Private Sale by Owner Blog, Canada

Pricing your home:

Like anything else, what is the price of the house? Typical question in everyone’s mind. Your home’s asking price is one of the first pieces of information that buyers will want to know about your property. Price it too high and you’ll scare them away. If it’s too low you risk losing money. In order to price your home correctly, you’ll have to know your local real estate market. Doing so will allow you to set an asking price that will compete favorably against other comparable homes. But don’t worry; it’s easy to do if you just follow these simple steps:

1. Know the Competition: Visit Local MLS website and drive through your local area to search for homes for sale that are similar to yours in size, number of bedrooms & bathrooms, lot size and square footage. Educate yourself about their asking prices and, especially for condos, calculate the price per square foot.

2. Visit Open Houses: Now that you know what’s on the market, visit as many open houses as you can in order to find out how your home compares to others. Your goal is to learn as much about those homes as possible, such as upgrades and renovations to the kitchen, bathrooms and bedrooms. Prepare a list of questions and ask the seller and agent. Get an idea how he or agent handles them. This will bring confidence in you that if he can do it, why I can’t sell my own house.

3. Learn About Recently Sold Properties: Your next step in educating yourself about the local market is learning how much homes have sold for in the recent pa Home sale information is public information and can be found a number of ways. Your county clerk’s office and/or local town hall can provide you with this data, but the Internet has made the task even easier.

4. Get a Starting Point: For a simple, cost-effective way to get a ballpark range of how much your home is worth, consider our Comparative Market Analysis, with our          Full Serve plus package. The CMA will also provide you with a list of nearby recently sold properties and all the required information of your neighborhood.

5. Evaluate Your Research: Now that you have information about homes currently on the market, data on recently sold properties and a price range, you have all the data you need to compare your home to others in your neighborhood and local area. Evaluate the information you have learned and ask yourself how your home stacks up with the others. Be honest. What condition is it in and how does in compare in location, features and aspects like a remodeled master bathroom?  We can also guide you setting up price with full serve packages to stay competitive in the market.

6. Be Realistic: One of the biggest mistakes sellers are doing in today’s market is over pricing their home.  The homes that are selling today are those that are priced competitively to other homes are on the market, providing buyers with the sense that they are getting “a good deal.”

7. Take Advantage of Being “Private Sale By Owner”: Owners of homes being sold through a real estate agent will have to fork over expensive commission fees equal to 5-6% of their home’s sale price (or $21,000 plus G.S.T) for a $400,000 home. Or, in other words, the seller of that $400,000 home will only “pocket” $379,000. As a smart “for sale by owner” home seller, you won’t have that expense and — depending on how quickly you want to sell — you have the unique ability to price your home anywhere in that $379,000-$400,000 range and still come out ahead financially compared to sellers of similar homes. You’ll also be able to get more buyers as well because they’ll be attracted to your home’s asking price.

8. Set the Price: You now have a complete picture of your real estate marketplace. Set the price using all the information you’ve learned through the above steps.

Congratulations! You have reached a major milestone in your home selling process. Not only have you arrived at an asking price, you have become an expert in your local real estate market. Prospective buyers will be impressed with your sense of knowledge and honest assessment of your home’s value, and you’ll be able to communicate about its strengths and weaknesses as compared to other homes in your neighborhood, town and area.

As housing prices stop increasing it is more important than ever to sell privately and keep your hard earned money for yourself.

Real estate prices are dropping in most major markets of Canada.

You purchased your home 2007for $400,000.
You paid Land Transfer Tax and Legal Fees when you bought: approximate costs $4,000
Your house has increased 5% since 2006. Your home is now worth $420,000
You sell you home with an agent for $420,000 and pay 5% commission + GST: $22,050 in Commission + GST
You pay legal fees when you sell your home: Approximate cost $1,500

So you purchased your home in 2007 for $400,000 and how much money did you make?

If you use an agent to sell your home, you will have lost $7,550

If you sold the same home without an agent and paid no commission you would have made $14,500.

The very first step after deciding to buy a home needs to be a mortgage pre-approval. No matter how much you think you can afford, you need to seek out professional services to analyze your financial position in order to get confirmation from a financial institution on the exact amount that you can get approved for a mortgage. With your mortgage pre approval in hand, you now know what you can afford so you don’t waste any time (yours or the buyer’s time) looking at houses outside of your price range.

You are not locked into a mortgage if you can’t find anything suitable but you are locked into the rate mentioned in the pre approval letter. By being locked into a rate, you are protected if interest rates rise during the process of looking for your next home and you are free to seek a new pre approval if rates drop.

When you do find the home that you are looking for you may have increased bargaining power during negotiation or at the very least instill confidence in the buyer that you have already been approved for the price of the property and any conditions in the offer placed on financing should be waived with ease. You will also be able to act swiftly with out hesitation or doubt upon finding the home that suits you preventing other buyers from scooping it up while you are trying to make an appointment with your mortgage broker to see if you can afford it.

It is important to know your limits and buying a home is no exception. Looking for homes with out a pre approval can be frustrating, time consuming and might not produce any results. A pre approval will make the house hunting experience much more focused and pleasurable. 

Whether you are looking to move up, scale down or buying for the first time choosing who or where you obtain a mortgage from could save you thousands.

The major difference between a Mortgage broker and your Mortgage specialist at your local bank it that a Broker has several companies competing for your business. Although the right person at a bank can sometimes have more authority to offer lower rates a Mortgage broker will be shopping your information around to different lending institutions trying to find you the best rate. In most scenarios a mortgage broker has more flexibility in obtaining low rates as well as offering a larger variety of lenders if your application has complications like poor credit, no credit, or self employed.

How much can you save?

Example: A $300,000 mortgage amortized over 25 years at 5.25% compared to the same mortgage at 5.50%.

At 5.50% your monthly payments would be $1831.18 with a total obligation of $77,432.92 for the 5 year term.

At 5.25% your monthly payments would be $1787.86 with a total obligation of $73,819.32
for the 5 year term.

For a difference of $43.32 a month and $3613.60 over 5 years.

As you can see even a difference of .25% in rates can save you thousands over a five year term. Often this is the difference between a Mortgage broker and a your current bank however regardless of who offers you a mortgage your payments can be deducted electronically from any bank account from any institution providing the same convenience that your bank might make you believe that only they can offer you.

Another important note is that your local bank will conduct a “hard hit” viewing your credit report and it will show up on your credit history as an application for a mortgage. A mortgage broker will create an anonymous profile based on your financial information and a “soft hit” checking your credit score only to attach to your file which will be then sent to potential lenders using only a number system for the lending institution to decide if they would offer you a mortgage and at what rate. For example, if you are shopping for the best rate and you go to 3 banks and them, all does a credit check, by the time you get to the 4th bank for a quote, you could have a flag on your credit and have difficulties getting a mortgage!