Q&A for Selling a property in Vancouver

Bolld Real Estate ManagementSELLERSQ&A for Selling a property in Vancouver

Q: Should I renovate my home before putting it up for sale?

A: The following is a list projecting which home improvement initiatives often produce the best results upon resale value. Naturally these numbers are not rock solid. There are many factors including your local housing market and what kind of improvements you undertake.

Kitchen Remodel (minor) – 125%

Basement Remodel – 98%

Bathroom Addition – 96%

Kitchen Remodel (major) – 92%

Bathroom Remodel – 90%

Exterior Paint – 90%

Master Bedroom – 86%

 

So, here you can see that home improvements to kitchens and bathrooms, pay excellent dividends. Not only that but they are often the most enjoyable changes for your everyday living.

Scope of Improvement
Often with home improvement, the small changes often add up to more than the sum of their parts. The larger the scope of the home improvement, the more risk you will incur. That said, risk could turn into a high pay-off. You really have to know who your market is and what they are looking for. The following is a list of small changes you can make, which will make a huge difference:

Upgrade or add ceiling fans

Add new doors

Fresh paint

Garden Sanded and stained deck and fence

Wallpaper

Fad = Bad
What is chic today can be the stifled snicker-inducing mistake of tomorrow. Take into account shifting social values. For instance, public space is rapidly dwindling. People, more and more, are looking for space where they can casually entertain. There are no more block parties, no more picnics in the park. Take this into account. Add a deck, it is the new standard for home ownership.

Cost
Do not expect that if you put $20,000 into a renovation, you will automatically see $20,000 added to the value of your home. However, even if you only can recoup $10,000 of that, if you are there long enough you easily get $10,000 of use from a new kitchen. You should also think about doing as much of the home improving yourself as you can. Having a hands on approach will give you flexibility, and a new understanding of your home, that you can apply to other home improvement projects. It will also save you lots of cash.

New Windows
Not a good resale investment at all. You can tell the buyer that you just added new windows, but that doesn’t really matter. Unless you can demonstrate a significant savings on your electricity and heating bill there is really no point. Therefore, replace windows if they need to be, but never just before you are selling your home.

Creating New Space
Whether this means taking space that was poorly used before, or adding an addition, it can be a good idea. It is often important to look at design before functionality in this case. If you are improving your basement, don’t put in a bar. Instead leave the space open to interpretation. Leave it open, leave it clean. Like blank slate. The same can be said for studies, solariums and offices. Let the buyer decide.

Q: What is the Depreciation Report?

A: Depreciation Report is a report that states all the deficiencies or upcoming work a development will require. These reports are a new, not-quite-mandatory legal requirement for all forms of strata properties that have more than four units. A strata may exempt itself from the requirement to prepare such a report every three years only by passing an annually renewable resolution that is supported by three quarters of the owners.

However, “If a strata chooses to exempt itself, the presumption may well be that it has something to hide,” Tony Gioventu, the executive director of the Condominium Home Owners Association of B.C. said.

Gioventu said the legislation is “the most important change in the industry in 40 years” and, although some strata owners will grouse at the cost, it will ultimately be good for both owners and potential buyers.

For owners, it will ensure future needs have been assessed, and make the future cost of ownership far more predictable.

“Special levies, as we know them now, are often unexpected,” he said. “That shouldn’t be the case in the future. Strata owners might still decide not to raise monthly fees and build a large contingency fund, but at least the owners will know when special levy is coming and how much it might be.”

For buyers, “it will make it much more difficult for sellers or for strata councils to withhold information.”

More detailed information on this legislation and its implications can be found on the CHOA website at www.choa.bc.ca/updates.html

Q: Should I get my REALTOR to present the offer to me or should I allow the Buyer REALTOR to present?

A: This depends on how well you can maintain a poker face. Realtors choose to present an offer to the Sellers directly because they get to gauge how good their offer is and how much room there is to negotiate. They will also look for clues as to which Seller to focus on as this is probably the decision-maker. Their job as Buyer’s REALTOR is to gather as much clues possible to support squeezing your price so if you think you have a hard time showing no emotions, then it is better to have them present to your REALTOR and your REALTOR to you so your REALTOR can protect your negotiating position.

Q: Should I buy my property first then sell or sell my property first then buy a new one?

A: To ensure your negotiating position is not compromised, it is best to first sell your home then make a purchase unless you can afford to hold 2 properties comfortably. If you had already made your purchase, you may be forced to accept a less than ideal price on the property you are selling because you cannot afford or wish to lose money by holding onto both properties. Moreover, keeping a vacant property is not the best way to maximize your returns, everyday a property sits vacant, it is costing you money. Things like property tax, mortgage payments and hydro bills will keep accruing even when it is vacant.

I never liked to have my clients in such a position but if the mistake is already done, I will advice you not to talk to your neighbors about your new purchase as they may take it that you will be pressed to sell your property at a lower price. Remember I mentioned that most of the time, it is your neighbors who has friends or families that wish to move into the neighborhood?

Q: Which REALTOR should I pick to sell my home?

A: Choosing the right REALTOR to sell your place is never easy because every REALTOR has different specialties and work in different neighborhood with different marketing strategies. It is always advisable to interview at least 3 REALTORs before coming to a decision.

What should you look for? How knowledgeable is the REALTOR on the area where your property is located? Can they service the active Buyers in the neighborhood? (E.g: If your neighborhood is mostly Chinese, it is likely a Chinese will buy your property and hiring a REALTOR that speaks Chinese will ensure that the REALTOR will be able to market your place to them more efficiently.) Is this REALTOR responsive? Can I communicate with this REALTOR effectively?

Q: Why did all of the REALTORs I interviewed quote me a different price on my home? What should I list it for?

A: Different REALTORs view the market differently, we may see different comparable properties therefore arriving at conclusions. Most REALTORs would have found some properties they feel is comparable to yours and explained why, listen to why they feel it is comparable to yours, see if it makes sense to you.

These are some of the things I look at when I find a comparable property:

Location of property (different areas have different pricing, you can change the interior or exterior of a house but you cannot change it’s location)
Lot size (this is important as we know lots in Vancouver always worth more than the house, even your tax assessment will agree)
What type of house (if your house is a 2 level house, I cannot exactly use a 3 level house as comparable because it is different, a Vancouver Special is also in its own class as these were built when the setbacks are not so strict therefore offering more finished area.) *If you are to tear down a Vancouver Special, there is no way you can build the same size 2 level house on the same lot.
Age of house (comparing a 2 year old house to a 20 year old house is not a good comparable)
Number of finished kitchen (this is becoming increasingly important as Buyers now prefer to have a mortgage helper)

Everyone thinks a REALTOR should be telling you how much you should list your property for, this is not true. You are in the driver’s seat and whatever price you wish to list your property for, I will comply. I can only advise you to keep to a certain price range because I have researched and concluded that comparable properties in recent sales or current competition are priced in this range.

Q: My television, mirror or bookcase is mounted on the wall, can I bring that with me to my new property?

A: Will It Stay? Chattel vs. Fixture

With flat-panel TVs mounted on walls, and stainless steel appliances strategically used to stage homes, buyers are including more chattels and fixtures in their offers to purchase these days.

(Examples of chattels: fridge, stove, microwave, Fixtures: Built-in dishwasher, exhaust fan, faucet and hardware.)

Is it safe to assume that if a fixture is not listed as an exclusion in the purchase agreement, then it’s automatically included with the property? Not always! I’ll give you an example.

My Seller recently bought an LCD TV and wall mount bracket to hang it on, not long after we accepted an offer. The prospective buyers are very excited about having the TV all ready for them when they move in; they assume it is permanently attached and so comes with the house.

However, while the wall mount is attached to the home, and thus considered a fixture, my TV is attached to hooks that hang from the mounting bracket – making it a chattel.

As such, their realtor should specifically list the TV in the “Chattels Included” section of the offer.

Legal Fight over Chattel

If the buyers move in and see my TV is gone, they’re on the horn with their lawyer and the legal fees for both parties start to rack up quickly.

I’m sure after a lengthy explanation, a few photographs and a lot of added stress, the buyer’s would realize that the TV was not included and the deal would close anyway.

As the seller, I’m left with a larger legal bill and an upset buyer. The buyers are left with having to purchase a TV they thought they’d already bought with the house!

The point is: If you want something in your new home, include it. If you’re not sure, include it. If there’s any doubt, include it.

It may seem odd to put a storage shed, central air conditioning, or even a garage door opener as inclusions – but full disclosure for both parties will ensure everyone knows what stays and what goes.

The end result should be a smooth transaction where both buyer and seller get what they expect.

Q: My appliance broke down after the new buyers did their home inspection, do I still have to fix it?

A: Yes you will have to fix it because it is stated in the contract of Purchase & Sale that the property should be in the condition that the Buyers viewed so when they viewed the property, the appliance was in working condition, therefore when they received possession of the property, it should be in working condition too.

Q: What do you charge to sell my home?

A: I charge 7% on the first $100,000 and 2.5% on the balance to sell a property. Out of what I charge, I always pay 3.255% on first $100,000 and 1.1625% on the balance to Buyer’s REALTORs because I believe in providing my Sellers with the greatest exposure possible therefore I never give Buyer’s REALTORs a reason not to sell your property to their clients.

Example:

Purchase price on property is $1,000,000My fees are (TOTAL fees payable by Seller):

7% on first $100,000 = $7,000

2.5% on the balance (2.5% on $900,000) = $22,500

HST: ($22,500+$7,000) x 12% = $3,540

Total = $33,040

Out of my fee, Buyer’s REALTOR receives:

3.255% on first $100,000 = $3,255

1.1625% on balance (1.1625% on $900,000) = $10,462.50

HST: ($10,462.50+$3,255) x 12% = $1,646.10

Total = $15,363.60

Q: Do I have to pay commission to the REALTOR who paid money to advertise my house but did not sell?

A: No, the REALTOR’s commission is earned only if they have sold your home.

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