Before You Buy Your First Home, Beware The Selling Process
Look up, pause briefly for a moment, and remember the good times you had when you bought your home.
We’ll compare those brief moments when the world was your Oyster Rockefeller (because that’s the only way to eat oysters). The emotion you felt when you were buying your home was exciting, thrilling, exhilarating, heck even titillating whatever that means. This emotion was downright erotic.
But what happens when you pull the plug and want to upgrade your place or sell and head for Costa Rica where you can buy twice the house, some beachfront and open up a surf school and still have money left over? You have to sell your place.
And it can be a HUGE pain in the part of your body that regulates sitting.
Look up, pause briefly for a moment, and remember the good times you had when you bought your home.
We’ll compare those brief moments when the world was your Oyster Rockefeller (because that’s the only way to eat oysters). The emotion you felt when you were buying your home was exciting, thrilling, exhilarating, heck even titillating whatever that means. This emotion was downright erotic.
But what happens when you pull the plug and want to upgrade your place or sell and head for Costa Rica where you can buy twice the house, some beachfront and open up a surf school and still have money left over? You have to sell your place.
And it can be a HUGE pain in the part of your body that regulates sitting.
You hop in your car or take a private ride with Uber to a few open houses and condo showhomes on a Saturday or Sunday afternoon just to kill time. A few espressos, hours and fancy salespeople later you feel like getting a mortgage, borrowing some money from Uncle Fred for a down payment and closing a sale to have a place to call your own.
You’re feeling great. You and your significant other have good jobs, life is grand with no worries, accountabilities or responsibilities. You want to grow up and prove to your parents, family and especially your peers that you are SOMEONE. How else do you do that except to buy a home. There's no better display of wealth. Buying a home is soooooo awesome.
Selling a home is the complete opposite. It's like scrubbing a barbecue grill spotless after a biker rally.
In fact my wife, who has successfully undergone the life-altering dark comedy known as child labour, can attest that selling a home is more painful (emotionally – stay with me here ladies) than labour.
The Sex, The Scandal and the Labour of Selling Your Home
Buying a home = sex (pleasure)
Selling a home = labour
Some sex is terrible just as some home buying experiences are terrible - usually because you haven’t found the right one. Other times the sexual (err home buying) experience is fantastic. You fall in love, forget all the baggage that comes along with it, put your best offer forward and seal the deal. Maybe you had a drink and a smoke to celebrate – who am I to judge.
Then the realities of life start to kick in.
Things need work.
You notice more of what’s on the inside than what’s on the outside and it starts to bother you. Things start breaking down, leaking and some parts even develop funky odours that weren’t previously advertised like on your first date (or first showing). It was all patchwork and staged to look good to catch your attention. The cliche says it was lipstick on a pig. And by golly he/she got it and you were hooked.
Your logic put you into the market
“We need a place to call our own, with a den for an office space and an extra bedroom for our future child”,
And your emotion guided you into the purchase
“Well, we can make this 2 bedroom work. The granite looks beautiful and that patio is amazing for entertaining. OMG look at this bath tub and those granite counters – it’s perfect.”
This is the definition of house horny. When you notice these trigger feelings, know that you might be on the cusp of acting on emotion. Most of these rationalizations are for one reason:
This is what you really mean:
I can show off my place and people will like me.
You don’t have to admit it yourself now, that’s fine. But I can attest to this because I’ve been there.
Selling Your Home
So when you do decide to sell, it’s time to cash in the value of your home sweet home. But you won’t get any money, honey, until you seal the deal.
If you’re lucky, you’ll get a bidding war and your place will sell like a Starbucks Caramel Macchiato on a fall day in downtown Vancouver. If you’re like the other 99% of listings you’ll be on the market.
Waiting.
Patiently.
How’s that drying paint looking?
Agony abounds watching the phone in earnest, for it to ring. Well, nowadays it’s mostly text messages and email, who am I kidding. Just trying to paint a picture here.
Selling a home can really suck. Like I said, labour. When it sells, it’s like pregnancy brain. You forget what it was like carrying all the weight around for up to 9 months. As soon as the ordeal is over with – poof – out of your memory.
Your asking price is very important. When a realtor gives you a range of prices to list for, they will give you a range. Don’t get all excited about the top end of that range unless properties exactly like yours are selling at that price. Not asking prices, selling prices.
The real estate agent should be pulling comparable listings for you and giving you a great idea of what your place is worth. It’s worth doing some digging on your own as well.
But where do you look?
Check the assessed value of your home on your latest property tax form or go to your city’s website and check. Usually you can find the property tax assessment of any home in the city for several years back. Quite a handy tool and part of every smart buyer and seller’s war chest of information.
The Selling Process – Like Child Labour, But Longer
Open houses, waiting, showings, waiting, another open house, waiting, showings, waiting.
Arguments with your roommate, spouse or co-owner.
More time elapses. Your real estate agent calls you to discuss lowering the price because market conditions have changed. (News flash, market conditions are always changing).
Alas, an offer!
Oh wait, it was based on buyers financing that fell through. Now you're back on the market. Waiting, open houses, showings.
At least birth is usually no more than 24 hours.
Then finally a legitimate offer comes down the pipeline.
An offer can contain anything really, as this is done through a formal Contract of Purchase and Sale. The first time you see this document it can look a bit intimidating. As you do this more and more, it gets pretty standard. A good real estate agent will be very transparent and explain all the requirements to you. If they don’t, make sure you ask.
If you need any clarifications, ask your realtor to explain any term in the contract offer that you’re not familiar with. It’s their job and you’re paying - You’re the boss.
The main part of offer contains the bid price and 99/100 times an offer contains subjects. Subjects are other things that can be included in the offer and this mainly includes:
· Subject to Financing (aka getting a mortgage)
· Home Inspections
· Sale of the buyer’s home (so they can come up with the money to buy your place)
· Anything else the buyer wants out of you, such as:
o Subject to carpet cleaning
o Subject to repairs being completed
o Subject to 120 days closing period before the completion day
o Subject to leaving the pet dog, Ginger
o Subject to the Corvette in the garage
I’m fairly confident the only things off limits as part of the sale are human beings.
You can feel free to check court cases at your provincial/state court for that if you’re into the human buying business. If that’s the case, you have bigger issues.
A clean offer involves only a price, a home inspection and a reasonable closing date. Anything more than that and it becomes more convoluted than Laplace Transformation Equations in differential calculus. Yeah, exactly.
I once had an offer on one of my homes that was 10% below my asking price (I listed it at the lowest price the realtor proposed to be competitive). This lowball offer included the following clause “subject to the sale of the buyer’s property if it sells before (4 months from the date signed)”
Are you kidding me? I thought.
These buyers haven’t even listed their home for sale and they make an offer based on fairy dust and hope. I hope they make smarter decisions in the future than buying a new place when you haven’t even put your current one on the market. I forgot to mention their place for sale was an apartment, identical to 8 other places in their building, for sale. As Uncle Jesse said, haaaave meeeercy.
My First Sale
The first time my wife was involved with a sale, we were selling her condo in Vancouver for $438,000. After a couple of months on the market and still no offer, we got our first one - for $418,000.
My thoughts – “Sweet, an offer! Counter with a fair price and let’s seal the deal.” Of course, I never told her my thoughts. I was watching her reaction.
My wife’s thoughts – “How dare they offer such a low price!”
She was seething. Fangs started to grow from her teeth. Her blood was boiling. She was livid that someone would offer $20,000 less than her asking price. She was yelling at the RE agent on the phone to tell that buyer to piss off when the buyer refused to budge when my wife countered with $435,000.
After half an hour of the most illustrious curse words this side of the Adriatic, she looked at me from atop her perch at the kitchen table while I was reading a book. “Babe, what would you do?”
Eureka, my turn to talk. Finally.
“I think you should take the deal or counter very close – say $420,000. The money is on the table for you to take. Who knows when another offer will come.”
She took the deal and the buyer went for the counter. My wife got her equity out, the buyer got a place and everything was more awesome than the Lego movie.
I love it when a plan comes together.
I could see that if left alone, she would have gone crazy, left the deal and God knows how long the place would’ve been on the market for.
You will get emotional.
You will feel threatened and disgusted when someone gives you an offer lower than your asking price.
"How dare they offer that price on MY home"
Remember this:
The seller is always an optimist. (My place is beautiful, why wouldn’t anyone pay me more than I’m asking for.)
The buyer is always a pessimist. (This place is alright, needs some work, here’s a low price)
This is a word of caution to plan for the whole process when you plop down that down payment: Buying, living AND most importantly, selling.
Unfortunately you wont learn this lesson until you go through it yourself.
These things you just won’t learn in school.
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