they are higher, you may want to stick with your current home, as your new mortgage payments could be uncomfortable. If rates are lower, you might be able to trade up to a more expensive home without a significant increase in your monthly mortgage obligation.
What's more, if it's a buyers' market, you may be in a strong position to purchase a new home, especially if you have accumulated some equity in your current property.
Are There Costs Involved in Selling?
Unfortunately, the answer is yes. Even if you think your home is perfect, you may have to do some minor repairs or upgrades to make your home more attractive to potential purchasers.
- A professional home inspection may be a condition of the offer. If the inspection points to problems, your purchaser may ask that you make the necessary repairs or choose not to close the deal.
- Closing costs, such as lawyers' fees or unpaid taxes, will also have to be paid.
- Mortgage discharge fees may be levied by your lending institution.
- Sales commissions must be paid as defined by your listing agreement.
Buy or Sell First?
That's tricky. After all, if you find a purchaser for your existing home, before you've found a new one, you may find yourself living out of a suitcase if convenient closing dates can not be negotiated. On the other hand, if you find your dream home before you've unloaded your old one, you may be faced with carrying two mortgages for a time. So how do you manage? Easy. Do your homework and have a good idea about the neighbourhood and type of home you're looking for. Do an honest evaluation of your family's needs and budget.
Speak to your RE/MAX agent and start your new home search as soon as your existing home hits the market.
If you've found a home, before you've sold your existing one, use "sale of your existing home" as a condition on your offer. If you don't sell your house within a fixed period of time, you can choose not to go through with the offer. This, however, is a difficult condition for many vendors to agree upon and you may find that you have to forgo your price negotiating power. Purchasing a home before you sell could be a risky strategy if you're counting on the proceeds from the sale. If you've found a purchaser before you've found your next home, use "purchase of a new home" as a condition when you sign back the agreement. Again, it will only be for a fixed time. Even if you have not found the ideal next house by the time the deal closes, you may still wish to proceed with the offer. As a buyer with a "sold house" you will be in a better position to negotiate price.
Understand Market Conditions
The real estate market is in constant flux, not only as a whole but in particular areas as well. Knowing what is going on in the overall and local real estate markets will help you understand how these conditions can affect the sale of your home. We've designed the following chart to help give you an overview of the three significant market positions. When you meet with your agent, ask about the current state of the market.
1. Buyers' Market: The supply of homes on the market exceeds demand. Characteristics: High inventory of homes. Few buyers compared to availability. Homes usually stay on the market longer. Prices are stable or perhaps dropping. Implications: Buyers spend more time looking for a home, and when they negotiate, they usually have more leverage.
2. Sellers' Market: The number of potential buyers exceeds the supply of homes on the market. Characteristics: There is a smaller inventory of homes with many buyers. Homes sell quickly. Prices usually increase. Implications: Prices may be higher or perhaps climbing. Buying decisions must be made quickly. Conditional offers may be rejected.
3. Balanced Market: The number of homes on the market is roughly equal to the demand. Characteristics: Demand equals supply. Sellers accept reasonable offers. Homes sell within a reasonable time period. Prices generally remain stable. Implications: There is less tension among buyers and sellers. There is a reasonable number of homes to choose from.
Determine Your Asking Price
Before you put your home up for sale, you must set the price. And before you can do that, you must know what the house is worth. That doesn't mean what you paid for it, or how you upgraded it. Determining worth is simply finding out what someone would pay for it.
The steps in determining worth are:
1. Understanding market conditions
2. Getting the details about recent sales in your neighbourhood
RE/MAX agents have access to all of this information. Plus, they can objectively see the big picture and tell you what makes your home unique.
Once you've determined you home's worth, you and your agent will determine the asking price. Most often, the price of a home is set slightly higher than its worth, to give a little "bargaining space." Of course, if it is set too high, it may deter prospective buyers.
If you're in a rush to sell your home, setting the asking price a little lower than what your home is worth will attract a lot of attention. But beware, if the price sounds too good to be true, buyers may be skeptical. They may even offer less than the asking price anticipating problems with the home down the road.
You will have a legal relationship with your agent. When you complete the listing agreement, you are giving your RE/MAX agent the authority to put your house on the market for a specified period. If your house is sold during that time, you will pay the agreed to commission. What's more, if the house sells shortly after the specified period because of your agent's efforts, you are still obligated to pay the commission.
Is Your House in Any Condition to Be Put Under a Microscope?
That's what they say about first impressions. Now, take a look at your house as if you were a buyer. With a critical eye, examine your home from outside and inside. Bring along a pad of paper and take notes! Determine what can be solved by a simple cleaning and what needs professional attention and repair. Your list should also include problems that are immediately evident and underlying problems you know of, like a leaky basement.
Let's start with the exterior of your home. Think of what you would like to see when you're viewing a home, or better still what you wouldn't like to see -- cluttered yard, weeds crowding the garden, loose or dangling exterior features (like a broken door), paint peeling, broken fence, or an oil-stained, damaged driveway.
Get out your ladder and inspect the roof. Are the shingles in good shape, are the gutters in good condition and free of debris? You may wish to trim back any trees or shrubs that are leaning on your roof or drainage system.
Take a good, objective look at the outside. Would what you're facing invite you to explore further or make you ready to leave?
Simply having the lawn mowed or the driveway shoveled in the winter will make a better impression. Also, remove any "cutesy" lawn decorations that may have home viewers rolling their eyes. And trim any overgrown shrubs or hedges. If you have a sizable property, you may also wish to hire a professional to weed and feed your lawn.
Flowers are a very effective way of adding colour and warmth to your home. If you're selling during the spring, plant flowers to make the property colourful and inviting. A bouquet or two in your house also adds a nice touch.