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Everyone who considers putting their Waterloo Region home on the market for sale wants to make the most money possible. But what’s the best way to do that?
To sell your home for the most money, it is best to consider local trends in your market, the overall cost of selling a home, and the best selling approach to accomplish your objectives. The highest bid will not always leave you with the most money, and the costs of major renovations will not always be recouped.
Here are some things you should consider to help you make the most money selling your Waterloo Region home.
Understand Current Local Market Conditions
When there are more homes for sale than buyers, prices are usually pushed down as sellers compete for fewer buyers. It’s a buyer’s market. On the other hand, it tends to push up prices when there are more buyers than there are homes for sale, as buyers compete for fewer properties. This is the opposite of the previous example, this is a seller’s, or hot, market.
A good way to gauge whether you’re in a buyers’ or sellers’ market is to look at the average Days on Market for similar homes in your area. DOM is a real estate statistic that shows how long homes are actively listed on the market. If similar homes to yours are selling faster than the average DOM for your area, then it can suggest strong demand.
You should also look at the rate of home price appreciation for homes in your market. Home price appreciation shows how fast home prices are rising; a steep increase can signal that buyers are paying more.
These trends will impact how you price your home and your ability to negotiate things like repairs and offer conditions. They can also give you insight into how long it will take to sell your home, which can impact your costs.
These are all things that your local real estate agent will know too, and so their advice on pricing and even the best time to sell will be based, in part, on this information.
Choose the Right Time to Sell
Home sales ebb and flow with the seasons. Spring typically brings the most buyers because many people want to move during the warmer months when the kids are out of school. While seasonal trends vary by market, they aren’t the only factor to consider when thinking about “the right time to sell”, especially when real estate markets all over the world have been turned upside down by COVID-19.
To sell your home for the most money, it’s often smartest to sell at a time when you have enough equity in your home to pay off your current mortgage, the costs of selling, and the costs of moving. Otherwise, you’ll need to cover many of these expenses out of your own pocket.
Set the Right Price
If you overprice your home, then you risk having to drop the price, taking longer to sell, or making it harder for buyers to discover your listing. Over time, buyers become skeptical of homes where the list price is continually declining, suggesting that there is something wrong with the home or that the seller has unrealistic expectations. This can limit your negotiating power because buyers often perceive the trend as a sign your home should be discounted.
Most buyers also search using a price range so if you price your home beyond what a reasonable person would pay, you make your home harder to discover in the first place.
Pricing is the one area where you really should listen to your agent over anything you read online, and especially over those online real estate calculators.
Every home is unique, even on a street full of rather samey homes, and only after considering the appeal of your unique home, along with the neighborhood, other local factors and the current market trends and conditions can anyone come up with a sensible selling price, and the best person to do all that legwork (and number crunching) really is an experienced local real estate agent.
Understand How Much it Really Costs to Sell a Home
When selling a home, it’s easy to fixate on the 5-6% that’s typically paid in real estate agent commissions. However, when you factor in all the other expenses—closing costs, seller concessions, maintenance and repairs, moving and home overlap costs—the total cost of selling can reach closer to 10% of the sale price.
Again, talk to your real estate agent to help you determine what your real selling costs will be. They will be able to give you an honest estimate and maybe even help you save some money by recommending more reasonably priced contractors, inspectors etc. than you may have been considering.
Presale repairs and renovations are often a bit of a puzzle for homesellers. Essential repairs should always be made of course, but renovations that sound like they will help you command a higher price for your home may not always do so.
Renovate with care, and ask your real estate agent for input before you do, as they are the ones who probably know better than anyone else just what home buyers are really looking for right now.
Negotiate the Best Offer Not Just the Highest Offer
It’s natural to want to grab the highest offer you receive for your home, especially if it’s more than your asking price. But don’t jump without reviewing the terms. Most offers include conditions, which are a set of terms in your contract that allow either the buyer or seller to cancel the agreement if those terms aren’t met.
Here are a few examples of conditions a buyer might include in their offer:
A financing condition allows a buyer to cancel their offer if they aren’t able to qualify for a mortgage. If you accept this conditions as a seller, you run the risk of wasting time by having to relist your home and start the process all over again.
Most real estate agents would advise never doing so, and to be honest most of us won’t even show properties to buyers who do not have proof of their ability to get financing, so this SHOULD be a very rare occurrence anyway.
Home sale condition
The home sale condition is a way for a buyer to ensure they will have the proceeds from their existing home before they purchase yours. The risk here is that the buyer’s timing doesn’t align with yours or the buyer isn’t able to sell their home, giving them the right to walk away.
The inspection condition provides a way for the buyer to negotiate for repairs, ask for an extension of the closing date, or even rescind their offer if the home inspection turns up any major issues that weren’t disclosed. This is a common reason why pending sales fall through.
This is also becoming more important in the face of COVID-19. As some buyers may only view the property via virtual showings, they are relying more than ever on their inspector to be their ‘eyes on the ground’ and are more likely to insist on this type of condition.
You can avoid most problems associated with inspection conditions by getting a seller’s inspection done before your property is listed in the first place.