This is where your realtor can help you by providing market information regarding comparable properties and neighbourhood trends. A CMA (comparative market analysis) is time consuming thorough research conducted by your realtor which takes into account myriad data on comparable homes to yours, and then makes adjustments plus & minus for such factors as upgrades, location, & lot size etc. There are many influences involved. It is NOT just a cursory approach to value, but is in fact an in-depth evaluation by an experienced professional. The vast majority of realtors work by the same credo: “Obtain the highest dollar value for the seller, while positioning the property correctly in the marketplace”. This is often under-appreciated by the home seller unfortunately.
Over-pricing can have far-reaching negative impact, is difficult to overcome and can prove costly for everyone involved.
Here are a few of the risks in over-pricing your home:
-mainly, the property does not sell within a reasonable time.
-listing too high above the market value estimate will only frighten off genuine prospects who would have otherwise made reasonable offers. The greater the disparity between market value and listing price, the less chance of a sale within a reasonable period of time.
-difficulty in getting other salespersons and brokers enthused about the property.
-the possibility of the property remaining unsold and becoming market stale.
-the risk of becoming a ‘comparison house’ that may be actively shown, but only to sell other well-priced property.
-becomes negative advertising for the brokerage and salesperson, as the ‘for sale’ sign ages, amidst the competitor’s sold signs.
-buyers who are pre-qualified within a specific price range and who are motivated, will most likely not be shown your home.
Here is an excellent resourse on this very subject. About.Com Article
A listing agreement, as any contract, forms a partnership, in this case between the seller and the brokerage, with each having a set of responsibilities to carry out for a successful result.
Primary Responsibilities for Each Party
--The Salesperson: to expose the home to potential buyers and the REALTOR® community to attract a best price sale.
--The Seller: to price the home competitively with the salesperson’s help. This allows the marketing to gain interest from
potential buyers and other REALTORS®.
2. A Seller-centric mindset. The motivation exists but the Seller can’t see beyond his own needs and wants and is unwilling to look from a buyer’s eyes. For example, the seller wants a certain price—despite the market-- because he needs the additional money to help pay for the move-up home he’s buying.
3. Misconceptions about the value of features. The seller added a pool, for example, and wants the $25,000 installation cost and possibly more. Yet buyers may only attribute a value that represents about 30 to 40% of its cost.
4. Disparate thinking with multiple sellers. Couples selling their home, couples separating or siblings selling an estate can have contrasting degrees of motivation. The least motivated tends to dictate the price, resulting in overpricing.
5. The home is overleveraged. The seller has little or no equity due to remortgaging or buying with little down in a seller’s market. So mortgage payout penalties and selling costs are added to the list price.
6. Market testing. The seller merely wants to see what if any offer he might negotiate with no intention of acceptance or sale.
These and other motives can lead to stress and the salesperson may give in to seller pressure to advertise more. Yet misplaced motives render the best marketing efforts ineffective and costly as buyers ignore overpriced listings.
A seller can become disenchanted with the salesperson, even when the importance of a market price is emphasized, in spite of efforts to please in extra ad costs, time and resources. To the seller, no selling results are forthcoming and the partnership erodes. Often the seller relists the home with another salesperson, under the same conditions, and the stressful cycle begins again.
A good contractual partnership results in a successful sale when the parties focus on collaboration to attain shared realizable goals, with both parties carrying out their respective responsibilities
I work closely with my sellers this way, and often point out simple things they missed that are easy to change or fix, but make a significant difference upon first viewing. Think of it this way: if you were selling your car, and it's in great condition...perfect paint etc, wouldn’t you wash, polish and vacuum it for best presentation ?? Of course you would! So why would your home be any different?
Transitional Rules and Real Estate Services I’m not going to get into all the various goods and services HST covers or any for and against arguments. There have been reams of articles about the subject since introduced. This commentary focuses on Ontario’s transitional rules for the supply of goods and services that straddle July 1st, the start-up date, and specifically how they affect real estate services on transactions. What does this mean? Simply, real estate services will be subject to HST, just as they are subject to GST now. So here is a summary of how the transitional rules will apply to real estate commissions and service fees.
1. HST would generally apply to REALTORS® services to the extent--expressed as a percentage--that the services are performed before or after July 1st, 2010.
2. If 90% of a REALTOR’S® services are performed before July 1st, 2010 and the transaction closes after July 1st, the HST does not apply. However the GST at 5% does apply. Under this 90% rule, the fee for services will be taxed at the 5% GST rate only.
3. If a portion of a REALTOR’S® services are performed before July 1st and a remaining portion after July 1st, then GST only will apply to the percentage of services performed before and HST to the percentage of services performed after July 1st.
For example, REALTOR® services are performed from May 1st to July 31st with the sale of the property closing on July 31st. Let’s say 65% of the services are performed from May 1st to June 30th, while 35% of the services are performed from July 1st to July 31st. GST at 5% applies to the 65% of services performed before July 1st and HST at 13% applies to the 35% of services performed after July 1st.
In short, HST will apply to REALTOR® services for real estate transactions that straddle the July 1, 2010 start-up date where a percentage of our services has yet to be performed and constitutes more than 10% of the services. (Source: Canadian Real Estate Association)
Our objective is to save you from paying more tax than necessary. We are, however, accountable to CRA and must be ready to validate the HST charged/not charged and submitted to CRA for each transaction. Some other HST affected services on real estate transactions: Legal fees, mortgage insurance, inspections, movers, appraisals, fire and title insurance, and appliances (chattels) included in a home purchase.
Excellent video regarding home preparation for listing..
