Selling Your Home
One of the biggest financial decisions that you will probably ever make in your life will be purchasing real estate. So, weather you are a first time seller or have bought and sold property before, it’s important that you prepare accordingly and make fully informed carefully considered decisions.
Why are you selling your property? Maybe it’s a relocation, down-sizing, up-sizing or perhaps caring for an aging parent. It’s important to take some time and get clarity about the “why”. Having an understanding of your motives will help you determine your time frame for moving, as well as lifestyle and financial considerations that are all important parts of the process.
It’s important to know your time frame for selling your home because that will determine how quickly the process needs to unfold. For example, in the event of a relocation your real estate agent will work with you to expedite the process so you can wrap things up as quickly as possible. On the other hand you may be an empty nester and have the flexibility to time the market and list your home when it’s most favorable for you.
Having a real estate professional on your team is invaluable for having an accurate pulse on the current market trends. Their knowledge, experience and training have prepared them to help you determine the price, find the appropriate financing, and provide information as to what the competition is doing. It’s important that you stay current during the entire process as the market changes regularly.
Maximizing Your Investment
For most of us our homes are the single biggest investment we will make and the largest line item on our net worth balance sheets. It’s important to have a clear understanding of your current financial situation as well as your future potential. Your real estate agent can help guide you through this by preparing a detailed estimate of the potential proceeds from your sale. They can also assist with tax savings and estate planning opportunities to consider. After all, your goal is to maximize your return on your investment to it’s fullest potential.
Technology And The Home Buying/Selling Process
No one can dispute the impact that technology and the internet have had on the home buying and selling process. When you marry technology with the right real estate professional you have put yourself in the best possible position to achieve your goal. Here are a few facts to consider:
- According to a recent study done by the National Association of REALTORS®, 92% of all buyers have used the internet for their home search.
- 95% of those buyers used a real estate agent/broker to actually purchase their home.
- Only 2% purchased their home directly from the seller.
- Buyers depend on their real estate agents to; Find the actual home they will buy 53%, negotiate the terms and sales price 48%, and to understand the overall buying/selling process 60%.
Choosing An Agent
Why Not Sell My Home Myself?
This is certainly a tempting option, but there are some compelling reason’s to work with a licensed Real Estate Professional. Nobody is going to know the market conditions better than the agent who’s working within that market day-in and day-out. The market changes daily and it’s extremely important to keep your pulse on it so you don’t get out sold by your competition. Real estate transactions are complex and involve multiple players in the process and there are detailed financial and legal issues to be addressed. A mistake in any of these areas could cost you money. Your real estate agent, through their marketing channels, has the ability to reach millions of potential buyers and manage the process for you. Last, but certainly not least, is safety. Your real estate agent works with only vetted buyers. These buyers have been prequalified and pre-screened. By working together we can insure that the buyer’s who visit your home are truly interested, qualified and their intentions are known.
Selecting An Agent
When selling your home, there are important things to look for when you are selecting an agent to work with.
- Ask about their credentials and education. Make sure they are a member of the National Association of REALTORS®. Member professionals represent the highest levels of training, knowledge, and ethics.
- Interview several agents; make sure they are knowledgeable about the area where your home is located.
- Ask for references and read reviews and testimonials written by past clients.
- What are the agents working hours?
- Does the agent have good listening skills?
- Does the agent respond in timely manner?
Most For Sale By Owners, (FSBO) tend to over price their properties. This generally happens due to incorrect pricing data on various websites and lack of market knowledge. Here are some facts to consider: The first 30 days that your home is on the market are critical. Sellers received $26,300 higher sales price when they use a real estate agent, only 8% of sellers successfully sell their homes on their own. It’s extremely important that you position yourself to win and not get beaten-out of the sale by your competition. A real estate professional can help you to be competitively priced while maximizing your return on your investment.
Getting Ready To Sell
"A picture is worth a thousand words". We've all heard that phrase before, and when positioning your home to sell, it's an important part of the process.
Make sure your landscaping is in tiptop shape. Clean out over-grown flower beds, put down fresh mulch if needed, and trim the scrubs. Think about adding some flowers to give a pop of color. Make sure your front door looks great. Give it a fresh coat of paint if needed.
Walk your property with your real estate agent and make a "punch list" of things that need immediate attention. Remember, you will go through an inspection as part of the sales process and you want to position yourself to pass. Make sure everything is in working order. Maybe you want to consider some upgrades to enhance the home's appeal. Only do things that make since to do and that will give you a return for the expense. Paint, polish or replace whatever needs some attention.
Setting The Stage
There's a psychology to selling your home successfully. You want to help the potential buyers to see themselves living there. Remove clutter, have your carpets and windows cleaned. Make sure the home is light and bright. Paint the rooms a neutral color. Consider having the home professionally staged if needed. Also, remove as many personal photos as possible. You want the buyers to envision themselves living there. Remember the psychology behind the sale.
When listing your home for sale you will be required to complete a disclosure statement about the condition of the property. Nothing but complete honesty will do here. There are legal consequences for false statements. Your real estate agent will be able to assist you with completing all disclosure statements concerning your home.
Showing The Home
Now that your home is in selling shape it's time to show the property to potential buyers. This is a great time for you to get away. Go see a movie, take a walk in the park, or visit the zoo. It's the job of your real estate agent to show your home. Data reveals that buyers are most comfortable talking with an agent about the property when the owners are not present.
Receiving An Offer
Negotiating The Price
So you have received an offer maybe several and it's time to evaluate them. The first rule to stick to is do not get drawn in by the "highest price". It's tempting, but this is a common mistake that happens, but by being informed you can avoid this pitfall. There are many components to an offer so you are looking for the overall best offer. The initial price is generally not the final offer. This is where your real estate professional can be a real asset. They negotiate transactions like yours everyday and will be able to guide you through the process.
Reaching An Agreement
Once you have accepted a buyer's offer you enter into a legal agreement with that buyer for the sale of the property. Again, having a real estate professional on your team will be big help. Many states have different laws and knowing those laws is extremely important in order for the agreement to be legally binding. You will need to know if "consideration" is required in your state. If so an initial deposit will need to be paid by the buyer and held in escrow by the closing agent until all conditions or contingencies outlined in the agreement are met. Remember to keep written records of everything and stick to the schedule. This will ensure a smooth transaction and help you close on time.
Appraisals, Inspections and Escrow
It's standard for the buyers to have the property inspected by a licensed property inspector. In your agreement you will both determine a time frame for inspections to take place. Occasionally the buyer may wish to have specialized inspectors look things over. For instance an inspector who specializes in A/C, roof, or perhaps a seawall.
The property is appraised if the agreement is conditional based on financing. The lender will have a licensed appraiser look at the property to determine and validate the value of the property. The lender will do this to confirm that their investment in the property is correct. NOTE: If the property is a commercial property, than an environmental audit may be required by the lender.
The Closing Agent
This is where the closing agent comes into the picture. Either a title company or an attorney will be chosen to carry out this part of the process. Their job is to investigate and confirm that the title to the property is clear. Their research will determine if the title is "free and clear" of any encumbrances. Examples of encumbrances are; mortgages, liens, restrictions, and leases. They will also make sure that any new encumbrances are noted and included in the title. It's important that all of this is resolved and completed by the closing date. The closing agent also holds the buyers escrow deposit.
It's common for buyers to include a contingency in the contract that says the contract is binding if the home passes inspection by a licensed property inspector. The objective of the buyer is to determine the condition of the property. You can expect inspections of; roof, electrical, pool/spa, mold, lead paint, HVAC, property boundary survey, termite/pest, fireplace/chimney, septic, well and structure. The buyer will also be reviewing all necessary documents and title reports at this time. They will also be obtaining their insurance and financing for the property.
Two Possible Outcomes To Inspections:
- The property passes with flying colors and there are no contingencies to address.
- The inspections uncover needed repairs or defects that need to be addressed. The buyer can request to renegotiate the terms of the contract and ask for concessions from the seller.
If contingencies arise, this is where your real estate professional can help you renegotiate the contract. Remember your agent has experience and specialized training to help you navigate through any issues that may come up.
Pre-Approval Vs. Pre-Qualified
You have decided to sell your home and invested valuable time getting it in listing shape. It's important that you work with buyers who have been pre-approved by their lender. A buyer who has a lender's "pre-approval" in a written letter or loan commitment is a serious buyer. A buyer who has only a "pre-qualification" or no documentation from a lender is not in as strong of a buying position. Again, this is where having a real estate professional working with you can help you save valuable time.
Congratulations, you have made it to the closing. There are only a few more steps that need to be completed at this point in the process.
Final Inspection And Walk Through
The buyers and their agent will do a final inspection and walk-through of the property. This usually happens the day before or day of closing. The purpose is to do a final review of the premises to insure that repairs have been completed; everything is in working order, the property is in good condition, and that any items that were to be removed have been removed. Also, any items that were to come with the home for example, washer and dryer or refrigerator are present. Your job as the seller is to make sure all agreed to contingencies have been addressed. Make sure you have removed all of your items from the property and it's always appreciated when the home is left clean.
You will want to make sure that you have contacted your utilities and service providers and either discontinued service or redirected those services to your new home. It's important that this be done prior to closing.
Planning For The Unexpected
We all want things to go smoothly. Unfortunately, sometimes there are unforeseen "issues" that can happen. That's where having your real estate agent at your side really pays off. We have no doubt had to handle unforeseen "issues" before and have the skill, experience and resources to effectively and efficiently get you through anything that may arise.
Your closing agent will provide everyone with a settlement statement. This is a summary of the financial transaction taking place for the property. The summary will be reviewed by all the parties then signed by the closing agent, buyer and the seller. Depending on what you have agreed upon, the buyer will either bring a certified check to the closing or have made arrangements for a wire transfer of funds to a bank account designated by the seller. Please make sure to bring all keys, garage door openers, etc. with you to the closing.
Congratulations on your successful sale!