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When TO Sell your Home

There are a million different reasons why people sell their homes, but every seller has one thing in common: the desire to get as much money as possible from their existing residence as quickly and as hassle-free as possible. (If your home is your principal residence, you won't have to pay capital gains tax on any profits from the sale. If, on the other hand, it is an investment property, prepare for the tax man!)

Before you begin the selling process, really evaluate why you're moving. Do you have too few rooms, or too many? Has your job moved to another city and you're relocating? Are the neighbours driving you away? Or are you simply looking for a change? A complete analysis of your current position will set a good foundation for your next home hunt.

When is the Best Time to Sell Your Home?
Everyone seems to have specific ideas on when the right time is to sell. Some base their theories on the overall economy, while others will tell you that there are key buying months that you'll want to capitalize on.

If you're not buying and selling strategically or for investment, the best time to sell is really when you feel your existing home will not meet your future needs. The best reason to purchase a new home is to take advantage of your family and lifestyle changes. Do you wish to be closer to a school? Are you switching jobs? Do you have an aging parent to care for?

In Canada, weather and holidays do play a factor. Almost no one goes house hunting around Christmas, and few give up their summer vacations. Of course, those with school-aged children are less likely to move during the school year and summer is an ideal time. In some areas, there is a definite "spring cycle" -- perhaps it's a bit of spring fever and a wish to break out of the bonds of winter.

Some gamblers look for winter bargains and then try to sell their homes during the spring cycle. But overall, that could be more tension and aggravation than you wish. And the monetary results may be disappointing.

Another key factor to consider is the economy. Are interest rates higher or lower in comparison to your current mortgage? If they are higher, you may want to stick with your current home, as your new mortgage payments could be uncomfortable. If rates are lower, you might be able to trade up to a more expensive home without a significant increase in your monthly mortgage obligation.

What's more, if it's a buyers' market, you may be in a strong position to purchase a new home, especially if you have accumulated some equity in your current property.

Are There Costs Involved in Selling?
Unfortunately, the answer is yes. Even if you think your home is perfect, you may have to do some minor repairs or upgrades to make your home more attractive to potential purchasers.

  • A professional home inspection may be a condition of the offer. If the inspection points to problems, your purchaser may ask that you make the necessary repairs or choose not to close the deal.

  • Closing costs, such as lawyers' fees or unpaid taxes, will also have to be paid.

  • Mortgage discharge fees may be levied by your lending institution.

  • Sales commissions must be paid. They usually amount to 6% of the selling price.

Buy or sell first?
That's tricky. After all, if you find a purchaser for your existing home, before you've found a new one, you may find yourself living out of a suitcase if convenient closing dates can not be negotiated. On the other hand, if you find your dream home before you've unloaded your old one, you may be faced with carrying two mortgages for a time.

So how do you manage? Easy. Do your homework and have a good idea about the neighbourhood and type of home you're looking for. Do an honest evaluation of your family's needs and budget.

Speak to your RE/MAX agent and start your new home search as soon as your existing home hits the market.

If you've found a home, before you've sold your existing one, use "sale of your existing home" as a condition on your offer. If you don't sell your house within a fixed period of time, you can choose not to go through with the offer. This, however, is a difficult condition for many vendors to agree upon and you may find that you have to forgo your price negotiating power.

Purchasing a home before you sell could be a risky strategy if you're counting on the proceeds from the sale.

If you've found a purchaser before you've found your next home, use "purchase of a new home" as a condition when you sign back the agreement. Again, it will only be for a fixed time. Even if you have not found the ideal next house by the time the deal closes, you may still wish to proceed with the offer. As a buyer with a "sold house" you will be in a better position to negotiate price.

Should You Go With a Non-Exclusive or Exclusive Listing Arrangement?
If you enter into this type of arrangement with your RE/MAX agent, you are giving him or her the exclusive right to find a purchaser for your home. With this type of agreement, no other agent will bring potential buyers to your home, because only the listing agent is entitled to the commission.

You may consider this type of arrangement in a Sellers' Market during which time there are more people interested in purchasing a home than there are homes available.

Understand Market Conditions
The real estate market is in constant flux, not only as a whole but in particular areas as well. Knowing what is going on in the overall and local real estate markets will help you understand how these conditions can affect the sale of your home. We've designed the following chart to help give you an overview of the three significant market positions. When you meet with your agent, ask about the current state of the market.

1. Buyers' Market: The supply of homes on the market exceeds demand.

Characteristics: High inventory of homes. Few buyers compared to availability. Homes usually stay on the market longer. Prices are stable or perhaps dropping.

Implications: Buyers spend more time looking for a home, and when they negotiate, they usually have more leverage.

2. Sellers' Market: The number of potential buyers exceeds the supply of homes on the market.

Characteristics: There is a smaller inventory of homes with many buyers. Homes sell quickly. Prices usually increase.

Implications: Prices may be higher or perhaps climbing. Buying decisions must be made quickly. Conditional offers may be rejected.

3. Balanced Market: The number of homes on the market is roughly equal to the demand.

Characteristics: Demand equals supply. Sellers accept reasonable offers. Homes sell within a reasonable time period. Prices generally remain stable.

Implications: There is less tension among buyers and sellers. There is a reasonable number of homes to choose from.

Do You Have All of the Necessary Documents Handy?
Gather the documents you'll need to sell your home.

  • Mortgage documents: you may wish to meet with your loans officer to discuss transferring, discharging or paying out your mortgage. This is a good time to begin negotiations on the terms of your next mortgage.

  • Property survey: be sure to inform your RE/MAX agent if there have been any changes to your property that could affect the accuracy of the survey.

  • Your deed or transfer of title document.

  • Tax assessment documents.

  • Utility bills.

  • Other claims relating to your home:
    - separation agreement or court order
    - will or probate documents
    - liens
    - unpaid judgments against you
    - unpaid taxes
    - unpaid utilities
    - pending litigation

  • Pertinent condominium documents (if you live in this type of home).

  • Maintenance history (include repair receipts).

  • Items and information that will make your home more marketable:
    - photographs or videos of your home with the garden in bloom or your pool open and beautiful
    - conceptual ideas for upgrades or renovations that you have considered

Determine Your Asking Price
Before you put your home up for sale, you must set the price. And before you can do that, you must know what the house is worth. That doesn't mean what you paid for it, or how you upgraded it. Determining worth is simply finding out what someone would pay for it.

The steps in determining worth are:
1.
Understanding market conditions
2. Getting the details about recent sales in your neighbourhood

RE/MAX agents have access to all of this information. Plus, they can objectively see the big picture and tell you what makes your home unique.

Once you've determined you home's worth, you and your agent will determine the asking price. Most often, the price of a home is set slightly higher than its worth, to give a little "bargaining space." Of course, if it is set too high, it may deter prospective buyers.

If you're in a rush to sell your home, setting the asking price a little lower than what your home is worth will attract a lot of attention. But beware, if the price sounds too good to be true, buyers may be sceptical. They may even offer less than the asking price anticipating problems with the home down the road.

You will have a legal relationship with your agent. When you complete the listing agreement, you are giving your RE/MAX agent the authority to put your house on the market for a specified period. If your house is sold during that time, you will pay the agreed to commission. What's more, if the house sells shortly after the specified period because of your agent's efforts, you are still obligated to pay the commission.

Should You Offer Any Additional Items?
You may choose to include your appliances in the sale, or you may offer a redecorating allowance. You may also be able to offer creative financing. You may also consider purchasing a home warranty (covering major appliances and systems) to make the home more attractive.

Document Checklist

  • Mortgage documents

  • Property survey

  • Your deed or transfer of title document

  • Tax assessment documents

  • Utility bills

  • Other claims relating to your home

  • Pertinent condominium documents (if you live in this type of home)

  • Maintenance history (include repair receipts)

  • Additional sale enhancing items and information




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