We’ve been through the home buying process, but what about selling? Is it harder to be on that side of the transaction? What do we need to know to protect ourselves?
Which is harder is very subjective, but if you’ve already dipped your toe into the real estate market to purchase a home, you already have some understanding of what is involved in a real estate transaction.
However, selling a house is quite different from buying and can be an emotional experience as you say good-bye to a place you have called home, especially if you have many good memories there. Therefore, there are some things you need to know to ensure that your interests are protected and your emotions don’t impede your decision-making.
First, selling a home relies heavily on marketing and exposure, and this takes some concerted effort.
Buyers have countless avenues to learn about homes for sale, especially in today’s digital age. But as a seller, your home won’t sell if no one knows it’s available. So, how do you market your home? How do you make it stand out from the other one for sale down the street?
This is why it may be prudent to hire a registered real estate professional who has knowledge of your area and can work with you on the best marketing strategy for your home and its unique features.
Make sure you have a thorough conversation with your sales representative about the list price for your property. Ask for recent listings for sales in your area and determine what other similar homes have sold for recently. Be sure that you have all the information you require and that you are comfortable with the strategy, and then document it as a schedule to your listing agreement to avoid misunderstandings down the road. Remember, they may provide advice, but you are responsible for setting the price and the strategy that is best for you.
A second big difference between buying and selling involves the payment of commission. In a typical real estate transaction sellers pay the commission, not just to their own brokerage but also to the brokerage representing the buyer. However, there are other models of how a buyer’s brokerage gets remuneration. Whatever is decided it must be clearly set out in the listing agreement.
A third aspect to consider is that you, the seller, own the home right up until the completion date. Therefore, you are responsible for carrying all expenses, including mortgage payments, insurance, municipal taxes, utilities and maintenance until the transaction is finalized. This holds true even if you vacate the property a week or a month ahead of time.
Generally, the length of the closing period – the time between the Agreement of Purchase and Sale being signed and the new owner taking possession – is negotiable between the seller and the buyer.
There are other aspects of the transaction that are unique to selling a home, including: setting an appropriate listing price, which is a very different task from determining an offer price as a buyer; deciding which fixtures and chattels will be included in the negotiation and sale; itemizing any items on lease or rental and the buyer’s obligations for those contracts; disclosure of material latent defects (regardless of whether a buyer specifically asks about them) and any ongoing liability of the seller after the sale closes; and, any risks associated with the buyer not meeting agreed conditions or not being able to close the sale.
All of these unique aspects of selling a home may make it worthwhile for you to seek advice from a registered real estate professional who can help you navigate the sale, get the best net price for your home and ensure a smooth transaction.Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.