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Shirley Won

Saturday, March 09, 2002

Selling your home is easy in a hot market, but getting top dollar is another challenge. Consider these strategies before putting up the "for sale" sign.
Prepare your home for sale.

A detailed preparation of your home can be worth thousands of dollars, according to Toronto real estate agent William Wallace of Re/Max Unique Inc. He says painting -- everything from basement floors to hallways -- yields one of the highest returns for the dollar.

Make rooms and closets appear larger by putting some furniture or clothes in storage elsewhere. Reduce clutter by clearing away items on bathroom vanities and kitchen counters, and have your windows cleaned. "Homes that are bright and light sell for more money," he says. If you have nice landscaping but are selling in winter, leave photos around that show off your garden. "You are trying to communicate to the buyer that this is a spacious, lovely, tidy, move-in condition home," he says.
Price homes realistically
and create bidding wars.

Interview agents to find how they how would market your house. (A few will even host catered luncheons at the agent's open house to get more colleagues through your door.) Most sales occur from showings by agents with serious buyers, while weekend public open houses tend to attract nosy neighbours and are often a way for many agents to find potential clients, Mr. Wallace says.

Sellers should ask agents about recent sales to see how well they did relative to the original list price, and ask at what level they would price your home. The price should be comparable with homes that are similar in size and renovation in your area. Be wary of agents who suggest an unusually high price because they may do so just to get your listing.

On the other hand, some buyers may insist on selling at a high price. If the house then doesn't sell in a hot market, the seller could end up with a "stale listing" followed by price reductions, Mr. Wallace warns.

Sellers in hot neighbourhoods might get a higher-than-expected amount by listing at an attractive price, and having showings for three to five days before accepting offers. Doing this over a weekend tends to attract more potential buyers, he argues. "The difference between two offers and getting five offers might be the difference between getting $15,000 over list, and $40,000 over list."
Negotiate your sales commission.

Commission structures, which vary across Canada, are more negotiable in a hot market and dickering should be done before signing a listing agreement, says Toronto real estate lawyer Alan Silverstein.

"There is no rule, no law or bylaw that says it has to be 5 or 6 per cent, or whatever." Sellers must pay goods and services tax on top of the commission, but there is nothing that prevents them from trying to negotiate a structure that includes the GST, he adds.

Mr. Silverstein says listing agents may "adjust" commissions if they do more than one transaction -- such as selling your home and helping you buy another one, or acting as a "dual agent" in getting the buyer.

An agent, he says, might reduce the commission to 4.5 per cent from 5 for a transaction. (The listing agent might take 2 per cent while 2.5 per cent goes to the buyer's agent.) "Is an agent going to blow a deal to get a listing over half a percentage point if [a house] is going to sell within a week or 10 days?"
A tale of four cities
Average resale home prices

        Toronto     Vancouver   Calgary     Montreal1991    $234,313    $221,874    $128,255    $114,379


1992     214,971     245,260     129,506     113,688


1993     206,490     279,758     133,998     114,293


1994     208,922     303,535     133,571     113,712


1995     203,028     307,747     132,114     109,929


1996     198,150     288,268     134,643     108,020


1997     211,307     287,094     143,305     112,362


1998     216,815     278,659     157,353     115,573


1999     228,372     281,163     166,110     119,689


2000     243,249     295,978     176,305     125,333


2001     251,508     285,910     182,090     128,851

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