Your home is one of the largest, if not the largest, investment you will ever sell. Therefore, you will likely want to keep the most disposable income in your pocket and knowing about the best ways to market your property can help you do that. Given that the equity in your residence is built with after-tax dollars and that any profits from your principal residence are tax-free, it makes sense that you would take the time to be informed about the selling process.
Let's talk first about hiring a REALTOR®. As a homeowner, or 'Vendor' in real estate lingo, something has prompted you to sell your home, whether it's because you are upsizing, downsizing, or relocating. You certainly don't have to hire a REALTOR® to sell a home. After all, it's going to cost you money right? Obviously I wouldn't be in real estate sales, let alone writing this article, if I thought all homes were going to be 'For Sale By Owner'. So why consider using a REALTOR®? According to a recent survey, the number one reason the Canadian public hires a REALTOR® is for the sake of CONVENIENCE. Many REALTORS® were quite surprised by this revelation considering that:
• Perhaps the most important task a REALTOR® can complete is that of providing you with the true Market Value of your home. Without this vital information, you could potentially lose money if your home is priced too low. On the other hand, you may initially price your home too high but, in the end, still sell it for an amount below Market Value. This usually happens for one of two reasons. First, if your home is priced too high it may be on the market for a longer than normal period and, consequently, be viewed as a 'problem' home by Buyers who wonder why it hasn't sold yet. Second, if your home does not sell at your price during prime time (i.e., spring) and you are forced to wait for another up turn in the market, you may end up incurring additional expenses or find yourself lowering the price to a lesser amount than if it had been priced properly to start. Regardless of the reason, if your home is initially overpriced, you run the risk of selling below Market Value or not selling your home at all.
So what is Market Value? First, Market Value is not necessarily the value appraised for municipal property tax purposes. Market Value for residential real estate sales can be described as "the highest price the property will bring to a willing Seller if exposed for sale on the open market for a reasonable time to find a willing Purchaser. The Buyer and Seller should not be under undue pressure, necessity or peculiar circumstances." For example, if your neighbour is divorcing, sticks a "For Sale by Owner" sign on the front lawn, and sells it two days later, he or she may not have sold the property for 'Market Value'. More specifically, the sign did not expose the home to the entire market, there was not enough time for proper market exposure, and there was reason to believe the Seller may have been under duress to sell.
• REALTORS® have access to the Multiple Listing System (MLS) and can put your property on the MLS system where it can be viewed by all REALTORS®. As a MLS listing, it can also be seen by Buyers from all over the world. Most of the larger Real Estate companies also have their own internet sites where you can see listings from all over the country. Check out www.royallepage.ca.
• Prescreening of potential Purchasers is also a valuable and time-saving task a good REALTOR® will perform on behalf of a client. In other words, a REALTOR® will determine if a potential Buyer is serious about purchasing a home by confirming he or she has been pre-approved for a mortgage. After all, why go through the aggravation of preparing and showing your home to someone who is not serious or cannot afford to buy your house? Furthermore, if there are 300 REALTOR®s in your area and they each have two serious, pre-approved Buyers, the quality exposure should be obvious.
• Negotiating on your behalf at the time of an offer is another example of when a REALTOR®'s services will be important. A third party REALTOR® can make the process more efficient by reducing the 'emotion' and by concentrating on the facts. An experienced REALTOR® will use his or her skills to negotiate compromises on items such as chattels, possession date and, of course, price.
So whether it is to establish market value, to assist with negotiations, or simply for convenience sake, the value of hiring a knowledgeable REALTOR® cannot be underestimated. Be sure to check out the next installment in which I discuss 'How to Select a REALTOR®'.
David Weir BA, CD is the Broker/Owner of Royal LePage ProAlliance Team Weir, Brokerage in Trenton. His sales in the Quinte area have ranked him in the Top 1% of all Royal LePage REALTORS® in Canada since 2005.