Information for Sellers
1. Select an Agent
When selling your house you have two choices. You can choose to do it yourself or you can use the services of a professional real estate agent. Most people choose a Real Estate Agent because they do not have the time or knowledge to do it themselves. The Agent will manage the whole process on your behalf and, in your best interest. The Agent will start by walking through your house with you to offer tips and suggestions on how to make it sell faster and for more money.
2. Market Evaluation
Once the walk through has been done, the Agent will then complete a comprehensive Market Evaluation. In other words, let’s set the price.
The Agent determines the value of your house by looking at current listings in your neighbourhood, recent sales in your neighbourhood, and expired listings in your neighbourhood.
The Realtor looks at the current listings for houses in your neighbourhood that are similar to yours, to see what the "competition" has to offer. You want to make sure you don’t under price your house, or conversely, you don’t want to price yourself out of the Market!
The Real Estate Agent looks at recent sales in your neighbourhood to see what houses are actually selling for. Sometimes the selling price is very different from the asking price. The Seller may set the asking price but, ultimately, it’s the Buyer who sets the sale price.
The Agent then looks at the expired listings or the houses that were for sale in your neighbourhood but did not sell. This usually tells the Agent, which houses were over priced. The exception to this might be a house with a unique layout or a house in poor condition etc.
The Market Evaluation is always in writing and will give a recommended Asking Price and a recommended Selling Price.
The Asking Price is usually given in a range, say between $84,900 and $87,900. The reason for this is simple. If you are in a hurry to sell, you would set your asking price at the low end of the range. If you are just "testing" the Market you would go with the upper end of the range. Most people choose somewhere in the middle.
The Selling Price is also given in a range. The reason for this is because, while the Real Estate Agent cannot predict, to the dollar what a Buyer will pay, a good Agent can usually determine within a range of 3-5%, say between $80,000 and $84,000, depending on where you set your asking price.
Pricing your house correctly is the single most important thing you can do to get your house sold quickly and for the most money!
3. The Listing
There are two ways you can list your house.
The first is called an Exclusive Listing. If you choose this way, the commission you would pay your agent is usually 5% of the selling price of the house (plus HST) and your listing information gets circulated only within the office of the agent with whom you listed your house.
If you choose the second way called, Multiple Listing Service, or MLS for short, the information is made available to all real estate agents who are members of the Newfoundland and Labrador Association of Realtors (NLAR). Most Sellers choose this route because it exposes their house to more potential Buyers, therefore, increasing the chances of obtaining a higher selling price. The commission charged for this enhanced service is usually 6% of the selling price (plus HST).
The Listing Form, for your house is actually two pieces of paper. The first part is the contract between you (the seller) and the Agent you choose to sell your house for you. It contains vital information such as the asking price, the term of the listing and the expiry date of the contract. The minimum listing time for an MLS listing is 60 days.
The second piece of paper is the "Data Sheet". It is a form where the Agent fills in all of the pertinent information about your house so it can be entered in to the MLS Computer at the real estate board office where it then becomes available for all real estate agents to access.
Once the house is actually "listed" what happens next? What does the Agent do to promote the sale of your house? Many things actually – the first being, submit your listing to the MLS System so as the information on your house is available to all Agents. The Real Estate Board also puts most of this information on the MLS website so that it is available to the public as well. More and more home buyers these days start the home buying process on the internet.
The Agent may then employ many different methods of promotion from advertising in the local newspapers to placing an ad on the local real estate channel on TV. You should always have a sign on your lawn as well. For special or "unique" properties some Agents will hold an Agents Open House. This is usually held during the week and is for Real Estate Agents only. The idea here is that it is easier for an Agent to sell a house that he or she has already seen. The other type of Open House is for the general public and is usually held on a Sunday afternoon. This is where the house is open to the public and is hosted by the listing agent. The down side of this is that it throws your house open to all comers, whether they are pre-approved or not. One of the commitments that I make to my sellers is that I will not bring a buyer in their house unless the buyer has their mortgage pre-approved first. That just makes sense!
5. The Showing
Now that your house is "on the market", what is the next step? Well, when another Agent has a potential Buyer for a house like yours, that Agent will call your Agent to arrange a convenient time to bring the Buyer over.
For all showings, the Seller should be out of the house when-ever possible. The idea is to make the Buyers feel comfortable as they walk through your house.
Here are some tips on showings:
- Always make sure the house is cleaned up and sparkling. Everything in it’s place. No loud noises, such as TV or Stereos, soft background music only.
- Make sure pets are out of the house or in the kennel. Make sure the kitty litter is gone.
- In the winter time, make sure the driveway and steps are clear of snow and ice.
- Your Agent will offer many more tips and suggestions on making your house more showable. Most of it will be common sense stuff but there is always something you didn’t think of.
6. An Offer
Whenever another Agent gets an offer on your house he or she will bring it to your agent and they will go over it together. Your agent will then call you to arrange a time to come buy and review it with you. Your Agent will go through the offer with you and recommend a course of action.
Basically you have three choices – accept the offer, reject the offer or make a counter-offer. Essentially a counter-offer is a response to the Buyer that you are willing to accept some of the conditions or price in their offer but not all of them. Offers and counter-offers are always in writing. The offer should always be accompanied by a deposit, which shows that the buyer is serious and makes it legal.
Once all of the conditions of the offer have been met, such as an appraisal, house inspection or financing, the Listing Agent then sends the paperwork out to both the Buyers and the Sellers Lawyer. Now the ball is in their court. You should call your lawyer and make arrangements to meet with him or her to sign all necessary papers.
As the seller, you should now be making your moving arrangements. I usually tell my clients to try to arrange to move out of the property a day or two before the scheduled closing date, so as to give yourself time to go back and make sure the house is thoroughly cleaned and all garbage and/or debris has been removed from the property.
8. Final Inspection
The buyers get to walk through the property one last time, usually early in the morning on the closing day, just to make sure everything is, as it was, when they viewed the property the day they made their offer. If everything is ok the buyer will immediately call their lawyer asking them to send the money over to your lawyer. As soon as your lawyer receives the money, he or she will immediately send the keys over to the buyers lawyer and the deal is done.
Congratulations, you’ve SOLD your house!