5 Big Mistakes Sellers Make And How to Avoid Them

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Difference Between a Real Estate Agent & REALTOR®?

“REALTOR®” and “real estate agent” are not interchangeable, although some real estate agents might like them to be. The term REALTOR® is a registered certification mark that identifies the quality of services rendered by licensed real estate agents who are members of The Canadian Real Estate Association (CREA). All real estate agents are not REALTORS®, but all REALTOR® members are real estate agents. REALTOR® members are committed to a strict code of ethics known as the REALTOR® Code, and are the only ones who have the right to list your property on the MLS® Systems of their local real estate boards. To correctly be referred to as a REALTOR®, a real estate agent must be a member of CREA.

What makes me different from your traditional Real Estate Agent & REALTOR®?

 

10 questions to ask when hiring a REALTOR®

Home owners should interview a few potential REALTORS® before deciding on one to sell their home. Here are some smart questions to ask: 

  1. How long have you been in the business? A freshly-licensed REALTOR® can do a wonderful job and will have up-to-date training; those in the business longer bring more practical experience to the table.
  2. What is your average list-to-sales-price ratio? A listing REALTOR® should hold a track record for negotiating sales prices that are very close to list prices.
  3. How will your marketing plan meet my needs? Specifically, how will you sell my home? Where and how often do you advertise? Will you show me a sample flier? How do you market online?
  4. Will you provide references? Ask if any of the references are related to the REALTOR®. Ask if you can call their references with additional questions.
  5. What separates you from your competition? Key phrases to listen for: assertive, available by phone or e-mail, analytical, able to maintain a good sense of humour under trying circumstances.
  6. May I review documents that I will be asked to sign? A good REALTOR® makes forms available to you before you are required to sign them. Ask to see agency disclosure, listing agreement, seller disclosure.
  7. Can you help me find other professionals? Your REALTOR® may be able to provide a list of service providers who can help with things such as home inspection, staging, renovations, legal and financial advice. Get an explanation if you see the term “affiliated”. It could mean the REALTOR® is getting compensation from vendors.
  8. How much do you charge? Real estate fees or commission are negotiable and may vary from broker to broker. Always make sure you negotiate your best deal with your REALTOR®.
  9. What if I’m unhappy with the service? If you sign a listing agreement with the REALTOR® and later find that you are unhappy with the arrangement, will the REALTOR® let you cancel the agreement?
  10. What haven’t I asked you that I need to know? Pay close attention to how the REALTOR® answers this question, because there is always something you need to know – always.

Q: Why should I hire a REALTOR®?

You’re trusting a REALTOR® with your most valuable possession, your home. REALTORS® take this responsibility very seriously. Here’s what we promise you:

  1. Your REALTOR® is a trained professional

    REALTORS® take extensive pre-licensing courses in order to obtain credentials for practicing in real estate.

  2. Your REALTOR® is continuously trained

    REALTORS® keep pace with the times by taking continuing education courses to upgrade their knowledge on a broad range of real estate related issues in order to be able to continue to provide consumers with current advice.

  3. Your REALTOR® does everything by the book

    A REALTOR® must be registered under provincial laws that govern exactly how real estate can and cannot be traded. These regulations are your legal guarantee of professional behavior.

  4. Your REALTOR® is an ethical businessperson

    REALTORS® must adhere to the extensive Code of Ethics of the Canadian Real Estate Association. Several provinces have additional codes of ethics governing real estate professionals. Your interests must always be put first.

  5. Opportunity for recourse

    Should you have concerns about the professional behavior of a REALTOR®, provincial regulators and your local real estate board or association take these matters very seriously and work quickly to resolve any issues.

  6. Your REALTOR® has access to a local Board’s MLS® System

    A Board’s MLS® system is the single most powerful tool for buying and selling a home. Your REALTOR® can provide you with exclusive features of the Board’s MLS® System, such as immediate notification when new properties are listed. You don’t have to wait for it to be posted on a web site.

    What makes me different from your traditional Real Estate Agent & REALTOR®?

Advice For Home Sellers

1. Choosing a REALTOR®

Selling your home isn’t a simple procedure. It involves large sums of money, stringent legal requirements and the potential for costly mistakes. A REALTOR® will spend the time it takes to help you sell your home in the least amount of time and for the best possible price.

Here is what some of my past clients have had to say about the value I deliver: http://vanhomesales.com/testimonials/

2. The Listing Agreement

A Listing Agreement is a contract between you and your agent’s brokerage company. It provides a framework for subsequent forms and negotiations. It’s important the agreement accurately reflects your property details and clearly spells out the rights and obligations of all parties.

Generally, in the agreement you appoint the brokerage company as your agent and give its representatives the authority to find a purchaser for your home. The Listing Agreement will outline:

  • The duration of the agreement;
  • Your REALTOR’s® compensation
  • The listing price and an accurate description of the property;
  • Financial conditions of the property, including the mortgage balance, mortgage monthly payments and the mortgage due date;
  • Information about annual property taxes; and
  • Any easements, rights of way, liens or charges against the property.

Disclosure

Ask your listing REALTOR® about disclosure, which is a seller’s obligation to disclose facts about properties for sale. The buyers will need to know material facts about the property; that is, anything that could materially affect the sale price or influence a buyer’s decision to buy it. A major cause of post-sale disputes and lawsuits relate to defects and disclosure, but most disputes can be avoided if proper disclosures are made. Intentionally withholding information about a property when selling it can have serious legal consequences.

3. Setting Your Price

How much should you ask for? Although you may have an idea of how much your house is worth, it’s important to have your home valued on its own merits by a professional. Be careful not to price your property too high or too low. If it’s too high, there’s no sale; too low and you lose on your investment.

A REALTOR® has the information and expertise to assess at what prices similar properties in your area have sold, and may be able to help you in this regard. She can also provide information on market history, such as the number of properties sold in your community the previous month or year.

4. Listing and Marketing Your Property

If your listing is an MLS® listing, your REALTOR® will place your listing on a real estate board’s MLS® System. Through the board’s MLS® System, all other REALTORS® that are members of that board can find and view information about your property, and all have the opportunity to sell your property. Your property gains more exposure, because it reaches the majority of the real estate professionals in your community. And through REALTOR.ca, the national property website that gets more than a million unique visitors per month, your property is advertised to potential buyers across Canada and around the world.

Open Houses

Your REALTOR® may recommend an open house. There are two types. First is an agent’s open house, where sales representatives from the listing company will be invited to view your house. Each of these REALTORS® may have a prospective buyer.

The second type of is a public open house, where members of the public are invited to walk view your home. It’s an efficient way to show your home to many potential buyers at once. Your agent will act as host, answering any questions.

5. Waiting For the Right Opportunity

Sometimes a home doesn’t sell right away. Avoid the urge to pull your home off the market. Be persistent! Generally, there are three reasons why a home may not sell as fast as others: location; condition; and asking price.

Obviously, you can’t change your home’s location. However, you can improve the condition of your home and you can, of course, adjust your price. Throughout the listing process, you need to be constantly comparing your asking price against those of similar properties in your area. Review your selling strategy regularly with your listing agent, who may help you answer the following questions:

  • Is your house being shown regularly?
  • Are you receiving the feedback from prospective buyers?
  • Are you in touch with the marketplace?
  • Is your property competing well? If not, what else can you do?

6. Accepting an Offer

Once a buyer is found, you’ll receive an offer that will:

  • Detail the buyer’s price
  • Specify any conditions that may apply or be attached
  • State desired date of possession
  • The date the offer expires

As an act of good faith, the buyer will make a deposit with the offer. You don’t have to accept the offer as is. You may wish to make a counter offer that meets the original offer partway. The counter offer is one more step along the way to negotiating the final terms and conditions of the sale.

The offer, once signed by everyone, is a binding contract. Make sure you understand and agree to all of the terms in the document. Before signing, you may want your lawyer to review it. Your lawyer should also ensure that you receive compensation for prepaid expenses such as, property taxes, electrical or gas bills, or if applicable, any heating oil left in your tank.

After these are paid, you will receive any money you have coming from the sale.

Other Possible Requirements

Before closing, if the buyer insists upon any conditions of sale, you may be asked to provide a number of things.

  • A current survey, or a “real property report,” showing that the house sits on the property that you own; that is, that there aren’t any encroachments onto other properties.
  • Title to the property (the buyer’s lawyer will check this out when he or she conducts a title search to see if there are any liens on the property, easements, rights of way or height restrictions)
  • Especially in rural areas, a certificate for a well or septic system, stating the system meets local standards
  • Access to the property by a qualified engineer or inspector

For more information and to learn more about my Home Selling Marketing Plan, please contact: Gino Pezzani

 

Can You Sell Your home By Email?

The New Brunswick Court of Appeal recently considered whether an exchange of emails between a prospective buyer and seller of residential property constituted a binding contract.1The property was listed for sale on Kijiji. After an initial phone call, the buyer and seller negotiated a sale by email. The seller emailed the buyer offering to sell the property for $160,000, providing the buyer assumed the mortgage and paid her legal fees. The buyer emailed agreeing to assume the mortgage, pay the seller’s legal fees and offer $155,000. The buyer also emailed asking if his wife could view the property. The seller emailed back advising the buyer that she would accept his offer. The buyer’s next email suggested he have a purchase and sales agreement drafted and proposed a closing date. Three hours later the seller emailed the buyer advising that after speaking with her partner, she was not prepared to sell the property. The seller was the sole owner of the property.The buyer sought a judicial determination that the email exchange resulted in a binding agreement. The buyer argued that the email exchange constituted a written agreement, contained all the essential contract terms, satisfied the definition of electronic signature under New Brunswick’s Electronic Transactions Act2 (NB ETA), and therefore satisfied that provisions under that province’s Statute of Frauds3 which, like BC’s Law & Equity Act4, provide that no contract for the sale of land is enforceable unless the agreement is in writing and signed by the party charged.

While the case concerned New Brunswick legislation, BC’s legislation is substantially the same.5 The BC Electronic Transactions Act6, like the NB ETA, provides that contracts for the sale of land may be entered into electronically providing the parties agree, and providing the other common law requirements for contract formation are satisfied. Both Acts provide that the legal requirement for a signature is satisfied with an electronic signature and define electronic signature similarly, as information in electronic form that a person has created or adopted in order to sign a document and that is in, attached to or associated with the document.

While the lower court found a binding agreement, the Court of Appeal held otherwise. The higher Court acknowledged that the emails satisfied the written requirement of the Statute of Frauds and commented, without making any conclusion in this case, that it was possible that the method of the seller identifying herself in the emails could satisfy the definition of electronic signature under the NB ETA, and thus the requirements of the Statute of Frauds.

The Court also acknowledged that the email exchange contained the essential elements for a contract: parties, price, property. However, applying the objective standard of the “reasonable bystander”, the Court concluded that the parties lacked the requisite intention to contract, a criterion for contract formation. In reaching its conclusion, the Court considered the fact that neither the buyer nor his wife had viewed the property, the buyer’s reference to a future draft agreement, and the fact that the buyer was unaware of the terms of assuming the mortgage.

The following passage illustrates the Court’s concern with finding enforceable contracts by informal electronic communications, particularly in transactions involving the sale of residential property:

“The notion that a person can sift through a series of emails, identify the 3 P’s, find a signature that satisfies the Electronic Transactions Act and, correlatively, the Statute of Frauds, and then have the court fill in any necessary contractual terms is simply out of step with reasonable expectations of today’s typical consumer. There are still instances where formalities count. The purchase of a home is one of them.”7

The decision is encouraging as the Court recognized that the sale of real property is a sophisticated process, where formality is required and consequently, the expertise of licensees.

Jennifer A. Clee
B.A., LL.B.

1.Druit v. Girouard 2012 NBCA 40.
2.R.S.N.B. 2011, c. 145.
3.R.S.N.B. 1973, c. S-14.
4.R.S.B.C. 1996, c. 253, s. 59.
5.See also Legally Speaking 450: Electronic Signatures (http://www.bcrea.bc.ca/news-and-publications/publications/legally-speaking/legally-speaking—november-2011-(450))
6.S.B.C. 2001, c. 10.
7.Supra, footnote 1, page 3.