Selling your home will be much easier if you understand the process. Since every home sale is different, it’s seldom a “one size fits all” experience. Every home is unique, and every Seller has different needs and expectations. Understanding how an asking price is determined and what actions you’ll personally need to take to realize a successful sale is imperative.
1. A Thorough Comparative Market Evaluation
Realtors® have access to real-time information along with a plethora of historical data. The Comparative Market Evaluation, aka Comparative Market Analysis (CMA), takes all of this data into consideration and will provide you with an overall market value of your property. But there’s a bit more: neighbourhood nuances. Just like no two houses are the same, no two neighbourhoods are the same either. A complete market evaluation prepared by a competent local real estate professional will give you the full picture. Ultimately you decide what price you’re going to ask- the CMA and Realtor® are there to guide you.
Comparative Market Analysis vs Appraisal
2. Getting the price right
Setting the right price is always critical when it comes to selling your home. Few homeowners want to leave money on the table, and unless they establish the correct value to start with, they’ll never know. In a hot Sellers Market, setting a low price and having a bidding war is a prevalent strategy. Yes, your house might sell overnight with no conditions, but are you ultimately go to get the money your home is truly worth? You might end up experiencing Buyers Remorse; when a purchaser gets cold feet, feels they overpaid or were pressured and starts to back out of the deal. No one wants that.
When you’re selling your home the best way to get the maximum value is to make sure that you price it within 5% of the amount as determined by a CMA. For example, if you have a home where a recent CMA shows the value at $630,000, your asking price should be no less than $599,000 and no more than $660,000. That’s not to say that if you have a bidding war, someone might not pay more than $660,000- if they do, then there are measures you can take to make sure you don’t experience a regretful buyer. Experienced Realtors®, familiar with the local market conditions, will know the questions to ask Buyer’s representatives. They might feel additional documentation from the Buyer is necessary before you decide to accept the offer. (i.e. mortgage commitment, bank draft for the deposit at the time of an offer.
Sellers might want to forego the excitement of a full-fledged bidding war and depending on the circumstances, it can be a tad bit overwhelming. A Seller might find the saner practice of pricing within 1% or 2% of your CMA value more appealing. In the case of the $630,000 CMA value, that would be a list price of anywhere between $618,000 and $642,000. If you list your home for a reasonable price, using the CMA as a guide, you stand a much better chance of attracting reliable buyers. The best buyers are those who are not only expecting to buy a home in that price range but are qualified financially to buy in that price range as well.
44% of American Homebuyers suffer from Buyers Remorse
3. Timing your sale
They say that timing is everything, and that’s certainly the case when it comes to selling your home. If you’re experiencing a Buyer’s Market, do you need to sell your house before you consider purchasing another? Or, if you’re selling your home in a hot Seller’s market, would you feel less stressed if you knew you had a house to move into before you sold your current home?
There are a lot more timing issues you’ll need to address.
- What’s the best day for you to have the house on the market?
- Will you have enough time to get the house decluttered, cleaned and staged?
- How much notice are you going to need for showings?
- Does your schedule allow for Open Houses?
- Are you going to hold back offers until a specific date?
- If an offer comes in, what time of the day is best to review it?
- How often do you want to hear from your agent?
- Is there a best time during the day to touch base with your Realtor®?
- When do you want to make your move?
4. Listing and showing your home
Once you know your timeline, then it’s full steam ahead! Pick a Realtor® you trust and, more importantly, with whom you feel comfortable. With a realistic price and a thorough understanding of your timeline and expectations, your Realtor® will be able to get to work to make your move a reality.
Try to resist the urge of being “home” for showings, so be well prepared to be away from your home for prolonged periods.
Before listing your home, decide how long it will take you to get your home organized for a showing and exactly where you’re going to go during this time. Will you have to make arrangements for pets? Do you have friends and family that you can visit with the kids, or will you be driving around with them for hours on end? Make sure you have a workable plan and inform your Realtor® on how much notice you’ll need before a showing so you can execute your plan! With a bit of planning, you can make selling your home a lot less stressful for everyone!
5. Accepting an offer
A prolonged Seller’s market can sometimes leave sellers feeling surprised and frustrated when their home doesn’t sell as quickly as they were expecting. Key questions to ask yourself and your Realtor® when this happens
- Are we priced correctly?
- Does all of our advertising correctly reflect the house, i.e.) are the pictures a true reflection of what we’re selling? Does our MLS Listing accurately portray our house?
- Is the listing being distributed to the local real estate community? i.e.) a listing with a Realtor® from a neighbouring real estate association may not have been submitted to your local association for distribution to their members.
- How long is it taking for other homes in the neighbourhood to sell? i.e.) if it’s taking 30 days on average to trade in your area, not receiving an offer within the first week might not be that concerning. If everything is selling within a week and you’ve been on the market for a month, it might be time to review the price and, or your marketing strategy.
When you’re selling your home in a “Balanced” or “Buyers” market, the process may seem to drag on longer than you expect. Once again, it’s all about your specific timing and financial requirements. Do you need the house sold by a particular date? If so, you may want to price your home to show significant value. Do you need to net out a certain amount of money from your sale? If that’s the case, then you might want to complete a few repairs or inexpensive updates. Your Realtor® will be able to supply you with current market statistics and feedback from recent showings. After reviewing everything, you can decide what your best course of action would be.
How do you get the Buyers’ offer?
When someone wants to submit an offer on your property, their representative will contact your Realtor® to inform them they have a bona fide offer. The Buyers rep does not usually disclose details of the offer, merely the fact that it’s signed. The Buyers rep may email or fax the offer to your Realtor®, or they may request an opportunity to be there in person if at all possible. The Seller and their agent determine the method of presenting an offer. There’s no right way or wrong way, as long as the Buyers offer gets delivered to the Seller for consideration.
How long do you get to review the offer?
When a buyer submits an offer, it will always contain an “irrevocable date.” That’s the time and date their offer is valid until. A Seller can deal with the offer before that time by way of accepting it, rejecting it or countering it. Your Realtor® will advise you on what your next steps should be.
With conditional offers, sometimes the Seller needs to do certain things to assist the Buyer in fulfilling their conditions. Make sure you know what you’re responsible for:
- is there anything that you need to do to help the Buyer, i.e.) do you need to make sure the attic hatch is accessible for the home inspection?
- Are there any documents you need to produce to assist the Buyer, i.e.) Building permits, zoning verifications?
- Will there be any financial obligations? i.e.) will you have to pay to obtain the condo status certificate?
When will you have to move?
The closing date, which is that you give the buyers possession of your home, needs careful considerations. Once established, this date might be challenging to alter if not downright impossible.
In most standard offers, the Seller agrees to provide the Buyer with “vacant” possession of the property no later than 6 pm on the date set for closing. If you have any concerns about the closing date, make sure you deal with it before you accept an offer.
When it comes to selling your home, excellent communication between you and your Realtor® will go a long way in making your selling experience a breeze!