With the market going through constant change, it is natural that Sellers would be thinking about selling privately to maximize their profit. This is a tough market and you have to be primed to sell, so here are some suggestions that might help:
1. Make sure that everything in you house, construction-wise is perfect or close to it.
99% of homes in this market will be inspected for flaws, so you need a knowledgeable 3rd party to go through your home to make sure it will pass a home inspection. You might even want to hire a pre-selling Home Inspection by a certified Home Inspector.
2. I suggest that you disclose in writing what the Home Inspector finds.
Certain issues could prove to be an out for a Buyer at or before closing time, if you knew them and did not disclose them at the time of the Offer.
3. Follow their advice especially if it entails storing a lot of clutter.
I would suggest off-site storage rather than filling the basement or garage to the brim. This just broadcasts to the Buyer one of the shortcomings of your home.
4. Once your home looks great, the number one step in marketing is correct pricing.
Make sure that you know what the most recent sales are (not listings, as they may be overpriced) and then reduce your house to reflect that you are not using an agent.. If you are offering your house privately, the buyer must perceive a benefit to them. The biggest mistake private sellers make is pricing their house within the market range and not reflecting that there is no commission.
5. Develop a web presence for your home.
Very few people buy anything today without searching on the Internet so your home-sale web site must be viewable by the largest market out there. Remember that your competition is National, Regional and Local MLS that have spent years and thousands of dollars to be in the top positions, not to mention the Brokers and Franchises.
6. Make sure that you hire a professional photographer who offers Virtual Tours or Video.
Buyers want as much information as possible before they even view the property. I believe in these photo formats so strongly that I even pay for these photos for vacant houses or ones needing major renovations. Don’t waste your time or the Buyers by alluding to qualities that are not there or could-be-maybe-potentially there…Let the buyer decide.
7. Post the site on www.kijiji.com or on www.CraigsList.com.
Both offer great visibility. However, make sure that you re-post often as they keep the newer posts at the top or on Kijiji you can pay to have your post on the front page for a period of time.
8. Make sure that any contact phone numbers or emails will be answered by you or someone else immediately.
Unless I am in a business meeting, I respond as soon as I can. Buyers, mostly come from a generation that views microwaves as slow cooking….you must be prepared to respond ASAP.
9. Realize that you will get a lot of phone calls from Buyer-agents who will tell you that they have clients that would be perfect for your property.
They may be right, so allow them to show your house. Remember they, like you, will not work for free so your pricing should take that into account.
10. Open Houses are the way that a lot of Buyers surf the marketplace to buy. Make sure that you use proper signage.
The City of Toronto mandates that all Open House sign show the address and time of the Open House. Make sure that you have visited the local stock of houses in your area with a Buyer’s eye. To be noticed you will have to be the best on the market that day.
11. If you receive an Offer on your property you should have a knowledgeable 3rd party (Lawyer) lined up and ready to take you through the contract, explain the clauses and watch for conditions or timing that could pose future problems.
When I sit down with clients, their first thought is price, mine is the terms and conditions. I have seen too many times when sellers became so obsessed with price that they forgot other “small” issues that by closing became “huge” ones. The job of the 3rd party is to make sure that those issues are not missed in all the excitement. Make sure that if that 3rd party is also giving you pricing advise that they know the market and have a grasp of negotiation skills and can view the issues from the Buyers side., when needed, to give you a dash of realism when you have a flight of fancy.
Note: when I have bought or sold for myself I have always run through my offer with an Office Manager or Lawyer for that important 3rd party viewpoint. Sometimes they have presented my own offer for me so I can have the proper emotional distance to make the right decisions.
12. The Toronto Real Estate Board has a consumer info page that shows six of the major Forms that are used in Ontario with the plain language explanations. Follow this link for more information.
13. Put all communication that occur between Buyer and Seller, after the Agreement of Purchase and Sale has been accepted through the 3rd Party, by email rather than phone.
Make sure that all is kept in an online folder until closing and up to 6 years after just in case.
14. Do not use the same lawyer to close the transaction for the Buyer and Seller so that you can “save” money.
Make sure that all parties in the transaction disclose, in writing, their relationship to either you or the Buyer. REALTORS must always disclose their fiduciary duty in writing at the time of the offer.
15. The Agreement will usually allow for the Buyer to visit your property for a Building inspection and visits to measure.
Make sure these are stipulated in the contract by both the number of visits and the length or you could be in for a big surprise when all the 20 long-lost buyers’ family members visit with three contractors looking to compete for quotes. I usually suggest two or three visits of no more than one hour at mutually agreeable times. I would suggest you not be there and .that all questions and answers be done in writing so there are no misinterpretations later…the old he said-she said.
16. Ask for a substantial deposit, 5-10% of the Purchase Price to be held by your lawyer in Trust.
The amount of deposit gives you a sense of the seriousness of the Buyer.
17. Conditions on Financing and Building Inspection: Most offers in this market will have conditions that must be met within a specified time period. Keep the time as short as you can.
For a Building Inspection or Financing, I suggest no more than three Business days. Hopefully your Buyer will have been pre-approved by the Bank and then there is little to do but a quick appraisal of your property. Building Inspectors should be able to complete a full inspection within 3 Banking days and give the report to the Buyer. Be aware that the Buyer may try to renegotiate the price if the Inspection is of poor quality.
18. Conditional on the Sale of the Purchaser’s Property: This is a tough one, made tougher because you have no control of the asking price of the Buyer’s Property.
You may have sold your property conditionally for a great price and find that the Buyer decides to overprice their home. In essence, your home is pulled from the marketplace with little guarantee that the Buyer will get a satisfactory offer and start the ball rolling. You might want to ask the Buyer to have a Professional appraisal of his property before agreeing to this Condition.
19. Do not accept any cash as part of the transaction.
FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) is keeping an eye on suspicious movements of cash and I am authorized to ask for and retain the personal information of all Sellers and Buyers.
20. Be careful of Scam artists. They sometimes hunt for Private Sellers because they think that there will be less scrutiny in the transaction.
A client of mine whose brother helped her sell privately accepted a long conditional offer. A week after it fell through we listed at $399,000. Imagine our surprise when a Bank called to say they had an offer sitting on the desk of their fraud department for $540,000 of the property. The conditional Buyer was trying to finance a house for $150,000 more than the value. Thankfully, the transfer was held up by the Bank’s scrutiny.
Hopefully, some of these suggestions will help you sell privately but if not know that there are a number of excellent hard-working Realtors in the marketplace every day to help you. If you have any further ideas, please feel free to comment!