Real Estate Talk:
The Selling Process
The ins and outs of selling your property
By Joseph Marovitch
Updated December 13, 2018
Sometime back we discussed the purchase process, so now it’s time to cover the details of the selling process. Real estate can be viewed as a model for the circle of life. Stage 1: You have come of age and have decided to leave the nest. Off you go to find your first property, usually a condo. Stage 2: Time to get married and a child is on the way, so you move from a condo to a 2 or 3 bedroom home. Stage 3: That 2nd child is on the way and it is time for a bigger home. Stage 4: The kids decide it is time to leave the nest and you are left in this this big empty house. Time to downsize to a smaller house or a condo again. Such is life. Here is a rule I suggest you keep in your real estate manual:
Do not purchase a house before you sell your last house
Many people are hesitant to sell before they buy because they think they will not find a place. Don’t worry, you will always find a place. It takes time to sell a property no matter what anyone says. If by chance you sell in one day, it is because you sold very high and therefore have more options in your upcoming purchase. Or you sold very low, which we will discuss another time. Another issue is that, if you buy before you sell, you will always fall under the pressure of having to sell for less and less as the signing date approaches. Few people want to carry the cost of two homes simultaneously.
Selling a property requires preparation and consideration of the pros and cons of the property you are selling. Take into account the following elements in determining the asking price: location, condition, number of bedrooms, bathrooms, parking, square footage, and so on. All these factors (except one) cannot be changed unless you renovate; however, condition is under your control. If your home has issues, you can either repair them or price the property lower to allow for the issues to be repaired by the buyer. There are two types of issues to consider: issues which are apparent and issues which are not. If your bathroom and kitchen are dated and require an upgrade, let the buyer do this. Some buyers are excited about renovating to suit their particular taste.
If the front balcony is in terrible shape and requires repair, repair it. If the walls in the house are scratched and full of holes, repair and paint them. If the garage door has a large dent – fix it. The general appearance of the property should always look as good as possible. If the house appears to be in poor condition, buyers will anticipate further problems and either back away or offer a low price.
Selling a property requires preparation and consideration of the pros and cons of the property you are selling.
For issues such as broken window panes, small non-structural cracks in the side of the house and other normal wear and tear, these will not stop a buyer from falling in love with the property.
Now that you have considered all the issues in the property and addressed them, it is time to contact a broker. The broker will properly price and market the property. When the broker suggests a price to sell the property, the broker must back the price with facts such as providing comparable listings that have sold in the last 6 to 12 months and provide comparable active listing for you to see. It is very important to know what the competition is.
A property that is priced for the market will sell in an average of 3 to 6 months or less.
A property that is overpriced is used to sell other homes by brokers. A broker will show an overpriced house to their client first and then show a similar house that is properly priced and sell that house.
It is important to realize that the first offer in many cases is the best offer. Do not pass on a good offer just because it is the first offer. You may wait a long time after the first offer only to find the next offer is lower.
Brokers provide maximum exposure via their network of brokers, buyers and the Centris system (used to be called the multiple listing service – MLS). The more exposure a property has, the more the property will sell for. Ample and quality exposure creates more calls, visits and offers.
The following are the steps to sell a property once the price is determined:
- Pictures are taken – great pictures do tell a 1000 words and help find the buyer.
- Measurements are taken – measurement of each room must be accurate or the sale can be cancelled.
- A for sale sign is placed in front of the house – this attracts buyer and brokers.
- Property is placed on the Centris system with verified measurement and descriptions.
- Property is entered on multiple websites including the Centris system, the broker’s company websites (national and international), or the broker’s personal website if there is one, and some local online community media, such as WestmountMag.ca.
- The broker will email their client and broker base one or more times per month.
- Flyers will be distributed to the local area.
- Ads are placed in the local papers two or more times per month.
- Open houses will take place to invite the public in to see the property.
Once per month, the broker will provide a report indicating how many calls, visits and offers have taken place. The report will include how many ads were placed and where.
‘Know that the most difficult part of selling a property is not the marketing but rather getting from accepted offer to signing.’
The broker should qualify buyers if possible by asking for a letter of pre-approval or proof of cash to be accompanied with an offer. Once an offer is received, the broker will review the conditions and deadlines and discuss with you whether to accept, refuse or counter the offer.
Offers usually come with two or more conditions and sometimes with no conditions. The most common conditions are inspection and financing. Know that the most difficult part of selling a property is not the marketing but rather getting from accepted offer to signing. A good broker will handle an inspection, with issues, by negotiation and the broker will know a valid issue from a buyer who is simply attempting to get a lower price.
Once the inspection and financing conditions are satisfied, the balance of hurdles lie with the notary who checks title and servitudes. After that, signing takes place, the property is registered with the new owner and a day later the money is in your account and the property is fully sold.
Next article: An in-depth look at home staging
Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, go to the search link and type in Joseph Marovitch.
Have a great week!
State of the market
The Association des professionnels de la construction et de l’habitation du Québec expects a 12% increase in new construction for 2019. New construction during 2016 and 2017 rose 38%. The forecast for 2019 is significantly less. As I mentioned in past articles, Montreal is running out of space to build upwards or outwards. This situation is creating a larger and larger resellers market thus causing prices to rise.
Many home owners do not want to sell their property for fear it will cost much more to purchase another property. The effect is that there are far less properties on the market to sell. What is left is selling quickly and with multiple offers. If you are one of the few searching to buy a larger home, you will end up paying more than you expected. The good side of this is that the property you will sell, in order to purchase your new home, will also sell much higher than you expected as well.
I would suggest that what ever you buy now, hold onto to it for the long term. Prices will rise. It would also be a good idea to purchase investment property and as much as possible, at fair market value based on location, condition and the rate of return or capitalization rate. You cannot grow more land, and it can be saturated if the land is an island.
Image: Andrew Burlone
Joseph Marovitch has worked in the service industry for over 30 years. His first career was working with families from Westmount and surrounding areas, hosting children between the ages of 6 to 16 as the owner and director of Camp Maromac, a sports and arts sleep away summer camp established in 1968. Using the same strengths caring for the families, such as reliability, integrity, honesty and a deep sense of protecting the interests of those he is responsible to, Joseph applies this to his present real estate broker career. Should you have questions please feel free to contact Joseph Marovitch at 514 825-8771, or firstname.lastname@example.org