Home Selling Guide
Steps When Selling Your House
1. Get your house ready for sale
You need to look at your house through the eyes of prospective buyers. The most important things is to get your house spotless and free of clutter. Here are some tips:
- Have windows cleaned inside and out.
- Clean thoroughly your whole house: carpet, kitchen, bathroom, walls, etc. Pay particular attention to kitchen and bathrooms.
- Get rid of the clutter. Now is the time to donate old clothes or items that you don’t use, or to do a garage sale. Decide what you are going to keep, donate, sale, or throw away. Start to clear out things that make your house look cluttered. Pre-pack in boxes items that you don’t need in the next few months, such as books.
- Depersonalize your house: Put away personal items such as family photos and souvenirs. When buyers will look at your house, they need to imagine their own personal items there. You want them to concentrate on the features of your house and not on your personal things which will distract them.
- Clear away the kitchen counters as much as you can, storing away small appliances as much as possible.
- Improve the curb appeal: the first impression is very important. Make sure your lawn is well mowed and watered, trees and shrubs are pruned and overall the whole yard is well maintained. Clean your door and garage door. Polish the door handle.
- For more details, click here: Preparing Your Home for Sale.
2. Choose a good realtor
Selling a house is a complex process, so a professional realtor will help you with the selling process. A realtor is trained to evaluate the price of your house, to handle offers and negotiations, provide expert advice, etc. Another important reason to hire a realtor is to get exposure to the MLS system. Only realtors have access to this system, and that is where buyers go to find houses. To find out more information regarding the reasons of using a realtor, click here: Why Using a Realtor Makes Sense.
3. Get a Free Home Evaluation
Ask your realtor for a market evaluation. Your realtor will conduct a thorough home evaluation and provide you with comparables of houses sold in your neighbourhood. I offer this service at no charge and no obligation to the seller.
4. Decide the listing price
After your realtor provides you with the home evaluation, then he will advise on a price. Then, you can make an informed decision when choosing the listing price. Your realtor will advise on the listing price, considering:
- market value, based on recent sales;
- condition of your home;
- improvements /repair done to your home;
- time frame / motivation to sell.
Market value is defined as the value at which a particular house in the present condition will sell in a time frame of up to 90 days.
You don’t want to list the house for a price too low, but make sure you don’t list for a price too high either. If the price is set too high, this will have the following consequences:
- It will limit the buyers that will come to look at your house because the price will be over their price range.
- It will limit the number of showings, so you will have a less chance of getting a reasonable offer.
- It will result in extended number of days in the market. When a home is in the market for too long, it will be perceived by buyers as not desirable. Buyers will wonder why the house did not sell.
- It could lead to a lower price. Most sellers think that they should ask for a higher price, but be careful as this might turn out to hurt you. If the house didn’t sell for a long time because it was overpriced, then you could end up having to accept a lower offer, as less and less buyers will be willing to consider it. Here your realtor will advise you on the best price. You want to price your house right, not too low, but not too high either. That’s where the Home Evaluation comes into place, to help you see the comparables.
- It will lead to wasted time.
5. Sign the listing documents to list your house in the MLS system
Once you decide the price, your realtor will give you the paperwork that you need to sign. Sign the listing documents which usually cover the time frame of three months for which your house will remain listed. Once the documents are signed, the realtor will take pictures of your house. Then, he will list your house in the MLS system.
6. Stay out of the way during showings
Your realtor will let you know the time when there will be a showing. It is better if you don’t stay home at that time, so that will be easier for buyers to walk around and talk.
7. Assessing the listing price
You will know after the first 2 weeks if the price is right, or is too high, or too less, based on the activity that you have. Your realtor will be able to provide you with weekly reports in regards to showings, on how many people set it up at their favourites, possibilities, etc.
8. Open houses
Your realtor will organize open houses to show your home. This will be done on either Saturday or Sunday, for a two hour time frame. It is better if you are not home during that time. Your realtor will provide you with feedback after the open house ends.
9. Getting an offer
Your realtor will present to you the offers that he receives. You will decide if you are happy with the price and the conditions. If you have a low-ball offer, it’s better to play it anyway by getting your realtor to make a counter-offer. As proven before in many cases, the realtor might still be able to get the buyer to increase the price enough to reach an agreement. If you don’t like the offer, then you can reject it.
There are two kinds of offers: conditional and unconditional. Conditional are the most common ones. That means the buyer makes the offer conditional on certain things. The most common conditions are home inspection and financing (the buyer getting the mortgage approved). Sometimes it could be another condition as well, such as subject to sell. That means that the buyer has to sell his house first before the deal becomes binding.
When you like the offer price and conditions, then you can accept the offer. You will sign the documents that the realtor will give to you. Your realtor will handle all the paperwork and get the required signatures.
10. Wait for conditions to be removed
After the offer is accepted, you have to wait until the conditions are removed. Usually it takes 5-7 business days. The offer becomes legally binding only after the buyer removes all the conditions. At this point the house becomes sold. If the buyer made an unconditional offer, then you don’t have to wait because there are no conditions to be removed and the house becomes sold at that time. So, the house is considered sold when the deal becomes unconditional.
11. Chose a lawyer
After the offer is accepted and conditions were removed, your realtor will send the offer to your lawyer. The lawyer will explain to you in detail where the money goes (equity, commission, taxes, fees).
12. Possession day
On possession day, you will have to hand over the property in the conditions specified in the contract: clean, garbage removed, vacant, etc. You will hand in the house keys to your realtor, so that he will give them to the buyer. Don’t forget to give all the keys, including garage and shed, if applicable.
Costs Associated with Selling Your House
- Legal fees that you pay for your lawyer services.
- Property tax and utility adjustments. Property rates and utilities (hydro, water, gas, etc.) will be pro-rated. The adjustment day is the possession day. Your lawyer will do this calculation and explain it to you.
- Real estate commission that you pay to your realtor. This is divided in half between your realtor and the buyer’s realtor.
- Outstanding mortgage balance and any charges associated with discharging your mortgage early (if you are not transferring it to your new home, or the buyer is not assuming it).
Your real estate agent will advise you on all these costs.