With all of the complexities of the current market, this Guide can only supplement the help of an experienced and trusted real estate professional who, when you decide to sell, will be able to provide you with expert consultation at each step of the sales process.
Why Choose a Real Estate Agent when selling?
In becoming a real estate professional, an individual must complete a variety of courses and regularly update their professional education.
On top of all that, through experience, they truly become local real estate market and community experts, as well as masters of property marketing, networking and negotiation.
In working for you, a real estate professional will:
- Help you determine the best asking price
- Extensively market your home in order to maximize the number of buyers who know about it, request showings and make offers
- Offer proven advice on how to prepare and show your property so you get top market value for it
- Regularly communicate with you to keep you fully informed of everything they do to sell your home
- Provide feedback from all showings and open houses
- Update you on both real estate and money market changes that could affect your property’s sale
- Be available to help pre-qualify potential buyers
- Promptly present and evaluate each offer with you
- Negotiate the highest possible price and best terms for you
- Manage contractual, title and transaction details and keep you informed
In short, they’ll provide you with comprehensive, high-quality service. So when you decide to sell your home be sure to take advantage of the knowledge, experience and professionalism of a real estate professional.
Preparing your home
When presenting your home to prospective buyers, first impressions are crucial.
Buyers begin judging your home the moment they see it and, unless they’re looking for a deal on a fixer-upper, they prefer homes that are well-maintained, clean and clutter-free.
That’s why home improvements, particularly if they address the anticipated needs of buyers, can boost your home’s saleability and sale price.
Depending on your home’s condition, there are three kinds of improvements that will impress buyers and help you sell for top market value: renovations, upgrades and repairs, reorganization and maintenance. Along these lines, what follows are a few proven, cost-effective ideas that will help your home look its best so you get top market value.
Bear in mind, an experienced real estate professional knows what today’s discerning buyers are looking for and can provide more ideas that will maximize your home’s appeal. Sometimes a small investment in time and money can give you a big edge over your competition and generate a faster sale at a higher price.
Renovations – which ones are market-smart? Generally, few home owners renovate their homes in order to sell them because they know they won’t recoup the full cost of the renovations in the sales price. However, in some cases minor renovations can really improve the overall impression of a property’s
Small upgrades and repairs can make a big difference There are few things that put buyers off more than viewing a home that screams of being uncared for. If you want to maximize your chances for getting top dollar, you might need to make some minor upgrades, but you’ll definitely need to make all necessary repairs – even those that are “out of sight, out of mind”.
Leaving aside major structural and functional matters, here are a few relatively minor upgrades and repairs that can go a long way to improving how buyers perceive your home:
- Fix or replace anything damaged or worn flooring, leaking sinks or toilets, squeaky doors, lighting, loose caulk, windows, shutters, screens, storm doors, light fixtures, porches and steps, walkways and fences
- Touch up all exterior and interior paint or if needed, re-paint the house.
- Clean or paint front door, polish front door hardware, replace “Welcome” mat if necessary
- Green-up dry lawn patches, plant extra flowers for color, place potted plants beside the front door
- Shampoo carpets and rugs, replace if necessary
- Make sure major appliances are in good working order
- Replace switch and outlet plates and register vents with more elegant ones
- Add closet organizers or shelving to make closets more functional and spacious looking
Reorganization and maintenance – the obvious that needs doing.
Similar to necessary repairs, basic reorganization and maintenance tasks are “must-dos”. While buyers might not notice such work when it is done, they’re sure to notice when it isn’t. This impression of neglect will make it more difficult for them to comfortably project themselves into your home’s living space.
Here are a few reorganization and maintenance tasks that can improve your home’s curb appeal and inside homeyness.
- Clean sidewalks and driveway, remove any litter
- Remove unnecessary items from the exterior of the house
- Power wash the porch, siding, deck and patio
- Clean off your outdoor furniture and remove any in poor repair
- Clean your air conditioner
- Clear out the garage of everything but cars.
- If you have a pool, make sure it’s clean and functioning well.
- Clean and tidy the entrance, clear stairs and halls
- Create space by storing all excess furniture
- Organize kitchen counter tops, removing some appliances if necessary, to make them look as spacious as possible
- Thoroughly clean everything in and out of sight
- Remove all odors and add air freshener, dishes of potpourri, etc. for scent
A few words about clutter For most buyers, cluttered homes tend to appear smaller, less full of air and light, and somehow requiring of more maintenance. Conversely, clutter-free homes generally seem brighter, more open and spacious, perhaps cleaner and requiring of less work. Additionally, clutter-free homes can make it easier for buyers to visualize their own interior design ideas, as well as the placement of all their belongings.
While you may have many beautiful and meaningful belongings, they might make it more difficult for you to sell and cost you thousands of dollars when you do.
Pricing your home
Determining the best asking price for a home is one of the most challenging, and also important, aspects of selling it.
In fact, it’s a balancing act. You don’t want to set a price that’s so high that it discourages showings and serious offers from the very qualified, motivated buyers who would ultimately determine your property’s top market value.
On the other hand, you don’t want to set a price that’s so low that it attracts lots of interest, but sets the stage for offers and negotiations that could result in your getting less than the market would actually support if you were a little more aggressive.
So what’s your home really worth? In a perfect world, your home’s value would be everything you think and need it to be. Perhaps you have specific financial goals or you’ve just made an offer on another home that’s is dependent on selling your home at a certain price in a given time frame. However, simply put, your home’s value is not determined by you or a Real Estate agent, but by what the market is willing to pay for it at a given time.
Get a comparative market analysis (CMA) from a real estate professional
A Comparative Market Analysis (CMA) is a document, drawn from a local Multiple Listings Service (MLS) database, that presents pricing information, property details and photos of homes similar to yours (termed “comparables”) that recently sold, failed to sell, or are currently on the market in your area.
A real estate professional will typically provide you with a CMA as part of a listing presentation he or she delivers at your home in hopes of being able to exclusively represent your interests when you sell. This CMA will include the price or price range that the real estate professional thinks you should list; although the real estate professional might adjust that figure on the spot if it’s the first time he or she has been in your home and had the chance to examine its layout, quality, workmanship, condition, and so on. (It’s also worth noting that real estate professionals, knowing that you don’t plan to list any time soon, are also usually happy to provide you with a Free Market Evaluation or “mini-CMA” of your home).
Generally, studying what has worked in your area – and what hasn’t – will help you to strategically price, position and stage your property so that it sells for top dollar in a reasonable time frame, with the least inconvenience for you.
Price your home to sell when its market exposure and buyer interest are highest
In a purely numbers sense, how you price your home will directly impact how many buyers, showings and offers you attract. However, the practical dynamics of attracting those qualified, motivated buyers who will pay top market value for your home is a little more complex. That’s because experience shows that you’re far more likely to get top market value if you sell your home during a certain “golden window of opportunity” during the listing. In short, timing is crucial.
Homes generally attract the most interest and activity among buyer prospects and their agents during the first to fourth weeks they’re on the market.
Beyond five weeks, your home will increasingly be viewed as a stale listing – i.e. as a commodity with a history of being rejected by other buyers. Consequently, there will be less market buzz, less showings, less offers and less likelihood that you’ll get your asking price.
This is why it is crucial to price your home correctly right from the beginning so that you get and accept a solid offer during the three or four week “golden window”.
The consequences of overpricing at the time you list
The strategy of overpricing your home when you list, knowing that you can reduce the price later, might seem to make sense at first glance. However, it seldom works. In fact, sellers who overprice their homes – even just 10% above market value – and then reduce the price one or more times often end up getting less than they would have if they’d priced it realistically from the start.
- Fewer buyers – even if they’re otherwise attracted to your home – will respond to the online and offline marketing of it if they know it’s overpriced.
- Fewer agents will show your home to their buyers if they know it’s overpriced.
- The right buyers looking to buy a home like yours – may never even view it because they’ll confine their search to a lesser price range where yours should be.
Even if you do get a serious offer, the excessive price can lead to a mortgage rejection for the buyer once the lender has a professional appraisal done on your home. This leads to critical lost time waiting for finance approvals that never go through.
The bottom line: realistic pricing is strategic pricing!
If you do so, you’ll not only attract more buyers, you’ll attract the right buyers: qualified, motivated and willing to pay top market value for your home at the very time during the listing when you’re most likely to get it.
Effectively Marketing Your Home
The successful marketing of a home is a multi-faceted process that includes nearly every activity involved in getting it sold.
In fact, marketing encompasses just about every topic covered in this Guide – home preparation, pricing, presentation and even negotiation, as well as strategic advertising and networking.
How buyers find out about homes for sale As we’ve seen, strategically preparing and pricing your home are master keys to attracting serious, financially-qualified buyers. However, in order to maximize the impact of these preparation and pricing strategies, your home needs to be effectively exposed to the marketplace through a variety of advertising media.
Currently, the internet (including syndicating to 30 plus real estate professional websites, social media, blogs, etc.) and direct contact with real estate professionals are far and away the main sources of home information for buyers at 90% . Other sources are yard signs, open houses, and home builder’s clients not wanting to build.
Buyers are flocking to the web The internet is revolutionizing real estate advertising. Clearly, your real estate professional needs to have an internet marketing strategy in place to target these desirable and more market-informed internet buyers. Here’s what discriminating internet buyers look for most on real estate websites:*
98% – Property photos (plenty of them)
98% – Detailed information about properties for sale
78% – Virtual tours
78% – Real estate agent contact information
78% – Neighborhood information
This means that your real estate professional should have a compelling web presence where buyers are known to go online for real estate information. In addition, the internet marketing
* National Association of REALTORS® Profile of Home Buyers and Sellers, 2012
Marketing plan should include emphasis on information rich sites that offer lots of property details and photos, virtual tours, community and school reports, and mapping.
Also, because today’s demanding internet buyers often expect a fast response to their online requests for property information (many within an hour), experienced and internet-savvy real estate professionals need an efficient system in place for managing web and email inquiries.
Marketing your community as well as your home Real estate industry surveys have repeatedly found that neighborhood quality is the most important reason why home buyers choose where to live. In fact, experience shows that buyers usually “buy” an area first, and are often willing to pay a premium for homes there.
That’s why it’s crucial to highlight your community’s amenities – like proximity to quality schools, restaurants and shopping, local parks and attractions, as well as other benefits that impact on lifestyle.
Real estate professionals have access to the kinds of detailed community and school information that today’s buyers are looking for, and they are highly capable of portraying the relationship between the value and benefits of your community and home together.
A comprehensive approach to showcasing your home and community in the marketplace While the internet is now the real estate information source of choice, if you want to maximize the number of serious buyers, showings and offers you get it is necessary to employ a broad spectrum of advertising in a coordinated manner. Real estate professionals have a wide range of options for maximizing a property’s exposure to the marketplace, including:
- Multiple Listing Service (MLS)
- Syndicate 40 plus popular real estate websites
- Company website(s)
- Personal website(s)
- Social media sites like Facebook® and Twitter®
- Notifying potential buyers and referral sources in their database
- Open houses
- Direct mail and email campaigns
- Home Highlight info to all agents in their company’s local offices
- Notifying the area’s top real estate professionals
- Real estate professional tours
- For Sale sign
- Networking within the local community
Such extensive market exposure will not only generate more interest from motivated buyers. It will also ensure that you don’t sell your home to just any buyer, but to the right buyer – the one who fully appreciates what they’re buying and will pay top dollar for it.
Showing Your Home
Having invested in some of the effort and expense of preparing your home to sell, you’ll certainly want it to take full advantage of it when you open up your property to prospective buyers and other agents during open houses, agent tours and showings.
That’s why making sure your property looks its very best can give you that little extra competitive edge that will help get it sold.
Keep in mind that many real estate professionals have, through education and experience, mastered the art of home staging. Make the most of their skills – and impartiality – to create that “buying feeling” in your home.
Time-Proven Tips For Showing Your Home Here are a few ideas that will help you maximize your home’s attractiveness to buyers:
- Ideally, you should be absent so buyers feel comfortable making comments
- Make sure your home highlight sheets are easily visible
- Open all drapes and shades during daylight hours to let in as much light as possible, but screen out unappealing views
- Light the whole house, especially dark corners and hallways
- Showcase your home’s best features
- Turn off the television. Play quiet background music
- If you’ve repainted in neutral tones, add bold splashes of color (with throw pillows, crockery, pictures, etc.)
- Place fresh flowers where they’ll stand out
- Open all doors between rooms to give an inviting feeling
- Pick up toys, remove all clutter, ensure beds are made, clothes put away
- Floors should be clean, carpets and rugs vacuumed
- Trash and recycling bins should be tidy and odor -free
- The kitchen & bathrooms should sparkle
- If possible, bake cookies or put a pan of cinnamon in the oven to create a warm and inviting aroma
- Ideally, pets should be unseen. Pet areas should be clean and odor-free. Not everyone may share your love of animals, and some may be allergic to them
- Lock away and hide all cash, jewelry and small valuables
Important: keep your home available — and ready — for showings Particularly during the first weeks after you list your property, real estate agents from many firms will want to show it to their buyer clients. It is especially important during this window of opportunity, when interest will be at its highest, that you make your home available for showings, preferably at the time requested by the buyers’ agents. Occasionally, this may pose an inconvenience for you but, you’ll certainly want to maximize the number of qualified, motivated buyers who see your home. Indeed, doing so just might make a big difference in when you sell, for how much and under what terms.
You should consider allowing your real estate agent to place a lockbox on your door. A lockbox is a device that enables the buyer’s agent to enter a specified code in order to open the door, in lieu of not having a key.
Along these lines, you should do your best to ensure that your home is ALWAYS ready to be shown. You never know when the right person is going to look at it!
Negotiating the deal
With rare exception, negotiating the transaction is the most complex part of selling a home. At the same time, it’s the one that can involve the most creativity. That’s why it’s important to have an experienced and savvy real estate professional who has successfully worked through many different transaction scenarios.
What follows is a brief description of the negotiation process and a few strategies for negotiating the best possible deal you can. This includes: keeping in mind your situation, priorities and needs, not giving your situation away to the buyer and buyer’s agent, trying to understand and respect the priorities of the buyer, being creative and, where necessary, willing to compromise to get the deal done.
The basic process When a buyer, typically with the help of a real estate professional, makes an offer on your home they’ll do so using a contract that has been developed by your local real estate association in conjunction with legal counsel. These contracts enable the buyer to set a sale price, and also include many clauses for specifying various terms of purchase, such as the closing and possession dates, the deposit amount, and a variety of other conditions.
The buyer’s real estate professional will then deliver the offer to your real estate professional, who’ll present it to you. You should closely review every detail of the offer with your real estate professional, who’ll be happy to address all your questions about the offer and the process itself. You can then accept the offer, reject it, or counter it to initiate the negotiation process. Successive counter-offers, with deadlines for responding and meeting various contingencies and special conditions (e.g. a home inspection, the buyer securing financing), will be exchanged between you and the buyer until a mutually-satisfactory pending agreement is reached or the negotiations collapse.
Understand and respect the buyer’s priorities If, during the negotiations, you can find out more about the buyer ’s priorities you’ll not only improve your position, but you’ll also be able to resolve any obstacles more creatively and sensitively.
For instance, if a buyer is adamant about the sale price – perhaps because they love your property, but they’re at the limits of their available financing – they might be more flexible about the closing date or willing to make concessions about some other terms.
There are no “one size fits all” approaches to negotiating, particularly in the current market. In principle, though, the more you know about the buyer’s priorities, the more you’ll be able to work with them in order to achieve your own priorities.
Have you found the right buyer? If so, make the deal happen
- Remember your priorities and respect the buyer’s. Don’t let small things get in the way of your better judgment.
- Disclose everything. Smart sellers proactively go above and beyond legal necessity to disclose all known defects to their buyers. If the buyer knows about a problem, they can’t sue you later.
- Ask questions. Offers may contain complicated terminology, sometimes three or more addenda. Your real estate professional can help clarify everything for you.
- Respond quickly. When buyers make an offer, they are in the mood to buy. But moods change, and buyers are known to get buyers’ remorse. Don’t delay if you want the sale.
- Stay calm and be patient. At all times keep communication civil and agreeable, even if the buyer gets tense, or you might lose your sale.
- If necessary, defer until later. If small issues get in the way of big ones, focus on and consolidate your agreement on the big issues and come back to the small ones later.
- Take care with contingencies. When you’ve landed your buyer, your signed acceptance of a written offer becomes your sales contract. Except for removing any contingencies, this document is the binding basis for the sale.
- Rely on your real estate professional. It’s your agent’s responsibility to represent your best interests every step of the way. Your success is their success.
The reality is that most negotiations proceed without much problem. In the event that there are difficulties but you’re still committed to selling, remember: where there’s a will there’s a way.
Home Sold - Closing The Deal
If you and your buyer have both efficiently taken care of your respective contractual obligations associated with finalizing the sale, the process of completing the transaction – known variously as the “closing”, “escrow” or “settlement” – will go smoothly with no surprises.
A pending sales agreement nearly always includes contingencies and special conditions that have to be fulfilled by the buyer and seller by the closing date, which usually falls 30 to 60 days after both parties, signed the agreement.
Typical contingencies and conditions may include:
- The buyer’s securing of financing
- A Title Search – an historical review of all legal documents relating to ownership of the property to ensure that there are no claims against the title of the property
- The purchasing of Title Insurance in case the records contain errors or there are mistakes in the review process
- A professional appraisal of the home, requested by the lender to ensure that the home’s actual value justifies the loan amount
- Any additional contractual promises you have made in connection with buyer incentives, home improvements, etc.
- An independent inspection of the home’s structural and functional condition (foundation, roof, electrical, heating, plumbing, etc.)
- An independent termite inspection
- A final walk-through – the buyer is given the chance to look a t the home to make sure that it’s in the same condition as when the sale agreement was signed
It’s important to review the sales agreement with your real estate professional so you understand your obligations. Any shortfalls or mistakes at this point can be very costly.
Your real estate professional can discuss and remind you of these obligations, as well as help arrange for their fulfillment and prepare you for the closing.
Completing the transaction
While different areas handle the final settlement in slightly different ways, generally the closing agent – a third-party professional conducts the proceedings – reviews the sales agreement and does the following:
- Determines the total amount due from buyer and collects the check
- Determines all the adjustments (e.g. seller prepayment of taxes, utilities, etc.) and ensures that they’re factored into the transaction
- Assures that the transaction costs (closing, legal fees, etc.) are paid
- Determines the seller’s payments, credits and adjusted net proceeds
- Witnesses the seller’s signing of the property title and all other documentation associated with the transaction
- Collects the keys and any other necessary items from the seller
- Provides the seller with the net proceeds as well as copies of the documentation pertaining to the sale
- Ensures that buyer’s title is properly recorded in the local records office along with any mortgage liens
In most cases, the buyer’s Possession Date will fall within the Closing Date, at which point your former beloved home will have a new occupant.