This section walks you through the offer process, understanding the specific items on an offer to purchase, along with knowing what to look for when you hire a lawyer. In addition, there are five key reasons why a home is not selling in a good market.
- The elements of this offer form a binding, legal document when signed.
- The right lawyer can help you protect one of your most precious investments.
Home not selling? The top five reasons why not
- Location, price, marketing plan, realtor and condition play a role in selling or not selling your home.
Prior to showing your home, and after a thorough evaluation with a realtor, you should have the following: a realistic idea of the price; how low you'll settle; what conditions you'll accept; and what terms would be agreeable.
With this information, you are prepared. When an offer is presented, you'll be able to compare it to your initial guidelines. Your realtor will evaluate these offers and, hopefully, arrive at one that comes closest to your objectives.
At the same time, however, your realtor will likely exercise some leveraging power with any other negotiable items. A realtor works on your behalf, considering all the factors, you as a buyer, and the seller, to work at an agreement that is satisfactory for both parties. It comes down to persuasion and negotiation. Your professional realtor has specialized training in this important area.
Evaluating the offer
An interested buyer will present an offer to your Realtor through his or her agent. Your agent will discuss the offer with you, ensuring you understand all aspects. The offer is a legally binding contract which contains the following elements:
- The names of the potential purchaser.
- Your name.
- Property description
- Conditions of purchase including:
- price
- closing date
- conditions, easements, caveats
- survey
- home inspection - An irrevocable date (you have until this date to accept, or sign back a counter offer).
- Mortgage details (such as assumable mortgage, seller's buyback, or other arrangements)
Keep in mind that the purchase price is not the final price you will receive.
That's because you will have additional fees to cover from the sale of the home
including:
- lawyer
- real estate agent
- bank (for the balance of your mortgage and for any prepayment or discharge
penalties)
- taxes (if there are any outstanding)
You and your agent should thoroughly review every detail. If there is anything you don't understand, ask!
Before you accept and sign the offer, it is a good idea to have your lawyer
review the offer. This way, you can be confident nothing has been missed, everything
is legally accurate, and your interests are protected. (see additional article
- Seek legal representation)
Accepting the offer
When you are satisfied with the offer, you'll want to accept it. To secure this
contract, your realtor will ask the buyer for a deposit. Your agent will hold
the deposit. Upon closing, the deposit will be applied to the commission owed.
If your car needs repair, you take it to a mechanic. If your teeth need attention, you visit your dentist. Likewise, when you are selling a home, legal representation can protect your investment.
Look for a lawyer experienced in real estate transactions. He or she can protect your interests, and ensure that the numerous details of your real estate transaction are handled correctly. In short, a lawyer's role, acting for you, the seller, is to ensure you get what you bargain for, at the agreed price, under the agreed terms.
When it comes to selling a home, a lawyer will complete the following services:
- Act as escrow agent to hold a down payment, binder, or money deposit.
- Evaluate offers from potential buyers. Ensure that the contract is legal and valid, and that you understand the conditions of the agreement.
- Host and handle the closing.
- Evaluate financial arrangements.
- Ensure that the adjustments are properly calculated and that the purchase monies have been properly disbursed.
- Advise you on the tax and estate issues of the sale of the home.
The sale of your home is a precise and legal procedure that must be accurately completed to protect your rights and profits. Knowing how to handle all of these details means the difference of thousands of dollars in your pocket.
Home not selling? The top five reasons why not
You've tried most everything to sell your home. But it is still waiting for
the right buyer. In a good market, there could be a few reasons why your home
hasn't moved as quickly as you'd hoped. When you review the price, condition
of your home, the listing agent's reputation, location, and marketing plan,
you'll move closer to getting your home sold.
1. Price
Prior to listing a home, it's a good idea to obtain a market evaluation (or
CMA, comparable market analysis) from two or three realtors. This should give
you a professional opinion from three reliable sources.
Sometimes a realtor may inflate the price, in hopes of getting the listing.
This person could suggest that you'll get $20,000 or even $30,000 more than
the other agents. This is called "buying a listing."
If one agent suggests a price that is significantly higher than the others,
it could mean that this realtor is not your best choice. Each evaluation should
be within a reasonable amount, compared to the others. The market doesn't lie.
If you list your house at a value higher than the market value, you will have
more difficulty selling it. Sometimes buyers perceive such a home as "market
worn." Your final selling price could be lower than if you had listed it correctly
in the beginning.
Your house is worth $140,000. You list it for $150,000. It's less likely buyers
looking for $140,000 homes will view your home. It's not within their price
range. Buyers looking for $150,000 homes will compare your homes to others that
are truly in this price range. Houses priced correctly are more likely to sell.
Sometimes, an agent will show an overpriced home for comparison when they want
to sell listings that are reasonably priced.
2. Condition
A buyer does not see a home the same way as a seller. As many homeowners have
grown accustomed to their home, along with developing an emotional attachment,
many items may be overlooked. What looks good to one person does not look the
same to another – especially a buyer. Most buyers are looking for a near perfect
home. This means clean, in good condition mechanically and structurally, and
in a pleasing decorating style.
The ideal situation would be for the buyer to move into a home, without having to do any work, including cleaning the carpet. When a buyer looks at a home, they try to imagine themselves living in the home. If any work needs to be done they are less likely to make an offer, when compared to another home that is in model-home condition. At the same time, a buyer could make an offer less than the market value, to compensate for any required work. You could lose money by not having your home in top condition.
The paint inside and out should be in good condition. Everything should be kept perfectly straight and orderly. A seller should walk through the house as if they are a potential buyer, being very critical and asking whether they would purchase a home in this condition.
A professional realtor can assist you in this task. They can take an unbiased
look at your home and suggest ways to improve your home, and most importantly,
increase your bottom line. When your home is in its "best" condition, you are
more likely to receive the best price. While it may seem a lot of work, repairing
these items will benefit you in the pocketbook.
3. The listing agent
The reputation and ethics of your realtor is especially important. He or she
could create big problems if he or she is difficult to get along. People don't
like to work with someone who has a bad attitude or a condescending nature.
Realtors who are rude or arrogant, will have far fewer showings than a cooperative
and enthusiastic agent.
Before you hire an agent, be sure to check out his or her reputation. Ask for
references. Phone the Real Estate Board. It's worth spending the time interviewing
an agent to ensure you'll get the results you're looking for. Be sure to read
the report, "26 Questions to Ask A Realtor" included in the Getting Ready section.
4. Location
The third reason a house may not sell quickly in a good market is location.
Undesirable schools, higher crime rate, untidy neighbors, busy roads and close
proximity to noise, could contribute to a delay in selling. The only compensation
available for the location factor is a lower price. An owner may have to reduce
the price so the home compares to others in more desirable areas. Your realtor,
trained in these kinds of situations, can recommend a good strategy to overcome
a bad location.
5. Marketing plan
When the factors of price, condition, location and agent are correct, the other factor is marketing plan. It takes more than simply putting a sign on your lawn to sell a home, place your home on the MLS® service, run an ad and then sit back and wait for a buyer to arrive. If your realtor is doing his job correctly, an aggressive marketing plan should accompany your listing agreement. If the realtor doesn't perform as outlined in this document, you can cancel. Your realtor must make effective use of the latest technology, plus maximizing industry and professional contacts, to ensure your home is placed before the most buyers. When all the other factors are accurate, the only thing left in a good market is the marketing plan.
This also includes showings of your home, proper qualification of buyers, handling
details of the sale and anything else that could affect the sale of your home.
All of these details are important. They could affect your bottom line.
Details are important
There is, one thing you may not be able to overcome – a bad market. In this
situation, there are many factors beyond your control. A good realtor, however,
can offer some ideas and suggestions when faced with one. For the most part
bad markets are rare. In most cases, in a good market, when price, condition,
your realtor, location and the marketing plan are established your home will
sell quickly at the right price.