Contrary to popular beliefs and what realtors would have you believe, it is very much possible for you to sell house privately in Alberta. Think of it this way – as long as you understand the specifics of the real estate market, know what documents are needed to close the deal, how much to pay an attorney, and the costs associated with selling a home in Alberta, then it’s possible to sell your home privately.
However, it’s not easy. Once you put up that For Sale By Owner (FSBO) sign, you will be surprised to learn that most of the callers are real estate agents rather than buyers. This might be discouraging in the beginning, but as long as you know what you are doing, this shouldn’t stop you. If you are wondering how to sell your house privately, you’re in luck because this article focuses on just that. Let it be your guide on how to sell a house without a realtor or a real estate agent at a profit (and easily).
Before delving into the details, you have to understand that selling your home privately can be quite challenging, especially if you are not well-prepared. In most cases, people who choose to sell their homes on their own or are looking up ‘how to sell house by owner’ online are faced with the challenge of their homes staying on the market longer than expected.
This often happens when you are not attracting or even getting the best offers from potential and qualified buyers, something that drives most sellers to seek help from the realtors.
You shouldn’t give up on the dream of being able to sell a house privately, though. Despite the challenges, you can sell the house easily and at a profit, if you have the right information. This information is shared below. So, let’s get started!
Selling House Privately (Individual to Individual)
This is the fastest, most effective way of selling your property. You don’t need to enlist the services of a realtor, and all you need for that successful sale is willing and capable buyers. So, the work here would be finding the perfect buyer for your property. This also means knowing what documentation you’d need to successfully sell the house to a willing buyer.
Places like Mr. Home Buyer allow you to sell house without agent, making the whole process much easier. They set up meetings where buyers come to your house and buy your home without any third party involved. Even if your house is facing foreclosure, they would still be able to buy your house while avoiding any damage to your credit. But if you choose to sell your home on your own, here are some tips you can follow.
Tips to Know Before Selling a House Privately in Alberta
1. Prep Your House
It seems obvious, but you’ll be surprised by just how many people forget to do this, do it incorrectly, or leave glaring issues with the house they intend to sell.
Prepping a house for sale starts with repairs and touch-ups. You should start with repairing things like a leaking faucet, replace the old cabinets in the kitchen and the bathroom, replace the tiles, apply a fresh coat of paint to the walls, and replace the old light fixtures with new ones.
Before showing the house, clean every nook and cranny thoroughly. Clean all the furniture and remove the old broken furniture and fixtures, and make things more impressionable around the house.
If the colour of the walls is too colourful, you could try painting them white or any other neutral colour – preferably opt for the same colour throughout the house. Again, first impressions matter. So, if you feel that a bigger window would make the house more attractive to buyers, make the improvement.
You might also want to hire a home inspector to come to check things out. The inspector will give you a comprehensive list of the issues in the house, and you can fix all of these issues or some of them.
Once you’re satisfied with the state of things in the house, you may want to engage the home inspector for a final inspection. This inspection is crucial because it will help bring to major light issues with the house that would affect the value of the house.
A pre-inspection and a post-inspection would help you get the best out of your house, and because the buyer would need the inspection report, getting the inspection done beforehand ensures that the house is priced right.
So, clean up well, repair, touch up areas that need a facelift, replace the old appliances with new, matching appliances, and make sure that everything is working as it should before you put the house on the market.
2. Set the Sell Price for Your Home
You need to be able to set the right price to sell your home. The set price shouldn’t be too low or too high. The price set should be determined by factors like the location of your home, the market price fluctuations, the condition of your home, whether the prevailing real estate market is a buyer’s or a seller’s market, etc.
You also need to know that your emotional attachment to your home will not and should not affect how you price the house. The price you set for the property must be reasonable and objectively set.
You need to take time to compare market pricing for similar properties (condition of the house and the features offered, against the asking price) and be privy to the terms of sale for other similar properties sold in the recent months.
Once you have all these details, compare your budget for the total selling costs, then compare that with the best estimates that you’d get from the sale. Such a comprehensive analysis means that you get the best offers and because buyers would request an analysis of your buying costs, write it up before you put up the sign.
3. Prepare Yourself with all Necessary Legal Documentation
This bit of selling a house privately might not be the most fun because it has many very important legal documents and contracts to be assembled, understood, and completed. These documents will be given to the prospective buyers and also just used for the necessary legal documentation.
- The Seller’s Disclosure document
- The Purchase Contract
- Mortgage Payoff
- Copy of Title
- HOA Restrictions & Disclosures
- Buyer’s Cost Sheet
- Property Profile Fact Sheet
- Personal Property Exclusion Sheet
- Real Property Report
In other words, before putting that FSBO sign on the lawn, you must have these documents. They should be up to date and perhaps certified. Here, you’ll need your attorney to help, not just to certify the documents but also to come up with the legal documentation. Find an attorney whose expertise is in real estate and also a professional who will be ready and willing to explain everything you need to know about these documents.
4. Show Your Home
Once you’re sure that your home is ready for the market – that is, the small issues have been fixed, perfect photos taken by a professional, curb appeal created perfectly, any issues with the properties fixed, and the house staged, the next important thing for you to do is to show your house.
When it comes to showing your house, you have to be flexible. You may have to show the house to many people, and this means having the capacity to handle all the showing requests you will receive. Last-minute showings will spring up more times than you’d like, but be ready to make the arrangements. Keep in mind that one of the late potential buyers who couldn’t show up earlier could be the one who buys the property, and having a fixed schedule for showing the house could mean that the house stays on the market longer.
Regarding showings, you could think of holding an open house, especially if you wish to sell the house quickly. This is an easy approach because it brings you, multiple potential buyers at the same time. So, make sure to clean your home well, have some fresh flowers and treats, and also have flyers or brochures that these buyers can take home with them – you could also share digital copies of these – a 3D or virtual and a PDF.
Alternatively, you could opt for private showings for the buyers who haven’t been to the house before or the buyers who need a closer look at the house after the open house for a more informed decision. Whichever option you choose, you have to be accommodating, and the house should be tour-ready most of the time.
On that note, you should avoid being present during the shows because the presence of the homeowner always makes buyers uncomfortable.
Also, you must be objective when showing your home (share more positives when a potential buyer brings out negatives, but don’t go on the defensive), be available on the phone always, check your messages and emails, and be ready to give all your prospective buyer a tour of your home at a moment’s notice.
5. Negotiate Your Sale
You should be able to negotiate for the best price for your home, and to do this; you have to be able to negotiate knowledgeably and effectively. Before you consider a sale final, go through all the details around the terms, the price, possession date, inspections, objections & concerns by the buyers. The buyers also go through these specifics, which is why you have to beware of all the specifics. Also, you must understand what the drawn-up contract is all about, the ramifications to seller and buyer, and amendments that may be necessary. To avoid issues, it’s always helpful to involve a real estate attorney.
Before and during the negotiations, you should pre-qualify the prospective buyers. How? Stop entertaining the persons who cannot afford that house. This means that you must research the financial steadiness of the prospective buyers by looking at their salaries, job security, credit, liabilities, and debts.
6. Don’t Move Out Before You Sell
The inconveniences around showing your home whenever you are needed to may make you wish that you’d moved out because the house won’t be in perfect shape always. However, you should resist the temptation to move out and show an empty house. Very few people will see the beauty of that space then unless you have it staged by professionals – which will cost you more money eventually. So, stay on for as long as the house is on the market.
In addition to the zero allure around an empty house, showing an empty house tells the buyers that you want to sell the house as fast as you can, and they will have an advantage over you on the negotiating table.
7. How to Assess Your Net Gain
This is the other important thing to do when you sell your house privately in Alberta. It’s also one of the more complicated things to do.
You need to assess your net gains to determine whether the sale will be profitable, break even, or if it will leave you underwater. This is, therefore, one of the most important considerations for you to keep in mind because most of the investors, buyers, and speculators looking for FSBO offers are often looking for bargains. They will, therefore, give low-ball offers (and often win) because most sellers aren’t knowledgeable about the market going rates or the net gains from such sales, and even when they do, the net gains end up being too low in the long run. So, you might as well educate yourself before selling your home without a real agent.
Here are some of the things you need when assessing your net gain:
- Prepare specific and accurate/ relevant data on the negotiations, marketing, and evaluations for the property prices, as well as the legal aspects of the sale.
- Determine the cost-effectiveness of the FSBO option over the use of a realtor
- Is the deal profitable after you’ve subtracted the cost of selling the house, etc., against engaging a realtor?
- The cost and effect of the buyer’s realtor fees
8. Reach the Final Agreement
Once you’ve determined that the buyer is the right fit for you and that they can afford the property, and also after ironing out any issues, you can come up with an agreement.
The foundation of this agreement will be based on the agreed price for the house. The agreement must have the following specific details – names of buyers and sellers, as well as phone numbers and email addresses, details of the lawyers, etc.
Once signed, the paperwork from the buyer and seller would be exchanged through your lawyers. The agreement must be clear, and if they aren’t, the lawyers would require both sides to amend and agree to the changes. The agreements are only final when all their details have been accounted for.
9. Close the Sale
Since the deal has been reached, the next thing to do would be to settle on a closing date – specified in the final agreement – Sale and Purchase Agreement.
Note that the closing date is the day that the property is paid for, and the keys plus the deed given to the new buyer. This is often after the seller has moved out.
As seen above, you can sell your house privately without it being a complicated situation. Just follow the steps and tips above on how to sell a home privately in Alberta, be optimistic and reasonable, and you will have the perfect deal.