Rick and Tracey Sold Their Home in Under a Week
Smart Sellers Get the Job Done
Need a change for the better? A new and improved lifestyle for you and your family. Right now selling your existing home stands in the way. But, what to do next. What to do first. Good news—I've written some of it down for you. Selling a home follows a predictable script; read the script and you'll know exactly how the story ends.
These are simple, easy to understand answers to the most common questions I'm asked about selling a home.
It's written in a (somewhat) chronological order so you can easily find what you're looking for.
Here We Go!
You: I'm thinking of selling, but not for a few months. What should I be doing now?
Me: Following the market. Have a REALTOR® send you sales in the area for the last 6 months. Pop into a few open houses and see what they look like. When they sell, get the final sale price and make a note.
You: Why should I bother following the market?
Me: To sell your house, you need to price it correctly; it's the most important thing you can do. When you follow the market, you get a feel for your competition. Remember, there are only so many buyers out there, and you are competing with similar homes to yours, in price and location, to find one. When you go to open houses, it gives you a chance to see the property beyond pictures on the internet. Visiting a home up close allows you to judge condition—pictures won't tell you this.
You: I already know what I need to get for my house so I can skip that part. Right?
Me: Sure. You can skip any part of this. I'm telling you what you can do to make sure you get the most money for your home. A well-priced home will sell quickly and for close to asking. An overpriced home will go through several price reductions, and buyers will form a negative impression of the sellers. Eventually, you may have to settle for less.
You: How can I find out what my home is worth?
Me: Sit down with your Realtor (me) and go through a list of similar homes in your area or price range that have recently sold. Realtors call these homes comparables or "comps".
You: So we should be able to come up with an exact number?
Me: No. There is no "blue book" value for homes. Each home is different, and the circumstances surrounding the sale are never the same. Buyers sometimes overpay for something they like, and sellers sometimes sell for less because they are under pressure to do so.
You: Wow. Pricing a home sounds tricky. Is it?
Me: It can be. The tricky part is you're only looking at the pictures and the final sale number of the comps. Pictures don't indicate the overall condition, quality of finishes and workmanship, and other intangibles. Sellers need to use reason and good judgment when pricing their home.
You: How about this, I'll try it at a bit higher of a price for a month and see if I can get a bite. If not I'll lower it.
Me: This is always a bad idea. Keep in mind, a buyer coming to look at your home will have already seen the competition and have a good idea of the going rates. When your listing comes out—and the price seems a little high—the buyers may still come, but they bring a different mindset. They arrive thinking, "well, it's a little on the high side, there must be something special about it". They get angry when it looks the same as everything else they seen and you're priced at 20k more. They think you wasted their time and form a negative opinion of you. Once a buyer has passed on a home, a price reduction usually doesn't bring them back.
You: What's the most important thing to do to get my home ready to sell?
Me: Clean it! (yeah, all of it). You wouldn't put your car on Kijiji without throwing the empty McDonald's bags out of the back seat and wiping the dash. You can't expect to get top dollar for your home if it's a mess.
You: Sounds like a lot of work :(
Me: It is, but it always pays. A sparkling home is the first thing they notice when they walk through the door. When you don't clean thoroughly, you'll leave buyers wondering, "If this is the best they can do when they are trying to sell it, how does it look the rest of the time?" People buy a home because of how it makes them feel; make them feel gross, and you lose.
You: What about the squeak in the floor? No one is going to notice right?
Me: They usually—ok always—do. I show houses every day and they always notice the squeak. And the tiny crack in the drywall above the door. These are easy things to fix with Google and a trip to Lowe's. I always recommend sellers do them.
You: I've heard bathrooms and kitchens sell, should I do a reno?
Me: No. I would never recommend a major reno of any kind, they're too expensive, you won't get your money back. Just clean the darn thing up and repair the rough spots.
You: Tell me how commissions work.
Me: First off, there are no set commission rates in Saskatchewan, Realtors are free to charge whatever they like, which comes as a surprise to many. Commissions are calculated in either a lump sum or a percentage of the final sale price. There is GST and PST calculated on the total amount of commission payable, because, of course.
You: Wow, no set commissions! So what's the going rate?
Me: Most Realtors (unscientifically) work at 4% of the total purchase price. This is purely an observation on my part. The commission is then split and you offer a portion to the buyer's brokerage.
You: Buyer's brokerage?
Me: Most home sales involve co-operating Realtors—one acting for the buyer and one acting on behalf of the seller. Part of your commission goes to the Realtor that brings the buyer (writes an offer).
You: I need to pay another Realtor?
Me: You do (usually), but it comes from a portion of your total commission. When you hire a Realtor to market your home, you also hire every Realtor in town (around 600!). We're all working with buyers and trying to make a living. Offering a portion of your commission is like saying, "hey, come over here and sell my house. If you do, I'll pay you some money".
You: What if the listing Realtor finds the buyer?
Me: They get both halves of the commission. Earning both halves of a commission is often called double ending by Realtors.
You: Double ending sounds like the way to go.
Me: It can be great but can also present problems. When a Realtor acts for both the buyer and seller in the same transaction, it can create a conflict of interest since the Realtor has "inside" info on both parties. To maintain impartiality, Realtor's follow a set of guidelines, including (among others) not discussing money or motivation of one party with the other. So, if I'm acting for the buyer and bring you an offer, I can't give you any advice on what price to counter at or any info about the buyers. You hired me to give you advice and I gotta zip it!
You: How do listing contracts work?
Me: Listing contracts are agreements between a seller and a real estate brokerage with the individual Realtor acting as a representative on behalf of the brokerage. The agreement needs to be a minimum of 60 days, most are written for 90-120 days.
You: What if I decide to take it off the market or change Realtors before it expires?
Me: Good news, we can cancel the listing agreement anytime. It's not mandatory for Realtors to do this but I certainly will. If things aren't going as you planned and we have to break up we will. No hard feelings.
You: Well that's a relief...
Me: Hey look, I understand priorities change and life throws some tough pitches. It's the least I can do.
You: It's all cleaned up and fixed up. What now?
Me: Picture day! This one's super important and totally on me. Your pictures need to be a 10/10 or buyers aren't going to want to look at your home. I can't sell your home if I can't get people in your home.
You: So you'll take the pictures?
Me: Heck no! Realtors aren't photographers and shouldn't attempt to take pictures themselves to save a few bucks. I hire a professional to take all listing photos. I want to get your home sold as much as you do and we need to look good. This is our storefront, our first impression. Here is a link to a current listing I have. You'll also get a webpage you can use to share on your social media.
You: Are the listing pictures expensive?
Me: I pay for them as part of your commission.
You: It's cleaned up, pictures are done, the listing agreement is complete and the signs on the lawn. What now?
Me: I put a lockbox on the front door with a key in it and showings begin. Realtors and the public will now see your home on the internet and a well priced, well prepared home can expect showings immediately.
You: How do showings work?
Me: When a buyer wants to see your home they'll contact me directly and we'll set up a time. If they already have a Realtor they'll let her know they are interested and she will phone me and request a showing. I call or text you to confirm. You will usually get a few hours notice of a showing request.
You: No good, I'm going to need a couple of days notice.
Me: That puts you at a disadvantage. I know it's a pain, but most buyers want to see a home the same day. If we have to tell them they can't come today they assume you aren't very motivated to sell. You just created a negative impression of yourself in the buyer's mind, and your home slid down their list.
You: Bummer. I guess I have to play the game.
Me: You do, you're trying to find a buyer after all. Making your home easy to show will get people through your home. Again, you can't sell your home if you can't get people in your home. It also means you need to clean your home before you leave for work each day.
You: Clean it every day? Noooo!
Me: Sorry. You don't have to but you should. You never know when the right person will walk through the door—knock their socks off and encourage an offer.
You: How many showings will I get?
Me: Well priced, well prepared homes can expect 3 or 4 showings a week. Right now condos are more difficult to sell because there is an over-supply. Well priced condos can expect 1, maybe 2 showings per week. New listings get more showings; over-priced listings with poor pictures and messy bedrooms might not get any showings for the first few weeks.
You: So I should try to sell it early on?
Me: Yes, for several reasons. Your best chance to get the most money is in the first few weeks. People that come early are ones who have been in the market, seen the competition, are fully qualified financially and ready to cut a cheque. When they see a new listing, they view it right away. Most serious buyers look every day, hoping to find a new listing in their area and price range. You're looking for a serious buyer, not a person just thinking about moving. Serious buyers come along early in the listing. Turn them off, and you're chances of a quick sale at a price you can live with go down. You also want to sell it early because selling is a stressful time. Having the sale of your home hanging over your head for months will cause the lines in your face to show.
You: So, let's say I do all the things you've mentioned. How long until I can expect an offer?
Me: Average time on market is around 35 days right now but it all depends on the home being sold, the asking price, and timing.
Me: Yes. A lot of people don't like to hear this, but there is an element of timing and good luck involved. All the things I've told you so far are ways to improve your chances, but the right person still needs to walk through the door. I've seen homes sell on the first day because the right person showed up, and they loved it. I've also seen people get an offer on the first day and refuse it thinking it's easy and a better offer is right around the corner. Sometimes it doesn't come, and three months later they reduce the price and sell for less.
You: Someone has made an offer, what's next?
Me: First of all, fantastic! You worked hard for this. Now that you have an offer you have a few choices. You can accept it as written, send them a counter offer to change one or more things in the offer, or let the time frame for acceptance lapse and it's considered a dead offer.
You: Wait, there's a time frame?
Me: Yes, buyers will give you 12-24 hours to respond to their offer. Let it tick past and the offer is dead.
You: That kind of puts the pressure on me to make a decision...
Me: Yes and no. As a seller, you already know what you will or won't accept for your home, so it usually doesn't take long to review the offer and make your move.
You: What do people usually do?
Me: The most common response is a counter offer. Buyers won't usually commit to their best price right of the top unless there is other interest in the home, or they absolutely have to have it. Your counter offer can be written to change any terms or conditions in the offer.
You: Terms and conditions?
Me: All offers contain terms and usually conditions (but don't have to). Terms are what the buyer and seller are agreeing on, namely price, possession date and what's included. Conditions are events, usually inspections and final approval of financing, that have to take place before the terms come into effect.
You: Ok, we've agreed on terms, now what happens?
Me: Your home is now considered conditionally sold, and the buyer goes about removing the conditions they put in the offer. Condition removal takes 7-10 days. If the buyer satisfies all of the conditions, they send you a document indicating conditions removed, and your home is sold. If they can't remove conditions, your home goes back on the market.
You: Can't remove conditions? Back on the market?
Me: It's called a fall-through and it happens from time to time. If the seller is not satisfied with the results of the home inspection or the bank says no to the financing they can choose not to proceed with the purchase and they get their deposit back in full and your home goes back up for sale. You don't get any compensation.
You: What a rip! Does this happen often?
Me: No, but it does happen. Financing can fall through if the buyer wasn't honest with the lender and was hiding some debt. Inspections can fall through on serious issues that were unknown to the buyer at the time of the offer, such as structural issues or other seemingly trivial things.
You: Seemingly trivial things?
Me: Some buyers—especially first-time buyers—don't understand that there are condition issues with every home. They expect it to be perfect, and when it's not, they choose not to buy the home.
You: Well, if the buyer backs out on inspections, I'm going to need to see that inspection report. I think it's a great home!
Me: It doesn't matter what you think (bummer). The inspection was done by the buyer and to the buyer's satisfaction. The inspection is also the buyer's property, so they don't have to show it to you. The best thing for you to do right now is to be upset for a day and then get over it and get your home back on the market. There is a buyer for every home so let's move on.
You: You're worrying me with all this Curtis...
Me: Don't worry! You've got a great home and somebody will love it!
You: Aww, thanks.
Me: No problem.
You: If all goes well and they remove conditions what happens?
Me: You start packing, it's done. You also need to choose a lawyer (I can help with that), call the utility companies and have them discontinue billing as of possession date and cancel your insurance.
You: Seems easy enough...
Me: As I said at the start, selling a home follows a predictable script.
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