11 Things You Should Know Before Selling Your Home
UPDATED: January 10, 2018
Whether you’re getting ready to retire, you need to downsize, or you’re simply dealing with an empty nest, selling your home can be an emotionally fraught time. Big changes are on the horizon, but, at the same time, you’re preparing to leave a place where you’ve spent a good portion of your life.
That’s why it’s so important to have someone you trust on board. It’s good to have someone who can walk you through the process because there’s a lot of preparation that goes into selling your home before that For Sale sign goes up in your front yard.
Here’s a quick run-down of what’s involved when you sell your home of many years. After you read this, you should have a pretty good idea of what’s in store when you finally decide to take the plunge yourself.
1. Get Early Advice
The minute you’ve resolved to sell and move, get your realtor involved right away so that he or she can help you. Realtors are full of helpful knowledge that will assist you in the sale of your home.
2. Reconsider those Expensive Renovations
Don’t make the mistake of spending a lot of money on renovations or decor before talking to a realtor. Many homeowners fall into the trap of paying for expensive home renovations because they think it will increase their likelihood of selling fast or getting a higher price. That doesn’t always pan out, so talk to your realtor first.
3. Tidy Up and Get Rid of Stuff
In reality, it’s often the small things you do to spruce up your place that have the most impact. Just giving everything a good cleaning is a great start. De-cluttering is probably the single-most important thing, actually! Take everything you can out of a room, and then go a step further and remove one more piece. The idea is to make the space look as large as possible.
Take personal pictures off the wall too. Remember: you want potential buyers to imagine themselves in this home. If there are pictures of your family all over the walls, it’s hard for them to do that.
4. Study Your “Working with a Realtor” Brochure
Once you start a relationship with a realtor, you’ll receive a handy document called “Working with a Realtor.” Go over it in detail with your realtor.
This is not an exciting step, but it’s an important one because it explains the agency relationship you have with your realtor. It also explains how this relationship may change during the course of your business together.
In addition, it explains the need for the collection, use, and disclosure of personal information that your realtor may require in the course of representing you and selling your property. It can be a little complicated, so don’t be afraid to ask questions.
5. Get to Know the “Multiple Listing Contract”
The “Multiple Listing Contract” is the actual contract that you will sign that puts your home on the market. Your realtor will go over the contract paragraph by paragraph and explain what each means. Again, if you have questions, feel free to ask.
One of the more important items on the Multiple Listing Contract is the asking price for your home. Your realtor will help you with this by preparing what is called a CMA (Comparative Market Analysis). This is a comparative analysis of your property in relation to other similar properties in the area that have sold recently as well as properties that are still on the market.
We also look at properties that have not sold and the prices that were being asked for them. Based on these factors, we will suggest a “listing price” that we feel is appropriate for your property. However, the ultimate decision regarding what you feel the asking price should be is still yours. It’s important to get the price right, as you don’t want your property to become stale or have people disregard it because it’s too expensive.
6. Make Sure You Understand the “Property Disclosure Statement”
Another important document is the “Property Disclosure Statement.” This is a very important document and one which we will ask you to fill out. We can assist you in terms of helping you to understand the questions, but we do need you to fill it out completely. It includes questions such as “Are you aware of any problems with the water system?” The purpose of this document is to advise potential buyers of any problems that the home may have.
7. Prepare Your Home
One of the biggest questions sellers often have is “How am I ever going to get this place ready for sale by myself?” That’s where your realtor comes in. They can assist you in finding people who can help you.
We have worked with handymen, plumbers, cleaners, etc. We will not give you specific recommendations, as this could be viewed as a conflict of interest. However, we will give you a list of people who can potentially help you, and you can speak to them and choose the one you feel best suits your needs.
8. Plan What to Do While the Property is Being Shown
Showing the property can be stressful because you are expected to keep your home ready and available for showing at any time. Many times realtors will advise potential buyers that the seller (you) will need at least 24 hours notice to show your home. This at least allows you to live in your home and gives you a chance to “tidy up” when it is going to be shown.
Most realtors suggest you try and not be home when the property is shown. It causes you stress because potential buyers sometimes can be critical of some of your decorating or furnishing choices.
It’s best if you can be away for the time during which the property is shown. This usually doesn’t take any longer than 30 minutes. It’s also better for the potential buyers because they feel more comfortable poking around your home if you’re not there. Don’t worry, the realtor is there to protect your property.
9. Be Prepared for the Offers!
What do you do when an offer finally comes in? Your realtor will call you and advise you that an offer has come in. Normally, this will be either faxed or emailed to your realtor.
On some occasions, the other realtor will ask that they be allowed to present the offer in person. Your realtor will speak to you to see how you feel about this, and then you can proceed with whichever method you feel more comfortable with.
If the realtor is presenting the offer, just listen and ask only questions that you need to ask to clarify the offer. Remember, you do not want to “tip your hand” when it comes to negotiating for a fair price and conditions. This is the time for your best poker face.
After you are alone with your realtor, they will explain the offer to you. Remember, an offer is more than just the dollar amount they are offering. There will be subjects that are attached to the offer that form a substantive part of the offer, and you have to review them carefully.
An important point to remember is that when you counter an offer, the original offer is no longer on the table. In other words, if you counter offer and they refuse your counter, you can’t go back and say you will accept the original offer. It’s no longer there!
10. Learn How Commissions Work
The realtor’s commission is paid by the seller. This amount is negotiated between you and your realtor. The commission not only goes to your realtor but is shared with the realtor who brings the buyer to your home.
The commission split is not usually 50/50, because the selling realtor carries all of the expenses for advertising. They usually get a bit more to cover these expenses. You are responsible for your own lawyer or notary public charges, which will include costs for the clearing title and GST.
11. Be Prepared for Immediate Taxes
One cost that seems to catch many sellers by surprise is the cost for their share of the property tax. Basically, this is your share of the property tax that has not been paid by the date the home is sold.
Municipal taxes are usually paid on July 1, so if you sell your home prior to that date, you will owe the new owner the portion of the taxes that accrued while you lived in the home.
For example, say the home was sold on April 6. You will have lived in the home for 96 days of the given year, so you will owe taxes for 96/365 days of the total year’s taxes. On the other hand, if you sell after the taxes have been paid, then you get a credit on your statement because you paid taxes for the whole year but did not live in the home during that time.
Well, that’s the home-selling process in a (very large) nutshell. I hope this helps make the process a little more transparent. Even after reading this, you may still have questions. I’m always available to answer questions, so please feel free to call me at any time.