8 Steps to Selling Your First Home
You’ve had this feeling before. You’re not totally sure how things are supposed to happen. A million questions are bubbling on your lips. You know your goal, but you need some guidance on how to get from start to finish.
Only this time, you aren’t a first-time buyer. You are on the other end of the equation: you are a first time seller.
Here’s what you need to know.
- Do I really need an agent to sell my home?
- How do I pick a real estate agent?
- How does the listing contract work?
- What do I have to disclose?
- What do I need to do to get my home ready for sale?
- How does the offer process work?
- Once I have a firm sale, what are the next steps?
- What are the final costs of selling?
Do I really need an agent to sell my home?
Nope. You don’t. You can take photos, post a listing on Craigslist, host open houses and private showings, and then negotiate the best deal and a solid contract all by yourself.
How do I pick a real estate agent?
Don’t want the headache and potential lawsuit of selling your own place? Hire a professional! That’s what we are here for.
We know the things that create the most hassles and headaches and how to avoid them. We know the market and the best ways to ensure that you get the best possible price for your home. And we know how to minimize your exposure to the financial and legal risks that come with negotiating a contract to sell what is almost certainly your largest asset—your home.
If you enjoyed your experience with the agent who helped you buy your home, give them a call. If they did a good job for you once, they will likely be happy to help you sell now.
Unfortunately, not everyone has a positive experience the first time around. If that’s the case and you are looking for someone new, start asking around. Ask your friends and family who they used. Find the name of a qualified REALTOR® who did a fantastic job for people you know. Interview two or three of them and see who would be the best fit for you. You need to pick someone you like and trust, someone who knows the market in your neighbourhood. And be sure to use an agent who really knows your area. Using your friend’s aunt from Maple Ridge will not give you the results you need when selling your condo in Vancouver.
If you can’t get a decent referral out of anyone you know (or if you just couldn’t relate to your mom’s friend’s brother’s girlfriend who sells ten-million dollar houses in West Van), check the for-sale signs around your neighbourhood. If you see a few signs with the same name, give them a call and interview them; they probably specialize in your neighborhood. Check out some open houses in your area. You will meet lots of Realtors and you will see how different we are. Chances are you will click with one of them.
How does the listing contract work?
Once you have chosen your agent, you will sign a listing contract with them. The two most common types in BC are exclusive listings and multiple listings, the latter being the most common as it puts the listing on the Mulitple Listing Service® (MLS®).
The contract will set out lots of things, many of which you will have to first discuss and agree with your listing agent:
- Your name and the name of the brokerage you have chosen to work with (agents are licensed under a brokerage, such as RE/MAX or Sutton).
- The address of the property you are selling.
- Effective date and expiry date of the contract (two months is the minimum amount of time).
- Description of services to be provided by your Realtor (marketing services, how offers will be presented, etc.)
- The asking price (listing price).
- The remuneration (commission) you agree to pay.
- The commission you agree to offer to the cooperating brokerage (buyer’s agent) out of the total commission.
What do I have to disclose?
The more you tell your agent, the better the job they can do for you. But there are some things that you absolutely must disclose. These include any material latent defects in your home, which also must be disclosed to all potential buyers.
A material latent defect is something that is not visible through a reasonable inspection of the property. These include but are not limited to:
- structural damage;
- water ingress;
- underground storage tanks;
- termites; and
- use as a marijuana growing operation (“grow op”).
Now your contract is in place and the property is being marketed, it's time to get it sold.
What do I need to do to get my home ready for sale?
So you’re ready to get the home shown to buyers and a deal made. So what’s the next step?
Start by decluttering! Most of us have too much stuff and not enough space for all of it. Buyers want to picture themselves living in a home, and that’s hard to do when it’s full of someone else’s personal items.
Your listing agent or a professional home stager can give you lots of tips specific to your space, but generally speaking, decluttering and cleaning go a long way. If the paint is really dark, a fresh coat of Cloud White might be in order. But don’t think you need to renovate your kitchen just to get the sale. Buyers may have their own ideas about renovations they’d like to make, in which case any money you spend on renovating the place yourself may be wasted.
De-personalizing your home a bit is also quite helpful. For example, take down family photos that remind potential new buyers they’re in someone else’s home. Help them envision themselves living there and you’ll be more likely to get an offer.
How does the offer process work?
Your beautifully decluttered and staged home is on the market, your agent has hosted open houses and showings, and now you’ve got an offer – maybe even more than one. So now what?
With any offer you receive, you can either accept it, reject it, or counter it. If you counter the offer, the buyer can counter back, accept your counter, or reject it, and so on.
As the market stands now in most of the Lower Mainland, it is common to receive more than one offer, especially on single-family homes. Before offers are presented, you and your listing agent need to decide if you will receive them by email (so that just you and your agent are present while reviewing them) or if you want to let the buyers’ agents present to you in person.
If you choose the latter scenario, your agent will arrange for each offer to be presented at a different time. For example, if there are three offers, the first one will be presented by the buyer’s agent; they leave and the next buyer’s agent comes and presents; after they leave, the final buyer’s agent presents. Then you discuss all three offers with your agent. You may choose to accept one of them, reject all of them, or counter one of them. If all offers are close, you can also give all parties the opportunity to come up in price. Your agent will discuss all scenarios with you.
Once I have a firm sale, what are the next steps?
Congratulations! You’ve sold your first place! Now what?
Just like when you first bought your home, you will need a real estate lawyer or notary to handle all the financial stuff. This includes ensuring your old mortgage is properly discharged and that all payments you are responsible for have been made (property taxes, strata fees, and so on).
Your lawyer or notary will do a statement of adjustments for you. For example, if you sell your place at the end of November, but you’ve already paid your property taxes for the year, the buyers will be responsible to pay for the month of December, and you will be credited for that month on your statement of adjustments.
Your lawyer or notary will disburse the money from the sale and ensure you receive the net proceeds.
If you are in a strata property, you will need to notify the property manager. Most strata corporations have a move-out fee. You will also need to notify your home insurance provider, cable, internet, hydro, and so on, and forward your mail.
What are the final costs of selling?
Costs of selling include, but are not limited to, the following:
- Lawyer or notary fees
- Costs of clearing title (which can include paying a mortgage penalty to your bank)
- Real estate commissions (plus GST)
- Cost of movers or move-out fees, if applicable.
Now that you’ve sold your first place, you’ve got one under your belt and hopefully had a positive experience from start to finish. You will never be a first-time seller again. Congratulations!