Steps to Selling
1. Prepare to sell your house
Millions of existing homes are sold each year and, while each transaction is different, every owner wants the same thing: the best possible deal with the least amount of hassle and aggravation.Home selling has become more complex than it used to be. New seller disclosure statements, longer and more mysterious form agreements, and a range of environmental concerns have all emerged in the past decade.
More importantly, the home selling process has changed. Buyer brokerage, the process in which realtors represent home buyers, is now common nationwide and good buyer-brokers want the best for their clients.
The result is that, while hundreds of thousands of existing homes may be sold each week, the process is not as easy for sellers as it was five or 10 years ago. Surviving in today’s real estate world requires experience and training in such fields as real estate marketing, financing, negotiating and closing, the very expertise available from local realtors.
2. Find a Realtor
In the maze of forms, financing, inspections, marketing, pricing, and negotiating, it makes sense to work with professionals who know the community and much more. Those professionals are the local Realtors who serve your area.
Before placing a home on the market or setting out to find the perfect new home, you should identify realtors (such as those from Concur Realty) in your community who can assist with the sale.
Why Use a Realtor?
Concur Realty adheres to a strict code of ethics. Our local Realtor group is active in community service, economic development, local politics, and other neighborhood organizations.In essence, Concur Realty realtors are the community experts. They track real estate trends, share neighborhood concerns and participate in local matters. They’re good neighbors who are in the business of helping others buy and sell homes.
How Do You Choose a Good Realtor?
Buyers and sellers have different needs. In some cases, sellers elect to meet with one Realtor, while a buyer might elect to test a couple of agents before deciding to work with one exclusively.Whatever your preference, there will be a number of questions you will want to ask:
- What services do you offer?
- What type of representation do you provide?
- There are various forms of representation in different states. Some brokers represent buyers, some represent sellers, some facilitate transactions as a neutral party, and in some cases different salespeople in a single firm may represent different parties within a transaction.
- What experience do you have in my immediate area?
- How long are homes in this neighborhood typically on the market?
- Be aware that because all homes are unique, some will sell faster than others. Several factors can impact the amount of time a home remains on the market, including list price, changing interest rates and local economic trends.
- How would you price my home?
- Ask about recent home sales and comparable properties currently on the market. If you speak with several Realtors and their price estimates differ, that’s alright—but be sure to ask how their price opinions were determined and why they think your home would sell for a given value. Request a written Comparative Market Analysis (CMA), as well.
- How will you market my home?
- At listing presentations, brokers will provide a detailed summary of how they market homes, what marketing strategies have worked in the past and which marketing efforts may be effective for your home.
- What is your fee?
- Brokerage fees are established in the marketplace and not set by law or regulation.The commision is the agent’s rate for handling your transaction. Ask if there are other fees you will have to pay such as a early cancellation fee, marketing fee, MLS fee or any other cost that is not included in the commission rate.
- What disclosures should you receive?
- State rules require brokers to provide extensive agency disclosure information, usually at the first sit-down meeting with an owner or buyer.
What Should You Expect When Working With a Realtor?
Once your home is listed with a Realtor, he or she will immediately begin to market your home according to the most appropriate conventions for your community. A Realtor keeps you informed as the marketing process unfolds and as expressions of interest are received.Be sure to specify how you would like to communicate. Some clients prefer emails while others only want to be called or have in-person meetings. Whatever your preference, it is best to outline those expectations upfront so everyone is working with clearly-defined objectives.
The same is true for buyers. Because buyers are constantly meeting with their agent to see properties and give feedback on the properties they’ve already seen, communication is important. If you like to communicate via text message, let your agent know. All forms of communication are not acceptable to everyone. Make sure you have an agent who communicates with you in a way you find acceptable.
Every client should expect professionalism. That means a Realtor will always expect you to be on-time, and you should expect likewise from a Realtor.
Remember, the Realtor is your advocate in the transaction, whether you are buying or selling. Once you have signed up with an agent to represent you, he or she is your face, your voice and your defense against all involved in the multi-layered home buying or home selling process.
3. Set the list price of your home
Several factors, including market conditions and interest rates, will determine how much you can get for your home. In other words, home selling is part art, part science, part marketing, and part negotiation.
If you’re putting your home on the market, especially if you live in an area where prices are going up and buyers are competing for homes, you may be tempted to try listing it at a high price just to see if you can get it.
Don’t do it.
Experienced Realtors will tell you that pricing your home appropriately from the beginning is critical to getting it sold quickly and at the best price. Research shows that overpricing your home and then dropping the price several times while it languishes on the market usually leads to selling it at a much lower price than what you originally should have asked for it. The longer a home stays on the market, the deeper the discount is likely to be off the original price.
For example, according to McEnearney Associates, a McLean, VA, real estate company, homes that sold in August 2013 within their first week on the market sold for an average of 2.08 percent above list price. Homes that lingered on the market for four months sold for an average of 11.53 percent below their original price.
How to price your home correctly
Many homeowners want to set their list price based on what they paid for their home, the balance of their mortgage, or on the profit they want to make so they can move into another home. In reality, your home is worth only what the market will bear. If you price your home too high, some potential buyers won’t want to look at it at all, while others will simply walk away without making an offer.
If you’re interviewing several Realtors to choose a listing agent, you may be tempted to pick the sales professional who suggests the highest price for your property. But sellers, like buyers, need to beware. The Realtor who provides the best comparative market analysis and explanation of how your home should be priced will be more likely to sell your home quicker and for a higher price than someone who tells you only what you want to hear.
A comparative market analysis should include sales prices for similar nearby homes that sold in the last month or two. In addition, many Realtors include prices for homes currently on the market that will be your competition, as well as homes taken off the market because they didn’t sell. Other data Realtors can use to suggest a price range include how many days homes were on the market at various price points and the average difference between the list prices and sale prices on homes that have sold.
Your Realtor can help you estimate who might want to buy your house and what else those buyers are looking at so you can measure your price against the competition.
A knowledgeable Realtor can factor in all of these issues in the context of your local market conditions, including whether home prices are rising or falling and whether it’s a buyer’s or seller’s market.
Choose the right professional to help you with your home sale and then listen to your Realtor’s advice and your transaction is more likely to go through quickly and smoothly from the beginning.
4. Market your house for maximum exposure
Your Realtor should share a marketing plan with you, but the more you know about the process of selling your home the easier it is to support your Realtor’s efforts. Make your home sell fast with these tips.
Once you’ve made the commitment to sell your home, chosen a Realtor to represent you, and established a list price, it’s time to work with your Realtor to market your property so it sells as quickly as possible.
Your REALTOR® should share a marketing plan with you, but the more you know about the process of selling your home the easier it is to support your Realtor’s efforts.
The day your home goes on the market it should be in prime condition and priced right to attract the most potential buyers. While your Realtor can help you determine an appropriate price and can offer suggestions to make your home more appealing, your job is to put in the work to get your home pristine clean and to remove clutter and personalization.
Buyers want to see a home where they can visualize themselves living. If buyers see an overstuffed closet, they’ll assume the home lacks storage space; and if your kitchen counters are cluttered, they’ll think the space is too small.
Provide your Realtor with tips about what you love best about your home and community that can be incorporated into your marketing materials.
Your Realtor can advise you on what you need to repair before putting your home on the market. You can also visit other homes that are for sale, or even local model homes for ideas on ways to present your home to potential buyers.
What to Expect From Your Realtor
Many Realtors have experience staging homes, or they can bring in a stager to rearrange your place. In addition, your Realtor should market your home in multiple ways:
- Research the market to identify potential buyers to target for direct mail.
- Reach out to other real estate brokers and agents who work with buyers in your price range.
- Take excellent photos or hire a professional photographer to showcase your home online with attractive pictures.
- List your home on the local Multiple Listing Service and make sure it receives maximum exposure on multiple websites.
- Take a video of your home or produce a virtual tour with numerous photos so your home can be viewed in-depth by buyers looking online.
Once buyers begin visiting your home or contacting your Realtor, your agent should respond as quickly as possible to keep the momentum going. Every visitor to your home or their agent should be contacted by your Realtor to get feedback on your home and to gauge their interest.
What Your Realtor Should Expect From You
While your Realtor does the heavy lifting when it comes to marketing, as a seller you need to support your Realtor in several ways:
- Keep your home as clean, neat and odor-free as possible while your home is on the market. This may mean that you have to give up cooking your favorite liver-and-onions dish and that you have to bribe your kids to make their beds and take out the trash every day.
- Make your home as available as possible to buyers, no matter how inconvenient it is for you and your family. Your home won’t sell if no one can see it.
- Leave the house when buyers are there, since studies have shown that buyers linger and look more carefully when the homeowners aren’t present.
- Lock up your pets or take them away when buyers are visiting, especially during an open house when multiple visitors are expected.
- Provide information to buyers about community amenities or neighborhood sports leagues so they can appreciate your home’s location.
If you and your Realtor develop a team approach to selling, you’ll benefit from a quicker and more pleasant real estate transaction.
5. Negotiate a real estate offer
Perhaps the most complex moment in the sales process comes when you get an offer for your home. Whether you have one offer or several to consider, these tips will help you navigate the negotiation.
Home sellers who have chosen the right Realtor, prepared their home for sale and priced it right are strongly positioned for a smooth real estate transaction, but perhaps the most complex moment in the sales process comes when you get an offer for your home.
Whether you have one offer or several to consider, you should take a moment to congratulate yourself that you’ve got a buyer interested in purchasing your home.
How to Evaluate Purchase Offers
Ideally, the potential buyer or buyers have offered you full price or more, along with the perfect terms for the sale. However, the reality is that not every offer will be immediately acceptable. You’ll need to carefully evaluate each offer and begin a negotiation with the buyers and their agent.
Your Realtor should be your partner and educate you on the terms of the offer and help you understand the offer in the context of the housing market in your area. You will need to know whether you’re in a balanced market with equal numbers of buyers and sellers or one in which buyers or sellers have the upper hand. You’ll also need to estimate whether home prices are rising or falling in your community.
Before you begin to analyze any purchase offer, the most important step is to determine whether the buyer can fulfill the terms of the contract with financing. Your Realtor can check on the pre-approval letter that should be included with any offer by consulting with the buyer’s agent and the buyer’s lender.
What Factors Should You Consider in a Purchase Offer?
Once you know the buyer can legitimately qualify for a loan, you should begin to evaluate the offer by looking at these factors:
- How close is the offer to your asking price?
- Will your home appraise for the contract price?
- How large is the earnest money deposit that accompanied the offer?
- Has the buyer asked for assistance with closing costs?
- Has the buyer asked you to make repairs or to give a credit for home improvements?
- Is the requested settlement date appropriate for your needs?
If you’re not immediately satisfied with the offer or are uncertain about whether to accept it, consider your options:
- Are there other offers?
- Can you wait for more offers to come in?
- How will you handle it if no other offers come in after a particular deadline?
Making a Counteroffer
As a seller, you have the options of accepting the offer as is, declining the offer, or making a counteroffer. Your Realtor can give you specific advice about your negotiating stance based on your home and your market, but generally you will need to be prepared to compromise on some aspect of your home sale.
Your negotiations can go more smoothly if you have a clear sense of your own priorities, such as a particular settlement date, the ability to rent-back your home from your buyers, or a minimum price that you need to achieve to meet your financial goals. Your Realtor should have prepared a document showing you net proceeds at different sales prices that can make it easier to understand the value of different offers.
Negotiations proceed best when both you and your buyer respect each other’s needs and interests and come to an appropriate compromise with the help of your Realtors.
When you have a signed contract with the buyer for your home, you may feel as if you can breathe a sigh of relief. While it’s certainly true that you can lighten up on the perfectionism required to show your home at any moment, as a seller you still need to cooperate with your buyer, the buyer’s agent and the commitments made in the contract.
In other words, before you can completely relax you need to get to the settlement table.
Contingencies and Sellers
While the burden is on the buyer to finalize financing for the home purchase and to obtain homeowners insurance, some contract contingencies will impact you, too, especially if you’re living in the home. Most transactions include a home inspection, so you’ll need to make your home available to the inspector and then negotiate with the buyers about anything the inspection turns up according to the terms of your contract.
Besides the home inspection, some contracts and some lenders call for a termite inspection and a radon gas inspection. In each case, you or your listing agent or the buyer’s agent will need to make the home available for inspection.
Another important step prior to closing is the appraisal. If the appraisal comes in higher than the sales price, then the buyers can relax and be happy that they have purchased a home for less than its market value. Once the contract has been signed, you as the seller cannot renegotiate the price higher. However, if the appraisal comes in lower than the sales price, then the buyer’s lender will limit the loan amount to that lower value. The buyer may have to come up with additional cash to cover the financing gap or may ask you to renegotiate the contract. Your Realtor can advise you about the best way to handle this situation, but in any case you and the buyer are also bound by the contract terms.
Before you go to settlement, you and your listing agent should go over the contract and make sure you’re fulfilling all the promises you made in terms of what items will be conveyed to the buyer and any repairs or improvements you promised to make.
Buyers and sellers typically negotiate a settlement date that is mutually agreeable. If you have sold your home and are not yet ready to move into your next residence, you can sometimes negotiate a “rent-back” with the buyer that allows you to stay in the home after the settlement by paying rent to the buyer.
Alternatively, some sellers allow the buyers to move in before settlement. In either case, it’s crucial to have a written agreement about who is responsible if something happens to the house or its contents during the transition period. Generally, you’re restricted to a maximum rent-back of 60 days because lenders would require the buyers to finance the home as an investment property if the rental period is any longer.
The decision about who provides settlement (also known as closing or escrow) services varies from one market to another. In many places, the buyer chooses the settlement company, but in others the seller chooses. At the closing, the buyer will provide funds to buy your home and the settlement agent will review the sales agreement to determine what payments you’ll receive. The title to the property is transferred to the buyers and arrangements are made to record that title transfer with the appropriate local records office.
At a typical closing, adjustments are made to the final amounts owed by the buyer and you as the seller. For example, if you’ve been paying your property taxes through an escrow account, you may be credited extra for prepaid taxes or you may receive less money at settlement if the property taxes haven’t been paid properly.
Once the settlement papers are signed and the house keys are transferred, you’re free to move onto your next home.
Some of the activities required to sell your home can actually help with the moving process. For example, by cleaning out closets, the basement, and the attic, you will have less to do once the home is under contract.
Even the smallest home contains a lot of furniture, clothes, kitchen equipment, pictures and other items. For a short move, it may be worthwhile to transport small goods by yourself, but larger items will likely require a professional mover.
How Do You Plan a Move?
The time to plan your move begins once you’ve decided to sell your home. Some of the activities required to sell the home can actually help with the moving process. For example, by cleaning out closets, the basement and the attic there will be less to do once the home is under contract.
Your planning will be guided by a number of things:
- Are you moving long distance? If yes, you’ll likely require an interstate mover and the use of a large van.
- Moving internationally? Contact the embassy in Washington, DC, for information. Be aware that items which may be entirely common in the United States can be prohibited in foreign countries. Ask about customs protocols, duties and taxes.
- Moving locally? If yes, will you move yourself? You’ll need to consider packing boxes, peanuts, blankets or padding and a van rental.
- Planning is key: Stock up on boxes, packing materials, tape and markers. Always mark boxes so that movers will know where goods should be placed.
Which Mover Should You Use?
The decision of which mover to use can begin with a visit and discussion with the Realtor who is marketing your home.
There are a number of factors to consider:
- Cost: You’ll want to spend as little as possible, but choosing only on the basis of cost can be a mistake. Movers must have the right equipment, training and experience to do a good job. A mover, no matter how large or small, should be able to provide recent references for homesellers with a similar volume of goods to transport.
- Get mover estimates in writing: Be aware that it’s possible to get discounts through membership organizations and, sometimes, on the basis of your profession: Clergy, for example, sometimes qualify for a discount.
- Always confirm mover credentials: Movers should be licensed and bonded as required in your state, and employees should have workman’s comp insurance.
Get a Checklist
Moving is a big job and checklists can make it more organized and easier. Here are some of the major items to consider:
- Money: If you’re moving more than a few miles, then you should have enough cash or credit to cover travel, food, transportation and lodging.
- Medicine: Keep medications in a place where they will be available during the move.
- Number boxes: Make a list of boxes by number and indicate their contents. It makes it easier to count all boxes on arrival.
- Keep kids occupied: If moving with children, make sure that each has a favorite toy or toys, blankets, games, music and other items.
- Moving historic, breakable or valued items? Such goods routinely require special handling and packaging.
- Have address books readily available: In case you need help.