By: Properly
Selling a house can be a complicated process. From understanding its value to negotiating with buyers, homeowners can easily become overwhelmed and confused. Understanding commonly used terms within the real estate industry can help you navigate the sale of your property with confidence. The following five terms are often used by Realtors, lawyers, and buyers in reference to a sale. Learning the definitions of each term can help you sell your home with greater clarity.
1. Sold Price
The sold price refers to the amount of money a home actually sells for. This number is an important figure in estimating the value of your own home. For example, if similar homes in your neighborhood have a sold price of $300,000, you can feel confident in expecting the same amount for your own home. Average sold prices are also helpful in determining how much a home can go for in a certain area. For example, the national average sold price in August was $493,448. However, the average sold price in British Columbia during the same time period was $684,140. These figures can help you understand the value of homes in surrounding counties and set an accurate list price for your own property.
2. List Price
The list price is the amount of money that the owner is asking for the property. Due to home inspections and current market trends, the house may sell for more or less than the original list price.
Buyers can also use this price to narrow down their search and only look at homes within their budget. Because the list price is not set in stone, a potential buyer can negotiate with the owner until they both agree on a final amount.
Thinking of moving and need to understand the value of your home? Get a free offer on your home in just a few clicks at Properly.ca.
3. Days on Market
When a home is ready to be sold, the owner (or real estate agent) places it on the market. At this point, the property is available for offers. The term days on market refers to the time the property is actively listed before an offer is accepted. Depending on where you live, your property may sit on the market for less than a month or more than four months. Various factors that may impact how many days a property sits on the market, such as price, unique characteristics, and current market trends.
4. Sold-to-List Ratio
The sold-to-list ratio refers to the difference between the sold price and the list price. If a property is listed at $100,000 and is sold for $150,000, it has a sold-to-list ratio of 150%. However, if the property only sold for $80,000, the sold-to-list ratio would be 80%.
Note: Don’t confuse this term with the sales-to-listing ratio, which refers to the number of homes sold compared to the number of homes listed. The current sales-to-listing ratio in Canada is 60%, which is considered a seller’s market.
5. Tax Assessment
A tax assessment refers to the amount of money you owe to local, state, or federal governing bodies. In most cases, these assessments are made when you sell an item subject to taxation, such as a house. However, if you sell your primary place of residence, you are exempt from paying tax on the profits. If you used the property to generate income, such as renting a portion of the home to tenants, you must report the earnings to the Canadian Revenue Agency (CRA) and pay capital gains tax.
Thinking of moving and need to understand the value of your home? Get a free offer on your home in just a few clicks at Properly.ca.
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