The Home Selling Process in Detail

Following is more detail on the home selling process.  For owners, I always recommend getting to know the market before you are ready to put your home on the market. A good Realtor will give you stats, comparisons and other information and interpret that information for you. However, you are facing important decisions on a major asset and having your own sense of the market will provide peace of mind and confidence in the advice you receive.

A PCS search for homes similar to yours will lead to better understanding of the market. Plus PCS will tell you what price homes sold for, the only source that does that other than talking to a realtor. For more, see Get PCS.

If you would prefer information in a printed format, I have a 16 page listing package I would be happy to get to you, please send me an email from the Contact page.

Kayaks line the beach at Comox Lake during the annual snow to surf relay.



Get to know the market


An old wooden bridge crossing Oyster River.

If it has been sometime since you purchased your home, it would be a good idea to do some looking around before hand and see what homes are selling for.  Of course a Realtor will show you comparable properties and suggest a price, however this is a large asset and you may be more comfortable having your own sense of what your home is worth.

With the internet, this is relatively easy to do.  You can go to the public MLS® site at realtor.ca or many Realtor sites also have search as you can find here under MLS® Searches.

Unfortunately, these searches only show you the current list price, not the past ones so you don't see the price movement.  They also don't show you what price the homes sold for, which is important information for sellers.

You can get sold price information with a PCS search.  This source will tell you how long a listing has been on the market, show you all price changes and the sold price, and much more.  You can have multiple searches and the listings come to you.  Every time there is a new listing or a price change PCS will send you an email. That means you don't waste time going to various sites and re-do searches. For more information on PCS see PCS How It Works. There is no obligation and you can unsubscribe anytime.



Decide when to sell

Unlike some larger markets, there is really no bad time to list here on Vancouver Island.  Yes there are fewer buyers in the winter, but those looking then tend to be more serious.  There are also fewer listings to compete with then.  In a typical year listing and sales volume tend to peek in May or June. There is really no seasonal difference in the price you may receive.

It is more important to schedule a time that suites your needs and gives you enough time to get your house ready. Discussing your plans with a Realtor will help to outline what you can expect on price, time on the market and if purchasing locally, coordinate the transition smoothly.  If moving out of market talking to a Realtor in that market will be helpful as well.

 

 

A historical building on Cumberland's Dunsmuir Avenue.


Tip: With the markets being tight, it is important to not pre-promote your listing before it is on MLS as that may reduce the chance of receiving multiple offers.  See Listing below.


A lone man takes in his surroundings while a brisk wind blows onshore at Point Holmes in Comox.

Financial Considerations and Mortgage Costs

If you have a mortgage, one of the first things you will want to check is to find out what penalties there are for paying out your mortgage early. Usually the penalty is three months worth of interest payments. If you mortgage rate is higher than current mortgage rates, there may be an interest rate differential. These charges can substantial, especially if you have a second mortgage at a higher rate. The reason for this charge is that when the mortgage rate is higher than the current market rate that means when you pay your mortgage out the bank will receive a lower rate when they re-lend those funds, so they charge you the difference.

Your lender may have a mortgage penalty calculator on their website.  Here is one from CIBC and one from Canadianmortgagetrends.com.  If you plug in the same scenarios in these two calculators you will receive different outcomes, so it is best to talk to your lender directly. The shorter the time to when you mortgage matures, the less the interest rate differential penalty may be.

There may be some other considerations with your mortgage and buyer financing.
Read More


Finding a Realtor

Your home is a significant asset of yours and selling and buying can be stressful and it is getting more and more complicated every day. 2016 saw a number of government changes, as well as market changes.

A good Realtor can make a difference and will guide you through the process and be knowledgeable on the information and changes you need to be aware of. While not an accountant or lawyer, they should have a good base of knowledge of the factors important to you and be able to steer you in the right direction.

On of the more important aspects is to find an agent that you are comfortable with. Realtors are people too, with different personalities, service levels, experience and knowledge. For more information on what to look for in a Realtor, and understanding what they should know, see Choosing A Realtor.

The Comox Valley in the afterglow of sunset, seen from Goose Spit Park.



The Listing


You have heard "you only get one chance to make a first impression." In the old days of printed catalogue, with only one black and white picture, buyers' fist impression of your home was when they drove up and walked in the door. That is where the term "curb appeal" came from.

Now the first impression is the listing. As the graph shows, the majority of buyers first saw the home they bought on the internet, with PCS being the number one source.

When your listing is posted on MLS®, PCS it will automatically send your listing, by email, to about 1,000 buyers, or more, depending on the location and price. That is why it is important to not pre-promote your listing, in the real estate office for example, prior to be put on MLS®.  

In today's strong seller's market you want to reach everyone at the same time to increase your chance of receiving multiple offers.  Receiving two offers at the same time may increase the price you receive by 2-4%, more if you receive more than two offers. At an average price close to $500,000 that works out to tens of thousands dollars. Timing and doing it right can be important.



Since the listing is your home's first impression to potential buyers, and it is being sent out to many buyers on day one, it is important that it is complete right from the start. That includes all the information, great pictures, floor plan if you want one, and other factors listed below. For a printed booklet on listing your home, please contact me.

  •  Managing Expectations: My background is marketing and I cannot state strongly enough how important this is.  Buyers are going to see your home and if the listing is an obvious over exaggeration, they will see that and be disappointed. Disappointment is hard to overcome. No home is perfect for everyone, the goal is to attract those that need and appreciate what your home has to offer. Be positive and honest.
  • Position: This is a marketing term and here we position your home against the ones you are competing with, accenting the positive and being honest. A two bedroom home, which does not work for everyone, could be positioned as great for downsizing or a starter home. Trying to position you home as something it is not will not work well and may insult buyers. While a safe, reliable car, Volvo is not a Ferrari. 

Picturesque Brown's River Falls, Comox Valley.



Tip: while a bit of work, having pictures that clearly show outside the window adds a dimension to the photo and represents how the eye sees the room.

  

  • Pictures: For some people the pictures are the most important and help them make a connection with your home. As in the picture to the left, being able to see clearly out the window adds another dimension to the photograph. Takes a bit of work with the camera and on the computer. Blinds up, curtains open and no glare. I also avoid wide angle pictures as they make the room look larger than it is and leads to disappointment.
  • Description: Buyers are looking at a lot of listings, they don't want a romantic story full of fluff, and they do want more than just a few lines. A well written description will quickly convey the features and uniqueness of your home.
  • Floor Plans: Unless the floor plan is a unique feature of your home, I generally do not recommend them. Yes buyers find them useful, they use them to decide which homes not to see. Often I'll see a listing in a client's PCS, or on the computer with them, and they decide they don't like the floor plan. Unfortunately, floor plans are not sexy and really do not allow the buyer to fully connect to your home. Buying a home often involves some compromises and something they do not like on the floor plan may not bother them when they experience all of what you home has to offer.
  • Documents: It is important to make it easy for realtors to write offers on your listing without delay. At minimum the title and property disclosure statement should be attached, plus any other disclosures that are required.
  • Property Disclosure Statement (PDS): Ensuring the buyer has the PDS prior to making an offer is important for a couple of reasons.  One, if there is a defect that needs to be disclosed it can be done on the PDS. Two, no home is in perfect condition and being forthright here can help down the road as most buyers have an inspection and will likely eventually discover things. For example, if the roof is 20 years old, then say that. If, after the inspection they come back and say the roof only has a couple years left, then our first position would be that they knew that when they made the offer. Most roofs need replacing by 20-25 years.


Pricing your home

Buyers and sellers set the market prices, not Realtors. It takes agreement between a buyer and seller to make a sale. It takes a group of sales to make a trend. Supply and demand are the main factors affecting the market, though the economy, interest rates and other factors such as the governments can affect things. Usually by affecting demand and in some cases supply. Demand is high these days leading to a strong sellers market. See Fair Market Value for more.

Successful pricing is a process and takes some research. Even if I recently sold a home on your street, I go through the whole process. Once the research is done I will advise you what the market is suggesting, what we list at is up to you.

First we will look at the sales of comparable homes in your area. While no two homes are identical, this is a good first step and will provide a target price range. With an increasing market such as we have, we do not want to go to far back in time and should try to stay within your neighbourhood as location is an important factor. It can be helpful to watch the market on PCS for a time before listing to see what homes are selling for.

To augment the comparable sales, I will take a broader look at homes in your area and do a price per sq ft comparison. This provides additional data to consider. These two approach are somewhat analytical and buyers do not buy just based on the numbers, feelings and emotions are important as well.

For buyers to buy a home it must make sense for the head and feel right for the heart. We will then look at your home from the buyer's perspective, identify the features of your home and consider how the buyer may feel about them. Identifying what attracted you to your home and neighbourhood is helpful here.

Lastly we factor in current market conditions that the buyer is operating under and develop a strategy.

A young vendor attending the Comox Filberg Festival



The main factors affecting the price per sq ft are the size (goes down for larger homes), style (ranchers are in high demand), age, original building quality and the condition.  Some of the minor factors include extras like garage vs. car port, extra buildings (garages and shop), landscaping, views, hot tub, pool, heating type, suites, etc.

Preparing your home

There are many factors that affect the price you will receive for your home that you have no control over. Such things like the market conditions, state of the economy, the location, age and style of you home. The condition and cleanliness are two factors you do have control over and they do make a difference.

As you have spent time getting to know the market and looking at listings you likely have noticed quite variance on the condition of homes for sale. The condition of your home, what you present to the buyers, can affect the price you receive and how long it takes to sell.

For example, the graph shows homes that sold in 2016 in the Town of Comox (same area) which were built in the 1990’s (same age) and the price they received per sq ft (Price less land value divided by the size). Some of the difference is due to style (ranchers are in high demand) and being on a busier street, however, the condition is also a major factor.

This stage is likely where you will spend the most time and in most cases you do not need to spend a lot of money. Your place has been your home for some time and naturally you have many good memories and feeling attached to it.  Letting go can be difficult and you can start that process as you are preparing it for sale. Moving items out and creating space can help you start the process of letting go.

 


This article from Forbes outlines what could be done. Following are some of the more important items. Each home is unique and your realtor will work with you, the time and budget you have available, to help you prepare your home for sale. Think staging, you do not need to hire someone, but you can do things to show your home in the best light to get the best price.

Read More

Receiving an offer

 

One thing I like to do is to sit down with you and present a mock offer. This gives you the time to ask questions and be comfortable with the offer and terms.  I find it more comfortable to discuss the documents prior to receiving a real offer. Please note, we tend to use the word offer, which it is, it is also a legal contract (in offer form) and should not be treated lightly.

When an offer is received you have three choices. You may accepted, reject it or counter the offer. A counter offer is actually an rejection of the offer and submitting a new offer.

Obviously the main term being negotiated is the price, though dates, chattels, deposit are often points of negotiation as well.  The offer usually includes some subject to clauses for the buyer to do their due diligence.  These include subject to financing, inspection, insurance, title and Property Disclosure Statement. Usually the buyer will ask for two weeks to do this work.  If you home is a strata they might ask for longer as it will also be subject to reviewing the strata documents, which can take some time to acquire. I tend to pull these documents when doing up the listing so that we have most of them ready to go.

While negotiating if a second offer comes in then it is a multiple offer situation. Usually time will be provided to allow these offers to be modified if required by the buyer. Often the buyer's agent will request to present the offer to the seller. All offers are reviewed and the seller can accept one, counter one and advise the others that theirs is not selected, or reject them all.

While the offer is conditional (has subject to clauses), we can still show your home and occasionally we will receive a back-up offer. This type of offer is unique in that the seller also has a subject to clause, that being subject to the seller being released from the first offer. A back-up offer can strengthen your position if some items turn up in the inspection.

The Snowbird demonstration team practicing in the Comox Valley.



Early morning light reflects a tranquil scene showcasing the trademark 5th Street Bridge as it crosses over the Puntledge River in downtown Courtenay.

Of the subject clauses, the building inspection is the one that most likely may bring up some issue. It is important to be upfront and disclose things on the Property Disclosure Statement (PDS).  Used well properly the PDS can be a useful document for protecting the seller.

Other than new homes, very few are perfect. If your roof is 20 years old, disclose that.  If you have poly butylene water pipes, disclose that as well. A good inspector will discover things and disclosing them on the PDS, which is part of the offer, can help to prevent the buyer's from asking for a reduction due to things discovered in the inspection. They knew these items while negotiating so they have been taken into account. Hoping that things will not get noticed, or you will receive an offer that does not have an inspection, usually does not work well.

The PDS can also be used to disclose any material latent defects. Sellers are required to disclose all know material latent defects, in writing, prior to an offer being accepted.  "Material" means of some value to fix or unsafe or unfit. "Latent" means cannot be easily discovered.

Not all defects are material latent defects. An inspector will label a 15 year old hot water tank as a defect. This is not a material latent defect, but should be replaced. The term defect is relative to the age of the home and item. For instance, needing a new roof on a home whose roof is 20 years old is not a defect. A leaking roof, regardless of age, is a defect.



The Completion

An accepted offer with subject to clauses is a conditional offer. Once the subject clauses are removed it becomes unconditional and if the buyer or seller do not complete, then it is a breach of contract.

Usually the close (when funds are transferred and names on title change) and possession are a couple of weeks after subject removal. The close date needs to be a weekday so the title transfer can be registered with the Land Title Office and possession is usually the day after.

Your lawyer or notary will arrange the transfer of funds and title and do a statement of adjustments for things such as property taxes that have been paid or are owing, any strata fees owing and the real estate commission.

One important note, on October 3, 2016 the federal government changed the process regarding the sell of real estate and capital gains taxes. In the past you needed to report if the sell was not your primary residence. Now you are required to declare that your home was your primary residence on your income tax return to avoid having to by capital gains tax. See Reporting the sale of your home.

A lantern ski in Paradise Meadows at Mount Washington.


     About Gerry

Information and Interpretation
Selling or buying real estate is a major financial endeavour with many factors to consider. While you have a wealth of information available to you on the internet, interpreting that information is another matter.

This is where I come in. Not only do I research and provide you the information you need, I take it to the next level and analyze and interpret that  information for you. I will tell you what I think, what we do is up to you.


As a client, your Realtor works for you, and this is a principle I hold dear.  I see my job as providing you with information, interpretation, services and guidance, not to push you on a course of action.

Unparalleled Service
I have a simple code, I don't sell, I service. I assume my clients are perfectly able to make their own decision once they have the information they need. I spend my time providing information, guiding people through the process, and making sure all the bases are covered, not in high pressure sales.

Over the years I have received very complementary feedback from clients. See Client Feedback.

Integrity
Integrity, simply defined, is being honest and fair. This is further enhanced by one of a Realtor's prime duties, which is not to put anyone's interest above their clients, including their own.  This a duty I take very seriously. My personal outlook after over 30 years in business, is that whenever I experience high pressure sales I start to question the integrity of the person selling me.  Are they looking after my best interest or theirs?

Gerry Chwelos, REALTOR®

PEMBERTON HOLMES LTD.

Tel: 250-8975465

All images on this website are copyright protected. Most photos provided by Boomer Jerritt.

Copyright © Gerry Chwelos 2017