Steve Gobeil

Need to sell your home to buy your next one? Chances are, yes you do! It may seem pretty simple but with assets this large and more than one party with their own self interests it can be a tricky endeavour. The key is in understanding the current market conditions and having your ducks in a row so you can mitigate the risks.

Here we guide you through the types of markets that will inform your approach, how “Subject to Sale” clauses work, and how to get ready to sell and buy real estate.

MARKET TYPES - The real estate market ebbs and flows in and out of sellers and buyers markets based on the simple law of supply and demand. When there are more buyers than homes for sale, or low inventory, we get a sellers market. When there are more homes for sale than there are buyers, or high inventory, we get a buyers market. And of course, when supply and demand are roughly the same we are in a balanced market, a nice level playing field for everyone.

There are ratios we use to determine mathematically what type of market we are in, if you’re super into math just ask we’re happy to provide!

SUBJECT TO SALE CLAUSE - A subject-to-sale transaction is when the sale of a property depends on the sale of another property. The buyer agrees to buy the property only if they sell their own property within a specified time frame. This type of transaction is common when a buyer wants to purchase a new property but needs to sell their current property first to finance the purchase. If the buyer can't sell their home within the agreed upon time frame, the offer and contract become void, making this a great safety net in terms of financing.  There are drawbacks to using this clause, make sure you read the 3rd and 4th bullet points in the "RISKS" section.

SO, WHAT IS A CLAUSE? - Clauses are nifty pieces of text that are added to an offer (which is a legally binding contract) and make the offer subject to the conditions a buyer or seller will complete a purchase or sale. A common one you might know is the clause "subject to inspection." You offer X amount for a house, but we add a clause that stipulates it is subject to an inspection. If that inspection reveals something you cannot live with, the "subject to..." clause provides an exit option for you.

• In a seller’s market: Chances are your home should sell relatively easily. BUT! The tricky part is where do you go once you sell?  With fewer homes on the market this could make finding a new home that ticks all your boxes difficult to find.  And if you’ve sold your home, you are now on a deadline to buy a new one.
  
  
• In a buyers market: You’re looking for a new home and there are lots to choose from, it’s a shoppers dream. BUT! Selling your own home may be tricky. There are many homes on the market, a lot have been sitting for a while and the competition for buyers is fierce.
  
  
• The Bump Clause: When using a Subject to Sale clause in your offer, the Seller is accepting it understanding there are no guarantees your property will actually sell. A prudent seller may add a “bump” clause to the buyers subject to sale condition, this allows the seller to force your hand if they receive another offer, generally giving you 72 hrs to remove all conditions. If you can’t, the seller will move on.
  
  
• Offer rejection:  A property may receive more than one offer and the seller has right to choose which one benefits them the most.  If they can choose between two with the same price and conditions but one has a subject to sale clause, chances are the one without will win the day.
   
• Interim housing: If you sell your home and have not yet found your new home or your closing dates are way off, you may have to stay with family and place your things in storage or rent a temporary place to stay. 

• Be ready to sell BEFORE you start shopping. If you are planning on using a subject to sale clause, you’ll be asking the seller to hold their home for you so try to put them at ease. You want to let them know that your home is ready to hit the MLS, the marketing team is on deck and you’ve priced it correctly. We’ve written an in-depth guide on preparing your home, you can READ THAT HERE. It's ok to window shop, but read on to #3 for another reason to be ready!
   
• Organize your crew. Make sure your financial team, your realtor, your notary or lawyer are ready, available and capable. Blow the horn and get everyone in line!
   
• Be ready to buy. When you find THE ONE, you're going to want to pull the trigger and things move fast, especially in a seller's market, and you could lose out to another buyer.
   
• Consider getting your home pre inspected if you don’t want to lose time with the chance a buyers inspection comes back not in your favour.  Potential buyers may require you to fix an issue or ask to renegotiate the purchase price, these things take time and you’re on the clock.
   
• Unless the stars align and all your closing dates match up, you may need financing to carry you through the interim.  With so many moving parts this is quite common, and bridge financing can be obtained with a firm agreement in place.
   
• If you sell first, talk to your realtor about the possibility of a rent-back agreement; a short-term leasing agreement allowing you to stay for a short period while you buy your new home. Of course, you'll need an amenable buyer for this one to work.

IN CONCLUSION.  Every property transaction is unique, and both buying first or selling first come with their own set of risks. Understand the ins and outs, get good advice, and listen to the Boy Scouts: Be Prepared.

Steve & Selena

Leave us a comment below and follow along with us on social media:
@TheGrowRealEstateGroup

Call or text us:
Steve: 604-302-3882
Selena: 236-258-6606

Email us:
Steve: hello@stevegobeil.com
Selena: hello@selenawallace.com 

On Google:
Steve & Selena

Grow With Us, Grow Your Wealth 

LEGAL DISCLAIMER

The information on this site is provided for interest only. This information should not be substituted for professional consultation or advice. While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, we are not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided as is, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will The Grow Real Estate Group and/or its members be liable to you or anyone else for any decision made or action taken in reliance on the information in this site or for any consequential, special or similar damages.

 You're thinking of selling your home, so you search on Google for "how to stage your home to sell". However, all you find are before-and-after pictures of completely renovated spaces. If you had the funds to update your home, our guess is you probably would have done so already.

 It's no secret that homes that are prepared for the market, staged and cleaned tend to sell faster and for more money. While there are companies that can do this for you, what if you want to do it yourself? Is it possible? The answer is yes, it can be done with a little hard work and for free.

 The first step is to adjust your thinking.  If you're going to sell, look at your home for what it is right now; your asset. Start thinking like a buyer. If you were looking at buying this particular home, what do you want to see? You want a clean, bright home that you can envision your life in.

Prevent complaints and avoid incentivizing buyers to make lowball offers. Don't make the selling process longer and more difficult than it needs to be, especially when there are things you can control.

• Bathrooms:  Pay special attention to grout, tubs, toilets, and glass. Bar Keepers Friend works wonders on these and will remove any lime, soap scum, and rust buildup with ease, even on glass shower doors.
  
  
• Kitchens: Stove tops, fridge doors, and sinks should be thoroughly cleaned and stainless steel polished.
   
• Walls: We know you probably don't want to paint (if you do, that's great!), so grab a Magic Eraser and get rid of all the scuffs on the walls.
   
• Windows: So important! Clean windows not only let in more light, but they can also help rooms feel larger. Dirty windows are VERY noticeable, so clean inside and out.
   

So get some boxes, start packing up all the personal items: family photos, excess decor and that mystery remote.

• Kitchens: This may be a tough task, but it's important to remove almost everything from your countertops. It's okay to have a few small appliances, but not an excessive amount. Only leave out your absolute essentials. To make it look more organized, group those items together - we'll explain this trick a bit further down.
   
• Bathrooms: Most of your things should be put away. Bathroom items tend to be seen as personal, but you can leave out some decor, clean towels, and add a plant. Plants go a long way in adding an aesthetic appeal to the bathroom. When it comes to the items to be left out, you're going to want to group them together.
   
• Surfaces: Coffee, dining, and side tables should be clear of clutter and personal items, except for a small amount of decor such as a few books, a reading lamp, or some flowers. you're aiming for "Ikea Showroom". Again, use the grouping trick here too.

  
 You can definitely stage your home with the furniture you already have. You don't need an impractical white sofa and chairs in the living room to make an impact. The key is in placement and reduction to create flow.

• Unless you have a long and narrow space, avoid placing furniture flush with walls. This can make the room look smaller. Give the furniture as much breathing room as possible and focus on grouping them in the center of the room. Create a gathering space within the room.
   
• Unless you have angled walls in the room, don’t place large furniture on an angle; stick to a grid pattern for furniture placement.
   
• Ensure that the room has good flow. If you have a combined living and dining space, use your sofa or a chair to separate the areas. Avoid clustering all your furniture in one corner to create space, as it will only make the room feel cramped. Instead, ensure that there are clear pathways through the rooms. 
  
  
• If you have large pieces of furniture (looking at you lazy boys and leather sectionals) pare down the rest of the room by removing excess side table, chairs and decor.
   
• Most of us arrange our furniture for maximum TV watching and while this may be practical, it will rarely yield an inviting room. Create a cozy gathering space where you can actually interact with other human beings (yikes, we know!). Position your chairs and sofas facing each other, keep windows and fireplaces unobstructed. 
   
  

TIP

 

 

 When it comes to organizing countertops, forget about even spacing. Instead, jam everything together and put it on top of a tray or wooden cutting board, even a couple of books. This trick works on all surfaces, from living room tables to kitchen counters. Give it a try with your essential items like S&P shakers, toaster, and utensils in the kitchen. Voilà - instant organization.

 

 We hope you found this helpful!  At Grow we offer free in-home staging assistance for all properties we list for sale.  So if you're thinking of selling and this all seems too overwhelming; reach out and say hello!

**We wrote about the science behind how and why staging pays off for home sellers, to read go here.

Steve & Selena

Follow along with us on social media:

@TheGrowRealEstateGroup

Call or text us:
Steve: 604-302-3882
Selena: 236-258-6606

Email us:
Steve: hello@stevegobeil.com
Selena: hello@selenawallace.com 

On Google:
Steve & Selena

Grow With Us, Grow Your Wealth 

A newly built home; a clean oven, scuff-free floors, pristine countertops. Oh and that new home smell, it’s hard to resist! If you're a first time home buyer, wanting to downsize or have considered taking advantage of the new strata rules allowing for rentals then a presale condo or townhouse in the Fraser Valley might be right for you.

The process IS different and can be daunting. Let’s walk through everything to expect.

WHAT IS A PRESALE?

Purchasing a pre-sale is not the purchase of an existing physical property, but rather a contract for the right to receive, and an obligation to pay for, a finished unit at a point in the future.

THE STEPS:

The Pre-Approval Process

Getting pre-approved for a mortgage is standard for any purchase. Where it differs is the time between the approval and when you start making payments.  It could be years, and interest rates and your financial situation could change.  What happens if things DO change and how will this affect your mortgage qualifications?

You’ll need to know this from your lender. RBC offers firm approvals for clients purchasing presales with completion dates as distant as three years. This means that as the completion date draws near there is no need for updated employment/income, credit checks, etc. This may not be the case with all lenders, and the “what-ifs” need to be known.  More info from RBC here.

The Payment Process

Developers set the amount required as a down payment, it’s not uncommon to see 5%. They may require more, and there may be a payment schedule set up to raise that amount over time to 10% or even 20%.

As stated above, you absolutely should get pre-approved for a mortgage before signing your contract even though you will not need your mortgage nor need to make payments on that mortgage until you take possession.

If you're an "I'll worry about it later" person, you're putting your down payment at risk and could be liable for damages to be paid to the developer.