Some people opt to sell their home themselves, without the use of a realtor. We like to offer you some insights on mistakes that many private sellers make. Over time, we only came across a few situations where we had to deal with the seller directly. But despite that, we can offer you a plethora of tips you should avoid when you sell your home privately.
The most common reason for sellers to sell privately is to save on commissions. Sometimes sellers feel they can do a better job than any agent. Often these decisions are backed up by bad experiences with realtors.
Whatever your reason is to sell your own home, we hope you find the following tips helpful.
Before selling your own home
Consult with a real estate lawyer as early as possible in the process. You will probably need to consult with this real estate lawyer during the process of selling. Questions will arise about the contract, but also about things like latent and patent defects in your home, title, the Real Property Report etc.
Get your RPR, the Real Property Report in order. Consult with your real estate lawyer about its validity.
Understand the purchase contract, which is between the seller and the buyer. It is a lot of legal print. Talk to your lawyer about the sections you are not sure about. Knowing more, makes you come across stronger during the negotiations.
Invest in pricing your home. Consult with a real estate appraiser and be able to hand over a well-documented report that justifies the price you’re asking for your home. Don’t price it too high because today’s buyers know more about home prices than ever, thanks to the internet. We actually have a full article about how to price your home and mistakes sellers make when pricing their home.
Have a professional photographer make the images. Photographing a home to sell is not as easy as many people think. Your images are the first thing potential buyers see on the internet, so make them good. But also keep them realistic. It is all about expectations. Buyers need to see reality, not a Disney palace.
Hire a professional company to do the measurements of the property. Google for these companies because in Calgary there are plenty. Invest a few hundred dollars in this. Good images, along with correct measurements make a real difference.
Show your home in tiptop shape. Everything must be in working order. Think of how buyers see your home; if one light bulb is not working, they may think there is probably something wrong with the electrical. You can read more about this in how to prepare your home for selling.
If you sell a condo, you need a long list of documents. Documents like bylaws, financials, disclosure statements etc. Make sure you have every single document available that is required as per the contract. The list is pre-printed in the purchase contract. You will have to contact your management company and purchase these numerous documents.
Learn upfront about particular items such as restrictions that the bylaws mention. Especially pet restrictions and age restrictions. Be able to answer questions quickly and correctly, backed up with paperwork.
Show your home to potential buyers
Don’t obstruct showings in any way:
- Be reachable, either by phone or text for realtors to request a showing.
- Never say ‘no’ to showings requests. Always allow them.
- Use a key-less entry. You can use a numbered lock or hang a numbered lock-box on the doorknob. Lock-boxes are available at any home improvement warehouse.
- Avoid those instances where you as the seller must meet with the realtor (and buyers) to allow access to the home.
- We cannot speak for all realtors, but most agents work with a route and show several homes in a certain time frame. Don’t be the seller who obstructs that route and timing that realtors work out. It is annoying for realtors, but just as annoying for buyers. They want to see your home, on their timeline.
Don’t be present during viewings. Realtors and buyers want to be able to walk and talk freely during their viewing in your home. Nothing is more annoying than a seller hovering, telling potential buyers how great the closet space is, or pointing out ‘this is the kitchen’, and ‘this is the bathroom’. Buyers know what a kitchen looks like!
Let agents and buyers walk around and talk freely during the showing
If you must be at the house, for example, to open the door, stay outside. Let agents and buyers walk around and talk freely during the showing.
Stay open for any communication from a realtor. Answer every question s/he asks. And take every question seriously. Even when the question doesn’t make sense to you. What we are really saying here is, don’t try to be the “I know it better person”. It scares away agents and potential buyers, and it can potentially jeopardize the sale of your home.
Update buyers about relevant upgrades to your home. What are the ages of the furnace, the hot water tank, the roof etc. Have as many receipts available as you can. Establish trust that way.
Offer the realtor who brings a buyer ‘full’ commission. There are still realtors out there who drive around with buyers without a buyers-agreement. It is easy for an agent to avoid showing your home because you offer less commission then 99.9% of your competition.
You may consider offering a bonus. But the general consensus is very divided if bonuses for real estate agents work or not. The idea of a bonus is that a realtor will push potential buyers more towards a home where the owner offers more commission in terms of a bonus. However, our personal belief is that today’s buyers don’t let themselves be pushed into a home. If you do decide to offer a bonus, never ask the buying realtor to ‘throw’ in his or her bonus. It is unprofessional, and it can backfire during the negotiations in another way.
You may consider doing open houses. Although open houses don’t necessarily sell your home. In fact, selling your home through an open house is extremely small. If you do an open house. never follow visitors during your open house. It is very awkward for buyers, and people are very quickly ‘turned off’ by someone hovering around and telling about how great the location is, etc.
Keep your motivation for selling to yourself. It is like an arrest: “anything you say can, may or will be used against you”. If a realtor asks and you have a motivation that could work against you, you can say that you don’t want to disclose your reason to sell. This may raise a red flag and ultimately, that is another reason to make sure you are not present at the showing.
When an offer comes in and negotiation starts
Try to keep emotion out of the process. We once worked with a private seller who seemed not yet emotionally ready to sell her house. It became a very difficult transaction where the seller took many things personal. It was very difficult to translate this in a sensible manner to our buyers. However, this needed to be discussed. Our buyers were ready to pull the plug and back out of the transaction. Should this seller have had a realtor, this emotional angle could have been avoided. Not just for the seller, but also for the buyers.
Try to keep emotion out of the process
Entertain every offer. Even ‘low-balls’. Just counter with a small number, if you feel you are being ‘low balled’. Try to keep the conversation going during negotiations.
Know your ‘line in the sand’ during negotiations. You can negotiate firmer and hold up better to avoid leaving money on the table. In most cases realtors have more experience in negotiations then you. But whatever your minimal acceptable amount is, it must be realistic! Again, consult with an appraiser and pay a few hundred dollars for a good and solid report you can use during the negotiations.
Consult with an appraiser and pay a few hundred dollars for a good and solid report
Accept conditions such as home inspection, financing and condominium document review. These are very normal, standard conditions a buyer wants and needs. These 3 conditions are even pre-printed in the purchase contract. In Calgary, a buyer usually needs 7 to 10 business days for these conditions to be fulfilled
Stay away during the home inspection. As with showings, potential buyers want to be able to talk freely about any issues that may come up. Buyers may negotiate on price for any defects that come up during the home inspection. Buyers pay many dollars for their own home inspection and are most likely not willing to give you the entire report. As a seller, you may ask for the particular pages from the home inspection report, about that particular issue. It is up to you to re-negotiate the price, or to fix it before possession with an added term in the contract, or to refuse either. In that last case, a potential buyer may walk away by not waiving the home inspection condition.
This list of tips is not complete by far. We started in real estate in 2009 and over the years, not one transaction was the same. Every transaction seems to have its own issues and ‘curve balls’. Also different cultures and personalities come by in all those transactions, and need different approaches. However, this list is a good starting point. It seems to cover the first basics that came to mind after dealing with just one self-represented seller. This list could hold plenty more issues to discuss if we dealt with even more self-represented sellers. The truth is that not many people consider selling their own home. Eventually the general consensus seems to be that many self-represented sellers don’t save as much money as they think they will.
Browse through our selling tips to learn more about selling. To keep an eye on sale prices in your community, you can request a market report. This is a free monthly report with sold homes in your community.
The above is general information only, and is not meant to be legal advice upon which anyone may rely. If you have questions about a specific property or transaction, please speak to counsel for definitive advice.