Homeowners face a double quandary when faced with the prospect of selling their homes: how does one make sure the decision to sell is the right one; and once the choice is made, when is the right time to sell?

Traditionally, there have been four major reasons why and when people sell their homes: financial and market conditions, employment changes, family matters and lifestyle changes. In today's economy, one additional issue has emerged which has great bearing: low interest rates.

All these will not only affect your fundamental decision to sell, but will greatly impact your options regarding when to sell.

Financial and market conditions
Almost every aspect of real estate involves market conditions and financial issues--for the seller they are of the utmost importance. After all, it's the seller who is putting property, equity and sometimes, years of hard work on the line.

With so much at stake, it's imperative that sellers contact a real estate professional. Only Realtors have the hands-on experience and intimate knowledge of the real estate industry needed to get the best possible price for your property.

We've all heard of "buyer's" and "seller's" markets. These terms refer to the proportion of people wanting to buy versus the number of homes on the market. If the number of homes for sale outstrips potential buyers, then it's a buyer's market. If there are not enough homes to satisfy demand, then it's a seller's market.

If you're selling for financial gain, you'll obviously want to do so in a seller's market. But, if you plan to purchase another home after sale, there isn't as big a difference as you would first think.

In a seller's market, you may sell your home more quickly and for a better price, but you'll be facing the opposite challenges when purchasing. In a buyer's market, you may have to wait longer to get a fair price, but you'll have more selection and pricing options when looking for your new property.

Right now, interest rates are near their lowest in decades. This has lead to unprecedented opportunities for those wishing to buy. Often, mortgage payments will be less than rent on an apartment or town home. Therefore, a large number of consumers are considering ownership, many for the first time. For sellers, this holds the potential for a huge boom.

"Seasonality" is a term that Realtors use to gauge when home sales are expected to climb. Although this is only one factor to be considered when selling, in Ontario, springtime tends to be a time of higher activity. Buyers with children especially prefer to look in the spring in order to settle in a new home before school begins in the fall.

Employment changes
Employment changes can affect a decision to sell. There's the obvious matter of relocation if a new job or promotion takes you to a different city. In this case, selling most often becomes a necessity unless the homeowner wishes to retain a property for investment or other purposes.

Moving to a smaller urban centre may also allow you to purchase either a similar home for less money or a bigger one for the same outlay. Even if a new job does not require you to move a great distance, you should use the opportunity to assess your home ownership needs and move up if you can.

The reality is that with interest rates as attractive as they are, it's more possible than ever to make a major move without lowering your family's standard of living.

Family issues
The family issue homeowners cite more than any other when deciding to sell is children. Most often, people want a bigger home to accommodate a newborn, or may find their family has simply outgrown the home.

If this is the case, you're in a perfect position relative to today's marketplace. First and foremost, you can afford to put in enough time to sell at the right price and then find a home that suits your requirements. Contacting your Realtor well in advance of the date you wish to move will virtually guarantee you'll find a good home at a good price.

Lifestyle changes
The two most common lifestyle changes that motivate sellers are retirement. For those planning to retire, truly enjoying your latter years may involve a "cashing in" of assets. Again, it's a wise to look far enough ahead in order to use the market to your advantage and sell at a good price.

Changes in lifestyle can include things such as buying a condominium to ease the workload involved with maintenance and upkeep; city dwellers who want to live in a more rural environment, or even those who want to set up a home business.

When selling your home you want to make sure as many potential buyers as possible are aware of your property. The best way to ensure that "maximum exposure" is through the services of a Realtor and the Multiple Listing Service (MLS).

Realtors are experts, trained and licensed in the field of real estate, who service the needs of the public in the buying and selling of homes. All are members of local real estate boards and have access to the MLS -- an extensive network of listings across the country.

What is MLS?
MLS (Multiple Listing Services) - is a computer-based service that provides real estate professionals with detailed listings of most homes currently on the market.

MLS is also a sophisticated computer database of properties indexed by price, location, type of home, number of bedrooms, amenities and so forth.

The advantages for the consumer
The major benefit of MLS to consumers is that it allows the Realtor to use his or her skills to full advantage. Realtors are experts at determining what it is a potential buyer wants in a home--and a large part of the Realtor's job lies in finding properties that suit these criteria.

With MLS, a Realtor can search the database for homes that suit budgets, location preferences and family requirements, and quickly put together a short list of suitable homes.

Many consumers will find themselves first viewing MLS material at their Realtor's office to preview potential properties and narrow the list further. When it comes time to view in earnest, they know exactly what homes they want to see, what their options are and what types of properties the market has to offer.

Through the MLS, Realtors can literally view details of thousands of homes. In fact, in 1997, over 300,000 properties new to the market were listed in Ontario alone.

This gives the home buyer an extraordinary amount of choice and flexibility. The search for homes doesn't have to involve driving around neighborhoods looking for "for sale" signs. Nor will it mean relying on homes listed only in newspapers or real estate magazines. With the MLS, an entire spectrum of available properties is at your Realtor's fingertips.

Even if you're moving across country or to a distant part of the province, the MLS can be used to scout homes in advance, greatly reducing the worry that often comes with relocation.

The bottom line is that what's good for the buyer is good for the seller. This is because the main obstacle for any seller is to find qualified, motivated buyers. The only way to overcome this is to match your home to the requirements of as many potential buyers as possible. Using the MLS cuts through the complexities, exposes your property to those most likely to purchase it, and makes sure you won't waste time showing your home to those who aren't truly interested.

So, when you've made the decision to sell, make sure you ask your Realtor about an MLS listing. It could be that your Realtor will already know of a number of potential buyers, but in most cases, an MLS listing will open up a broader range of interested parties.

The Fine Print
Generally, in the agreement: you appoint the brokerage company as your agent and give its representatives the authority to find a purchaser; the duration of the agreement is indicated; and, the compensation is set out (Generally, you pay this only upon closing or when the house changes hands).

The agreement also: sets out the listing price; and, describes the property you are selling - lot size, building size, building style and materials, floor areas, heating/cooling systems, room sizes and descriptions.

Here you decide what you are taking with you and what you are leaving with the house. Generally, unless stated otherwise, fixtures remain with the property, while chattels -- things which are movable -- aren't included in the sale. If necessary, what stays and what goes are listed under "inclusions" or "exclusions."

And finally, the agreement gives the financial details:

- mortgage balance;
- monthly payments;
- due dates for all mortgages;
- annual property taxes; and,
- any easements, rights of way, liens or charges against the property.

 

Types of Listings

Setting the Asking Price
Although you may have an idea of how much your house is worth, it's important to have your home valued by a professional on its own merits. Be careful not to price yourself too high or too low. If it's too high, there's no sale; too low and you lose on your investment.

Marketing Your Home Open Houses
There are two types:

- An agent's open house, where sales representatives from the listing company will be invited to view your house. If you have signed an MLS® agreement, other REALTORS may also be invited. Remember, each of these REALTORS may have a prospective buyer.

- A public open house, where members of the public are invited to walk through your home and have a look. It's an efficient way to show your home to many potential buyers at once. The listing agent will act as host, answering any questions.

You and your listing agent will pick the time and date for an open house. In order to give the agent access to your home, you may wish to keep a key at his or her office, or in a lockbox. It's a good idea to:

- leave before the open house begins and to return after it ends; and,
- put away any valuables in secure locations.

But you may wish to stay behind. If you do stay, be sure to:

- keep out of the way;
- don't make excuses -- this only draws attention to the house's faults;
- turn off any TVs or radios to let the agent and the buyer talk in peace;
- if you have a dog, put it outside or otherwise restrain it... pets intimidate some people; and,
- politely direct to the listing agent anyone wishing to discuss with you terms or price.

Needless to say, clean counts with open houses. A general rule is that clean, uncluttered and well-lit spaces look larger and more attractive. People will naturally want to buy a house that is clean and well cared for.

Other Tools
Your agent also has other tools at his or her disposal:

The "For Sale" sign on your front lawn. This is how most buyers find homes. Your lawn sign is a "silent salesperson," constantly telling everyone that your home is for sale.

Advertising your home in the real estate section of your local newspaper or in your local real estate board publication. Even though your home may not be shown in every issue, you can count on your agent to always suggest your property to buyers who are looking for a home like yours.

Renewing the Listing
Sometimes a home doesn't sell right away. Avoid the urge to pull your home off the market... be persistent! Generally, there are three reasons why a home may not sell as fast as others:

- location
- condition
- price.

Naturally, you can't change your home's location, but you can fix the condition of your home and you can, of course, adjust your price. Throughout the listing process, you need to be constantly comparing your asking price against those of similar properties in your area. It may be time to adjust the price of your home.

Review your selling strategy regularly with your listing agent:

Is your house being shown regularly?
Are you receiving the feedback from prospective buyers?
Are you in touch with the marketplace?
Is your property competing well? If not, what else can you do?

The Offer
The offer outlines:

- how much the buyer is willing to pay;
- when the buyer would like to take possession;
- any conditions attached to the offer; and,
- when the offer expires.

As an act of good faith, the buyer will make a deposit with the offer. A good deposit will often show the buyer's sincerity.

Along with this, the buyer may: attempt to "low ball" you, and submit an offer much lower than your asking price; or, attach conditions to the offer.

You don't have to accept the offer. You may wish to make a counter offer that comes part-way to meeting the offer's conditions. The counter offer is one more step along the way to negotiating the final terms and conditions of the sale.

The offer, once signed by everyone, is a binding contract. Make sure you understand and agree to all of the terms in the document. You may want to have it reviewed by your lawyer before signing.

Before Closing
If necessary, and if the buyer makes it a condition of sale, you may be asked to:

1. provide a current survey, or a "real property report," showing the location of the house is on the property owned by you and that there are no encroachments;

2. prove that you have title to the property (the buyer's lawyer will check this out when he or she conducts a title search to see if there are any liens on the property, easements, rights of way or height restrictions); and,

3. provide a health inspection certificate, if there is a septic system, stating the system meets local standards.

The buyer may also make the purchase conditional on an inspection by a qualified engineer. You may be asked by the buyer to cover this cost.

Closing the Sale
On or before closing day, this is what happens:

• the lawyers representing you and the buyer will set up a trust account for the money coming from the sale and will pay off any mortgages you owe on the property. After these are paid, you will receive any money you have coming from the sale;

• you must deliver the property deed or transfer documents, mortgage details and keys to your lawyer. Your lawyer will register the mortgage discharge and transfer the deed at closing; and,

• your lawyer will ensure that you receive compensation for prepaid expenses such as, property taxes, electrical or gas bills, or if applicable, any heating oil left in your tank.

Some lenders will make it possible for your mortgage to be portable, so you can take your mortgage with you when you move to your new home.

Finally, two things to remember:

• the capital gain from selling your home is tax exempt. This means the profits from selling your home are not taxable; and,

• protect your investment and the deal by keeping your insurance policies in force up until the date of closing.

Here, your responsibilities under the listing agreement end. You'll have paid your listing agent the agreed-upon compensation. This can be done by your lawyer who can arrange the payment from the proceeds of the sale.