Periodic tips and reminders to help focus your by-owner marketing and win your commission-free sale - from Canada’s by-owner web-site, www.privatelist.com.

THIS ISSUE:      Market Savvy / Disclosure Of Defects

ARCHIVES:     www.privatelist.com/newsletter.htm

MARKET SAVVY

As a private seller, you want to stay on top of local market conditions in planning or adjusting your by-owner campaign. Our essay Price, Price, Price goes into the issue of current market value in great detail, and a few anonymous phone calls to local realtors may produce estimates of two other useful indicators for your local market: the average asking/selling price-spread and the average number of days to a sale (bearing in mind that up to half of MLS listings do not sell at all).

But you also want a picture of where the market has come from and where it's going. Every year, for example, the Royal Bank publishes a “Housing Affordability Index” summarizing home ownership costs (for a typical detached-bungalow starter home) across the country, relative to pre-tax household incomes, and offering predictions on the near-term strength of regional housing markets. Provincial comparisons from this year’s report:
 

A full copy of the report, in PDF format, can be downloaded through a link in the “News You Can Use” section of our updates page, which provides leads to several other sources of real estate news as well.

There’s no need to obsess about any particular figures, but a general feel for the state of the market, combined with a clear set of deadlines relating to your reason for selling, can give you the confidence to do what needs to be done to achieve your private sale in the time-frame you need.

DISCLOSURE OF DEFECTS

In many American jurisdictions, homesellers are required by law to provide buyers with detailed disclosure statements itemizing all known defects in the property they’re selling.

Some Canadian realtors believe it’s just a matter of time before similar rules apply here, and to protect themselves, offer vendors disclosure statements to be filled out as part of the listing agreement. In Calgary, for example, these statements will be mandatory for Real Estate Board members after April 1 this year; in other areas - Ontario, for example - they are voluntary.

What are your obligations in this regard as a private seller? For a definitive answer, check with your lawyer. But in general, it’s a fair bet that

- you are not legally required (yet) to provide a disclosure statement;

- you are not obliged to volunteer information regarding problems with your property;

- you can likely be held liable for witholding information when questioned about potential defects.

Often, prudent buyers may well make their offer subject to a satisfactory house inspection. And even if they don’t, their simple query “Any problems with the property?” could lead to a legal minefield down the road if you’re not completely forth-coming in your response.

So why not be proactive and, both to bolster your buyer’s confidence and avoid possible headaches in future, prepare a list of potential problem areas. Fix any small defects and be prepared to show your buyer up front how you've taken the rest into account in setting your asking price - thereby converting a potential stumbling block into a negotiating tool!

Here’s a short list of items you should check:

• water problems (roof, skylights, doors, windows, foundation, yard, septic, taps)
• title (liens, boundaries, easements, covenants, shared fences/drives)
• structure (cracks, settling, fences, driveways, cold spots, sealed windows)
• equipment (furnace, heaters, air/water conditioners, pumps, appliances, wiring)
• environment (soil, molds, smells, noise, insulation, traffic, local industry)
• fixtures not included
• chattels included