This may be the first time you’ve ever sold a real estate property, or it may have been some time since you’ve been involved in a real estate transaction. Here’s a quick refresher on some of the real estate specific terms you’ll want to know.

Real Estate Brokers and Real Estate Agents

Listing agreements are made between real estate brokers and you, the seller. A real estate agent works for the licensed real estate broker. The commission for the sale of your home will be paid to the real estate broker. The real estate broker will pay a split of that commission to the seller and buyer agents where applicable.

The Multiple Listing Service (MLS)

The Multiple Listing Service is a proprietary database of all properties currently under an active listing contract in each area.

All active agents and brokers who belong to this MLS will have access to information about your property listing. Buyer’s agents searching for a new home for their clients will learn about your property listing through this online database.

Real Estate Portals

Real estate portals websites like Zillow and Realtor.com are data aggregators on listing information. The marketing information on your listing will be syndicated to real estate listing portals in order to draw in the largest possible market of interested buyers.

Appraisal

Before you signed your listing contract with us, we offered you a competitive market analysis of your home’s value. We will set the final asking price on your property based on this market value estimate. This valuation helps assure the lender that they would own a marketable property if the buyer should default on their mortgage. The buyer will pay for the house appraisal, but you should know that it may be different than the market analysis that I provided you.

Inspection

In addition to an official appraisal, most interested buyers will request a home inspection before final sale. The goal of a home inspection is to give the buyer an objective, independent and comprehensive analysis of the physical condition of your property and check for any safety issues that might otherwise be unknowable.

A professional inspector will check on the structure, construction, and mechanical systems of the house.

Showing Appointments

When an interested buyer is scheduled to see your property, it’s best if you, your family and any pets you may own are not in the property. We work with you and the other real estate professionals who will be showing your home to schedule and supervise listing appointments. These home showings will most likely be an inconvenience for you and your family. I will do everything I can to work with you to minimize the impact, but an aggressive showing schedule will help us sell your property quickly, which is our ultimate goal.

We are saying that price per square foot has no bearing on the value of a home. Let's say that there are a bunch of houses in a neighbourhood, and they have exactly the same floor plan, you pick one of these houses and it’s very similar to many in your neighbourhood. 

But what if one person puts in laminate kitchen counters and another puts in granite? What if one adds on an amazing screened in back porch and the home next door doesnt have a porch or it isn’t fenced or landscaped or they sit on a quarter of the size of land? Are you going to say that the price per square foot is going to be exactly the same? Of course not! It’s not the same, because the one house had many more upgrades, it had many more features, it had a lot more outdoor living space, which is not included in the square footage of a house. 

So if someone is valuing a house purely based on price per square foot, call them out! This is a lazy way of deciding an accurate value on a house. What we really need to do is to evaluate the price of the house - is find the value of a house. Granted, everyone's opinion of a house is just that, an opinion. Even if you get an appraisal done on your house, that is still just one person’s opinion, so you might want to take it with a grain of salt. But if you have several SOLD comparables in your neighbourhood, we can look at them and get a price range. We also want to look into the market stats of the area - how is the market doing? Is it a sellers or a buyers market? Then we can make adjustments from comparables, did one have a three car garage and the other a 2 car? A garage is not counted as living space, so it will not be counted in the square footage. But wouldn’t you pay extra for a three car garage? In conclusion, there is many factors that goes into appraising a property, and it is not something you can just mash out in a few minutes. 

Buyer’s Market

Means there are more homes on the market than there are buyers. In this type of market, buyers will spend more time looking for homes. There are more homes on the market, giving the small number of potential buyers more to choose from. The prices of homes can be stable or perhaps dropping. Sellers will find that buyers have stronger leverage when negotiating.

Seller’s Market

Means there are more buyers than there are homes for sale. With fewer homes on the market and more buyers, homes sell quickly in a seller’s market. Prices of homes are likely to increase, and there are more likely to be multiple offers on a home. Multiple offers give the seller negotiating power, and conditional offers may be rejected.

Balanced Market

Means there are the same amount of homes for sale and buyers. When there is equal competition between buyers and sellers, this means that there are reasonable offers given by buyers and homes sell within a reasonable time. With less tension between buyers and sellers, the prices of homes remain stable. Before buying or selling a home, it is important to find out what type of market you are entering into. Your listing price, negotiations and expectations will all be affected depending on whether it is a buyer’s market or a seller’s market.

There are a lot of benefits to buying a foreclosure… but there are a lot of misconceptions too. If you’re looking into purchasing a foreclosure property based purely on the fact that it may be a “discount” or the bank’s just trying to give it away, you should probably give it some more thought. The bank has already taken a pretty big loss, the homeowners stopped making their payments, and they had to incur legal expenses with the foreclosing of the property. They are most likely now paying the water bill, the electrical bill, the gas bill, and maybe even paying someone to mow the grass. So with whatever loss they’ve taken, they're going to want to recoup their losses as much as they can. 

So, is the price always reasonable? No it’s not, however most of the time they won’t be unrealistic with their asking price. They will have the property appraised and they’re going to (hopefully) list it at a reasonable price. But they’re not going to give the property away, and they’re certainly not selling it for pennies on the dollar. Yes… they do want to get these properties off their hands, but they won’t be selling them at the expense of losing an additional 20, 30, 50 thousand dollars. If the property is in good condition, there’s no reason for them to discount it. If the house is a nice house that any buyer would love to have, they’re going to sell it at fair market value - or pretty close to it. If the house has been vandalized or needs extensive repairs, they’ll take that into account when they set their asking price… but the price isn’t just pulled out of thin air, they have the property appraised prior to putting it on the market. 

If you are interested in purchasing a foreclosure property be sure to recognize the risks along with the pros. You may be able to purchase the property below market value, although you should know that this may result in you being stuck with the previous owners repairs/maintenance or lack thereof. Plus if any work was done without the necessary permits you may have to pay to get it redone. However if you are a property flipper there is a potential for an investment gain when buying a foreclosed home. The property is usually vacant so possession can be within 30 days, but you may find that there is no electricity or other utilities unless the bank continues to pay for them and/or the home is in a state of poor cleanliness as the previous owners probably didn’t tidy up before vacating the property.

Some other things to consider:

• Vandalism isn’t uncommon in foreclosures; thieves will break in and steal anything… even the wiring, so look out for that

• Budget properly

• Ask if there are any disclosures that the seller needs to make - or any hidden issues

• Bring in an expert to do an inspection - but you need to see the house yourself as well

• The longer a homes has been empty, the more repairs it’ll require

• Find out if the home has been winterized - and ask to see the paperwork

All of this isn’t to say you shouldn’t look into foreclosures, if you are interested in viewing any foreclosure listings or you maybe just have some questions about foreclosures in the Melfort area, send us a email, leave us a message on Facebook or just give us a call, and we’ll get back to you right away.