Establishing the right selling price

One of the essential tasks of the real estate agency or broker is to establish or help the seller establish the selling price of a property. To determine the property's fair market value, the real estate agency or broker must, among other things, perform a comparative analysis with other similar properties on sale or recently sold in the neighbourhood.

The selling price must reflect reality. When a broker advises his selling client about the value of a building or enterprise, he must give an opinion that is based on and supported by generally accepted practices1.  In addition, a broker must not provide or advertise false, misleading, or incomplete information, notably as to the selling price of a property. The advertised price must be the one set out in the brokerage contract2. Furthermore, setting a price that is significantly lower than the market value and the comparables used with the aim of creating competition is not allowed.

Therefore, upon signing a brokerage contract, several important pieces of information must be obtained and verified by the real estate broker–lot area, amount of taxes, general condition of the building and its main components (roof, electrical system, septic tank, artesian well, etc.). It is therefore essential that the seller supply his real estate broker with all the information regarding the property, particularly by completing the Declarations by the seller of the immovable form (or Declarations by the seller of the immovable – Divided co-ownership), as well as with all relevant documents. The real estate broker must also take into account the seller's needs and situation to establish a fair selling price, for example, succession, separation, legal warranty of quality, etc.

To establish the fair market value of a property, the broker may also advise and inform the seller of the factors that may have a positive or negative effect on the property's selling price–site, dimensions, year of construction, condition of the property, number of rooms and their layout, materials used, landscaping, current market characteristics, etc.

During the term of his brokerage contract, the real estate broker must advise and inform the seller so that the seller can adjust the price of the property according to the changing market or even review it for any other reasons.

 


1. Section 76 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising [RBR]

2. Section 112 of the RBR

Last updated on: March 16, 2021
Numéro d'article: 122864