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September 23, 2016 in Buying Toronto Real Estate, Canadian Real Estate Market, For Sale By Owner, Location, location, location, New in New Homes, Pay what you want listings, Real Estate Investments, Save on Comission Fees, Selling Toronto Real Estate, Sold Watch, Toronto MLS Listings, Toronto MLS Sales, Toronto Neighbourhoods, Toronto Real Estate Trends, Toronto Real Estate Update, What's next (in real estate) | Permalink
Toronto Real Estate - Reporting Online
Going FSBO (For Sale By Owner)
Many sellers entertain the idea of selling their home without an agent. They always have. Particularly today, with so much information online, many believe that the Internet weakened the role of the agent; that the agent’s value is not what it used to be.
However, when it comes time to sell a home, it’s common for many people to wonder if they can go at it alone and save the 5 percent commission. Going the FSBO (For Sale By Owner) route seems easy enough. By researching online, you can check out comparable sales, learn your local market, and determine a good price for your home. Take some photos with your smartphone camera, write compelling marketing copy, and make a few cosmetic enhancements if needed. When you’re ready, list your home online for buyers to find and explore. In some cases, it truly can be easy, but not for everyone. There are a few considerations and some reasons why many sellers end up going down the traditional path of being represented by a licensed real estate agent.
When the stakes are high, doubt creeps in
Selling your home isn’t like selling a used car or a flat-screen TV online. It’s just not that cut-and-dried. It’s likely a place where you’ve made memories and have some serious emotional attachments. The sale of a home generally comes at a time of life change; a new job, new baby, retirement, death or divorce. Emotionally detaching means that you may not be as objective as possible. And as a result, there could be negative financial ramifications. Putting a a third party in between you and the sale can be comforting. There are practical considerations as well. Prices can vary by block and there are a variety of elements for a homeowner to consider: the local market, pricing, disclosures and property access, among other things. When it comes time to go FSBO, a little bit of doubt may creep in. Is my timing right? Is my pricing right? Is there something I’m missing? Am I ready to sell? Sellers don’t know what they don’t know. When it comes time to go live, and expose themselves to the market, they sometimes get cold feet.
You’ll probably still pay an agent’s commission
If you go it alone, you aren’t necessarily saving 5 percent of the home’s sales price by not hiring an agent. Most likely, you’re only saving 2.5 percent. When a home is sold, the seller ordinarily pays the 5 percent commission. The seller’s agent then splits the commission with the buyer’s agent. If you want to get traffic to your listing, you need to offer that commission to the buyer’s agent to incentivize them to show your home. Additionally, few buyers feel comfortable negotiating directly with an unrepresented seller. Buyers want guidance from their agent and appreciate their feedback. If you don’t offer that buyer’s side commission you risk losing eyeballs and therefore market share. If you lose a large chunk of the market, you risk not getting top dollar.
It becomes a part-time job
Selling a home takes an immense amount of preparation time, not to mention the time and energy to show the home once it’s listed for sale. You’ll have to field calls, emails and questions from buyers and agents. Plus you’ll need to be prepared to show it at a moment’s notice. It could easily begin to feel as if you’ve taken on a part-time job. And, not everyone is cut out for the additional workload and stress. In many cases, you’ll be doing all this while also focusing on where you’re moving. Are you selling in order to move to another city or town, or because of a change in your career or life? Any of those situations can be stressful enough on their own. When you add selling your own home to your plate, it can quickly be overwhelming.
There are certain people that can absolutely do it. It’s been done successfully over and over through the years. If you’re convinced that you can overcome the doubts and fears associated with being unrepresented, have the time and energy to make it happen, then give it a shot. Start by doing your homework, going to open houses and learning as much as you can about how your market works. Be prepared to set aside a good chunk of time for the months before and during the sale. Search and research as much as possible, not only local listings but how to best present your home to the market. Because you don’t sell homes for a living, you could be caught off-guard or overlook something important.
Once you go “live,” the days on market (DOM) starts to tick. That number of days is the buyer’s way of knowing how your home fares in the market. If the DOM approaches 90 and you are still active, buyers will see it and know it. If you are unsuccessful and end up listing it the traditional way, that buyer will know about the previous attempt to sell FSBO. They may use it against you when making their offer. So put your best foot forward. If you’re not there yet, don’t go FSBO. Take the time you need to and reevaluate your plans. The last thing you want to do is rush into the market when you’re not ready.
Back to Basics In Real Estate
To succeed in this real estate market, investors and managers need a new kind of toolbox. While financial implements are still critical, more traditional tools of the trade, a hammer, paintbrush and the number of a good plumber, for example, have joined them.
As the industry experiences one of the worst downturns in decades, real estate investors and managers are reconsidering strategies for success. Many of them have embraced a back-to-basics approach that provides a path for staying strong in a difficult economy. A key part of that approach: actively maintaining their properties.
Gone are the days when making a profit in real estate involved a financial transaction and little else. Now, in an effort to remain viable, real estate professionals are focusing on 1) protecting and enhancing the value of their assets; 2) adapting to a changed investment climate; and 3) reallocating precious resources.
And despite the rough sledding, there is a good likelihood that these strategies, taken together, will yield success. To be sure, a meaningful recovery is not imminent. But there is a growing list of companies lining up to take advantage of the recovery when it occurs, giving perhaps the first indication that a slow turnaround may be beginning, at least in some sectors.
Realtors win a green concession
Ontario eases home energy audit requirement
Ontario Energy Minister George Smitherman has backed down from a plan to require energy audits each time a house is sold. A new amendment to the province's Green Energy Act will allow home buyers to waive their right to the $300 audit, as long as they do so in writing.
The change will provide more flexibility in cases where the buyer intends to knock down the property or do major renovations, Smitherman said. But he said he's not anticipating that many buyers will opt out of an audit.
"I rather suspect as people are making the most important investment of their life, they're going to find that to be very valuable and important information," he said. "But we could see some scenarios where the home at question really isn't worthy of an audit, if you will."
Ontario realtors have complained the additional costs would hurt homeowners in what are increasingly difficult economic times. The Liberal government is backing off from the audits because it's afraid of the public backlash, said interim Progressive Conservative Leader Bob Runciman.
Many homebuyers will also be hit with additional costs when the province merges its eight per cent sales tax with the five per cent federal GST, he said. "They know that this is a problem for them and they have to back away, and this is one area where they can make some adjustment," he said.
The legislation will also be amended so residents will have an easier time objecting to wind turbine projects near their homes.
Realtors fight sales tax harmonization
Ontario's Realtors say the McGuinty governments plan to harmonize the GST and PST will add over $2,000 to the cost of a real estate transaction, hurting the resale home market and prolonging the housing industry's recovery from the current economic downturn.
"Now is not the time to be erecting barriers to homeownership," said Pauline Aunger, President of the Ontario Real Estate Association. "We need consumers to invest in housing to help get our economy going again."
According to the Canadian Real Estate Association, home sales in the province of Ontario were down 29 per cent in February, compared to 2008.
Under a harmonized sales tax (HST: 13%), home buyers and sellers will have to pay extra tax on a range of services associated with real estate transactions such as legal fees, moving costs, real estate commissions and home inspection fees. Currently, consumers only pay the 5% Goods and Services Tax on these services.
"These additional taxes could price some homebuyers, especially first-time homebuyers, right out of the market," explained Mrs. Aunger. "Harmonizing will not help homebuyers in any way."
For a resale house priced at $360,000, a HST could add over two thousand dollars in new taxes to closing costs. In total, a HST will add $313 million annually in new taxes to resale home transactions.
"In the last decade, Ontario's homeowners have faced a barrage of new costs," said Aunger. "From municipal land transfer taxes to sky rocketing property taxes, homeowners are being pushed to the brink to accommodate increasing demands from government. A harmonized sales tax is yet another cash grab on Ontario's already overtaxed homeowners."
The Ontario Real Estate Association represents 47,000 brokers and salespeople who are members of the 42 real estate boards throughout the province. Members of the association may use the Realtor trademark.
Energy efficiency law hits homesellers
Mandatory energy audits on home sales wrong, Toronto's
real estate agents say.
In the wake of a new municipal land-transfer tax and unmoored by a sinking economy, Toronto real estate agents are bracing for a new storm on the legislative horizon: Mandatory energy audits for home sales.
Ontario Minister of Energy and Infrastructure George Smitherman's proposed Green Energy Act, which was introduced to the Ontario legislature Monday, contains loosely defined "mandatory conservation and energy efficiency practices" that would cost home sellers about $300.
But with homes lingering on a stagnating market, and average sale prices dropping throughout the GTA, even the distant possibility of one more fee or one more bureaucratic obstacle, leaves real estate agents feeling seasick.
"It's not so much the dollars that it costs you to do the audit, I think you have to think long-term in terms of how will that impact your property value, what will that do to the market in terms of potential bottlenecks," said Von Palmer, spokesman for the Toronto Real Estate Board. "So the devil's always in the details and I think that's where we need to be careful."
Home sellers face $300 'green' audit
Ontatio's clean-energy bill would raise hydro rates and promote alternative power
Ontario residents won't be able to sell their houses or condos without first getting a home energy audit – which now costs about $300 – under the proposed new Green Energy Act. That's one of several measures in the legislation unveiled by Energy Minister George Smitherman to boost incentives for electricity conservation and encourage renewable sources of energy.
Critics fear the energy audits and Smitherman's estimated 1 per cent rise in household electricity bills as a result of the law will pinch pocketbooks as the recession deepens. "It'll be used to beat down the seller of a home," Progressive Conservative MPP and energy critic John Yakabuski warned of the audit, which would put detailed information on a home's energy efficiency into the hands of buyers.
Toronto homeowners are already concerned about the impact the city's new land transfer tax – in addition to the provincial one – is having on sales and prices. Both taxes add up to thousands of dollars even on cheaper houses.
While homeowners will have to get a private contractor to do an energy audit before selling, there will be no requirement to take any action – the measure is simply intended to inform potential buyers what state of energy efficiency a property is in so they can take action if desired.
The Price is Righteous
Setting an equitable yet compelling price is key to a successful sale. But its tough. Buyers are usually well informed about recent events in the marketplace. They select homes by comparison shopping and are keenly aware of subtle differences in features and value. In their eyes, your price must be justified in comparison to other available homes.
Obtaining the best return for your property requires competitive pricing from day-one. A home should be priced according to recent market data comparisons.
There are a number of factors that influence the value of your property:
- Prior Sales
- Market Conditions
Competitive Market Analysis
Taking these factors into account, we will prepare a competitive market analysis to reflect the current market value of your property. It includes an examination of your property as well as a study of competitive properties currently on the market and those that have recently sold. This information helps you to properly position your property.
No Realtor can control market value. The selection of a listing agent should be based on their service, fees and reputation, not on their estimate of market value. It is the 'invisible hand' of the market that determines the sale price you will ultimately achieve.
Competitive Pricing vs. Overpricing
First impressions are lasting. A house realistically priced and properly presented from day-one offers the best opportunity for you to sell quickly and obtain the best price.
Qualified buyers and their agents have been looking in your area and waiting for a suitable house at an appropriate price to come on the market. If reasonably priced, it is possible your property will sell quickly to waiting buyers.
Competitively priced properties encourage reasonable offers, pleasant negotiations and a smooth closing.
Overpricing costs in terms of money, disappointment, and missed opportunities. If the price is too high , buyers may not even look at an otherwise attractive property.
An overpriced property can go stale after the important first few weeks when the home is new on the market and getting the most exposure. Then, when the price is adjusted at a later time, the house is often overlooked.
If you were able to arrange a sale for substantially more than comparable properties it may fail to close through difficulty securing an appraisal and mortgage financing.
The Paradox of Price: When the 'price is right' buyers get involved quickly and sellers gain a competitive advantage. Use the paradox of price to your benefit. If you have the will to set a compelling price, the reaction of the marketplace will amaze you.
Improving Your Home's Curb Appeal
Home Selling Advice to Help You Attract Potential Buyers
A large percentage of home buyers decide whether or not to look inside a house or take it seriously based on its curb appeal—the view they see when they drive by or arrive for a showing. You can help make sure they want to come inside your house by spending some time working on the its exterior appearance. It's difficult to look at our own house in the same way that potential home buyers do, because when we become accustomed to the way something looks and functions, we can't see its faults. Decide right now to stop thinking of the property as a home. It's a house—a commodity you want to sell for the highest dollar possible.
Curb Appeal Exercise
The next time you come home, stop across the street or far enough down the driveway to get a good view of the house and its surroundings.
- What is your first impression of the house and yard area?
- What are the best exterior features of the house or lot? How can you enhance them?
- What are the worst exterior features of the house or lot? How can you minimize or improve them?
Park where a potential buyer would and walk towards the house, looking around you as if it were your first visit. Is the approach clean and tidy? What could you do to make it more attractive?
Take photos of the home's exterior. If you have a digital camera, view the color versions first, then remove the color and look at it in black and white, because it's easier to see problems when color isn't around to affect our senses.
Make a list of the problem areas you discovered. Tackle clean up and repair chores first, then put some time into projects that make the grounds more attractive.
- Kill mold and mildew on the house, sidewalks, roof, or driveway.
- Stow away unnecessary garden implements and tools.
- Clean windows and gutters.
- Pressure wash dirty siding and dingy decks.
- Edge sidewalks and remove vegetation growing between concrete or bricks.
- Mow the lawn. Get rid of weeds.
- Rake and dispose of leaves, even if your lot is wooded.
- Trim tree limbs that are near or touching the home's roof.
Don't Forget the Rear View
Buyers doing a drive by will try their best to see your back yard. If it's visible from another street or from someone's driveway, include it in your curb appeal efforts.
Evening Curb Appeal
Do your curb appeal exercise again at dusk, because it isn't unusual for potential buyers to drive by houses in the evening.
One quick way to improve evening curb appeal is with lighting:
- String low voltage lighting along your driveway, sidewalks, and near important landscaping elements.
- Add a decorative street lamp or an attractive light fixture to a front porch.
- Make sure lighting that's visible through front doors and windows enhances the home's appearance.
There are times that adding elements to your landscaping can improve curb appeal, but there are other times when removing something is even more effective.
For example, we had a listing for a large brick house with large white columns. Tall evergreens, planted in front of each column, had grown taller than the roof. They obscured the columns and windows and made it difficult to see the front of the house.
We suggested that the owner remove them. She trimmed them back, but it didn't do the trick—they were unattractive and still kept potential buyers from seeing the true character of the house.
I sold the house to a couple who could see past the trees. One of their first tasks after closing was to yank them out of the ground, instantly boosting the home's curb appeal.
Most buyers cannot visualize changes, and often won't take a second look at a house if the first look doesn't appeal to them. Home buyers who can visualize changes, and are prepared to make them, expect you to reduce the price of the house to compensate for the work they plan to do.
A Few Curb Appeal Tips
- If you can budget it, a fresh paint job does wonders for a dingy house. Drive around your town to find color schemes that are appealing.
- Install a more attractive front door, maybe something with leaded glass inserts.
- If you can't justify the cost of a new door, consider replacing plain doorknob hardware with something more attractive.
- If new hardware is beyond your budget, repaint or stain the door and polish the hardware?
If you brainstorm, you'll find that there's a solution to most problems—one that lets you stay within your budget. The trick is to find the areas where improvements are needed, then work on them as best you can.