Real Estate Talk:
The selling process
The ins and outs of selling your property
By Joseph Marovitch
Updated February 15, 2023
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: You 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 second 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 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 purchasing because they think they will not find a place. Buyers will always find a place. It takes time to sell a property, no matter what anyone says.
‘Selling a property requires preparation and consideration of the pros and cons of the property being sold.’
If a buyer purchases before selling the current property, the buyer may fall under the pressure of having to sell their first property for less as the signing date approaches for the new property. Few people want to carry the cost of two homes.
Selling a property requires preparation and consideration of the pros and cons of the property being sold.
Accounting for the following will assist in determining the asking price, such as location, condition, number of bedrooms, number of bathrooms, parking, square footage and more. All these factors, except location, cannot be changed unless the seller renovates.
If the home has issues, the seller can either repair the issues or price the property to allow for the issues to be repaired by the buyer. If the seller decides to price the property accounting for issues that devalue the home, all the issues must be declared in the Seller’s Declaration. We will discuss the Seller’s Declaration in the next issue.
There are two types of issues to consider:
Structural issues that are apparent and require immediate repair, and cosmetic issues that do not require immediate repair.
If the bathroom and kitchen are dated and require an upgrade let the buyer do this. These are cosmetic issues, and some buyers are excited about renovating to suit their particular tastes.
If the front balcony is in an unsafe condition and therefore requires repair, the seller should either repair the balcony or price the property lower to account for the damaged balcony and declare the issue in the seller’s declaration.
Generally, if the seller wants to acquire the best price possible and the repairs will upgrade the value, the seller should perform the repairs. 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 lower price.
Issues such as broken window panes, small non-structural cracks in the side of the house and other normal wear and tear will not stop a buyer from falling in love with the property.
‘An overpriced property is used to sell other homes. 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.’
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 comparable active listing for the seller to see. It is very important to know the competition.
A property that is priced for the market will sell in an average of 3 to 6 months or less. An overpriced property is used to sell other homes. 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:
- Professional photos are taken – great pictures do tell a thousand 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 buyers and brokers.
- The property is placed on the Centris system with verified measurements and descriptions.
- The property is entered on multiple websites, including the Centris system, the broker’s company websites (national and international), and the broker’s personal website if they have one, and some local online community media, such as WestmountMag.ca.
- The broker will email in a newsletter 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.
- Ads are placed on-line including Linkedln, Facebook, Instagram and Pinterest. These provide excellent targeted exposure.
- Virtual tours will be available to invite the public in to see the property.
- Visits will be arranged.
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 by an offer. Once an offer is received, the broker will review the conditions and deadlines and discuss with the seller 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 via negotiation and will know a valid issue from an invalid one from a buyer who is simply attempting to get a lower price.
Once the inspection and financing conditions are satisfied, the balance of hurdles lies with the notary who checks title and servitudes. Following this, signing takes place, the property is registered with the new owner and, a day later, the money is in the seller’s account and the property is fully sold.
Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, click here.
Next article: The seller’s declaration
State of the market
CPI today (inflation rate) 6.32%
Bank of Canada interest rate 4.5%
Higher interest rates are starting to achieve their purpose of pushing the inflation rate down. From 8.1% two months ago, the inflation rate is now 6.32%. The Fed is now aiming for 3% instead of 2.5% in the next two years. What we all must wonder is if the Federal Bank will reduce the interest rate enough with the consumer price index. Higher interest rates would favour the government and banks. Current interest rates and inflation have reduced both residential inventory and buyers.
‘… if a buyer has cash to buy and some sellers must sell now, it is a buyer’s market.’
Sellers are waiting for rates to drop and real estate values to rise. Buyers are waiting for interest rates and inflation to drop so carrying costs and monthly mortgage payments will be lower. Again, if a buyer has cash to buy and some sellers must sell now, it is a buyer’s market.
Have a great week.
Let’s not forget that people with cancer are vulnerable too!
You are invited to keep giving to the following organizations since it’s now more important than ever to support cancer research! Click on the logos below to find out how:
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 for, 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