Deciding to Sell Your Home

Deciding to sell your home or even your second home can be difficult decision. It is often one that also involves various emotions. As you go through this process, it is important to consider your needs and motivations for selling. What is it that you are hoping to accomplish? Clarifying these will help you attain purpose and have a more successful and enjoyable selling experience.

Your motivations 

Has your family outgrown your current home? Do you want your kids in a better school district? Did you recently take a new job? Are you looking for a better commute? Did the neighborhood you live in not mature as you had hoped? Are you moving to another city or state? Did your financial position recently change?

While your need to sell might seem evident, if you think about it you may have additional underlying motivations as well. These are also important to discuss with your agent. The better we understand what is driving your decision the better we can help you achieve your goals. It is also important to consider the impact this decision will have on your lifestyle and your future.

Your Finances

You also will need to consider you current financial situation. What impact will selling your current home and potential purchasing another have on financial security and future goals? We provide an upfront and detailed layout of all the cost involved. We also can help you will potential tax and estate planning strategies. Our goal is to not just to help you save money today but also to help you structure your investment for a better tomorrow.

Your Timeline

You also should consider your timeline for selling. Do you have a contingency contract on a home you are purchasing? Do you need to sell quickly or are waiting for that perfect offer? We can review the current market conditions to help you decide when would be the most appropriate time for you to sell. We can also discuss the financial implications of moving up or down in the same market and how future market conditions and rates could be more or less favorable.

Market Trends

We provide the most accurate and up to date information available to help you make an informed decision regarding when to sell. While it is true that no one has a crystal ball, we do everything possible to help you take the stay in front of national and local trends. This way you can take the out guesswork out of the equation and know when to sell with confidence.

Deciding on Price

Deciding where to price your home can be a more difficult decision than most sellers think, and it is not one that you should take lightly. If you price you home to high it will stay on the market longer. Some sellers think this is okay because they are in no rush to sell their home. While that may be true, studies have shown homes that sit on the market often sell for less.

In today’s market, a buyer can easily see how many days your home has been on the market. Homes that sit on the market too long are less attractive because of buyer perception. Maybe there’s something wrong with it. They’re probably just asking too much.  It is human nature to question things that others pass up on.

The longer your home sits on the market, the lower the chances of you getting a respectable offer. Buyer activity usually peaks within the first 60 days, and with no additional change, activity tends to further diminish after the first 90 days. If you want to get the best offer, it is advised for you to price to sell within the first 100 days.

It is also important to remember a buyer does not have the same emotional attachment to your home as you do. They will be indifferent to any sentimental value you have for your home. Many homeowners fall into the trap of overestimating the value of their property because of how they feel. A professional will see your home through the eyes of a potential buyer and will help you set a fair and objective price for your home.

You also need accurate data. You should be wary of some of the popular national real estate websites. The information they provide is often inaccurate and based on less equivalent properties. You want verified data from the most comparable homes to one want to sell.

Your pricing decision should be based on what comparable homes actually sold for and not solely on what other sellers are asking. This can set an unrealistic expectation and diminish you marketing efforts. Often homes that ask for the most are the ones that get shown the least.

What Does a Prequalified Buyer Mean?

If you own a home, you probably have been through this process yourself. But what does being prequalified really mean? A prequalification is a basic screening for a potential borrower. It however is not a mortgage application. It can help rule out some people who want to buy your home but cannot due to their credit, income, or debt.

A prequalified buyer means a licensed mortgage officer has reviewed the borrower’s credit for red flags and verified the borrower has met minimum score requirements. They also use the debt listed on the borrower’s credit report and annual income to determine if they meet the established ratios for the specific mortgage program, rate, and terms. These are what determine how much they can potentially borrow.

A prequalification is great first step but no guarantee. Sometimes borrowers initially include overtime or other income that lender will not count. Sometimes they do not provide full disclosure because they do not understand why a certain detail is relevant. Sometimes a mortgage officer will notice a detail they missed the more detailed formal mortgage application.

As a seller things can happen that are out of you or your agents control. However, requiring a prequalification letter from a reputable lender is a good way to gauge a borrower’s ability to close the loan. If you are considering a cash deal, you should obtain a verification of funds.

Hiring a Home Inspector

You may also want to consider a home inspector to find out if your home needs any repairs beforehand. Most buyers are going to require this as part of the contract anyway. Most of the companies who do this are extremely thorough. If something has gone bad or is on its way out, chances are they are going to find it. Even if it is something you are not going to fix it, you can still disclose it to would be buyers.

If their home inspector finds an issue you could or should have been aware of, it may put doubt in a buyer’s mind. Nothing is worse than looking like you may have been trying to hide something. I wonder what else they are not telling us. If they didn’t do… what other maintenance should we be worried about? Some issues might also give a buyer an easy out of the contract if they are looking for one already.

Preparing Your Home to Sell

If you want to sell your home for top dollar, there are a few things you can do to better your chances. Some sellers believe prospective buyers should be able to look past unkept home or minor repairs. In a way they have point, the prospective buyers are looking a used home.

However, most buyers want to purchase a home they feel has been well taken care of. Think about what other products you might purchase pre-owned or refurbished. Would you consider a car that is dirty and in need of maintenance?

Curb Appeal

Maybe you would … but if what? If it was a good deal, right? Selling a home is no different. The homes that sell for most are typically the ones that look the best. The following are a few simple and often inexpensive steps you can take to increase your chances of getting the most for your home.

Repairs

You should also consider small upgrades and repairs. Simple things such as paint touchups, window treatments, or replacing worn out hardware can make significant difference in the overall appeal of your home. If buyers see your attention the little things, it leaves the impression that your home has been well cared for.  Many buyers also exclude or discount homes they should have done more.

For more costly upgrades or repairs, you should consult with a professional. Some repairs and upgrades add more value than others. You probably do not want to make an upgrade that cost $5,000 if it does add that value to your home. If necessary, a seller credit or concession might be more appropriate.

Staging and Cleanliness

There is no secret as to why model homes look immaculate. It helps the builder sell more homes. But for most people who actually live in the home they are trying to sell, this is unrealistic. However, you should do your very best to keep your home clean and especially clutter free. Pay attention to the details because your equity depends on it.

Take the time to clear the kitchen countertops. Clean up any dog/hair and make sure there are no unwanted smells. The kid’s rooms should be picked up. The garage should be organized. You could put out some flower or light a scented candle.

I’m sure you are proud of your family but it you have a more than a few pictures of them, you might want to store some of them while you are trying to sell. Seeing your pictures only remind prospective buyers whose home it is. Instead we want them to visualize it as their own.

It is also advised that you are not present during any showing. This will help buyers feel more comfortable discussing your home with their agent. If you do happen to see a prospective buyer in passing, try to be polite and promptly move on. You do not want to get drawn into answering questions as it rather easy to say something that could turn them off to the property.

Accepting an Offer

It may sound like a no brainer – the higher the price the better offer. Focusing entirely on price is perhaps one of the hardest obstacles for many sellers overcome. There are many factors to take into account when considering offers.

Terms and conditions can play a major role is assessing the probability of a buyer actually closing. Is the sale contingent on the sale of another property? Does a buyer need more than 45 days to close, why? I am here to explain and help you evaluate all the terms and conditions before you accept an offer.

Once both parties agree and sign off on pricing and all terms a contract is considered executed. In most states an escrow deposit also must be made for the contract to be considered binding. The escrow is often held by the title agent designated in the contract until all conditions of the contract are met. At closing the escrow will either be applied toward the purchase or a check will be issued to the buyer.

Upon accepting an offer, you will be given a timeline for every stage of the process to closing. It is very important that you stay on top of this schedule. This will encourage better cooperation from the buyer and ensure neither you nor the buyer is in breach of the contract. It is also advised that keep a written record of everything going forward.

Contingencies, Inspections, and Appraisal

A contingency is a condition of the contract that must be met or time expired in order to keep the contract binding. Some of the more common contingencies include financing, appraisal, inspections, and the sale or closing of a buyer’s current home. For land sale, buyers may require soil percolation, soil compaction, or well testing.

Unless otherwise specified in the contract, buyers are responsible for paying for their appraisal and all testing. You should be flexible and accommodate for these appointments. You are not required to be present as in most cases either the buyer’s agent and/or I will be there.

If they contract has a financing contingency, the property will also need to be appraised. Even if you recently had your appraised, almost all lending institutions will require an appraisal ordered by their process. On commercial properties, a lender may also require additional testing prior to funding such as soil or environmental testing.

Most homebuyers these days will make their purchase contingent on a home inspection. This is usually done by a licensed inspector but not always. Sometimes buyers will have multiple inspections if want an opinion on something specific inspected such as the HVAC, termites, or a pool. Typically this contingency is set to be completed within the first week or two after the contract is accepted.

If the buyer is not satisfied with the inspection or appraisal, they may request a renegotiation of the contract. If this happens, you need to stay objective. If an inspector finds an issue, you are now legally required to disclose it to any future buyers. Even if we could argue an appraisal, which is very rare, it initially came back lower so the buyer could still walk.

Hopefully you will never find yourself in this sort of situation, but if you are I will be there to offer you sound and practical advice to help you progress towards closing.

Preparing for Closing

If you are thinking about closing, it means you are almost there. Closing is the final step in the process of selling your home. This is where the official transfer of ownership and usually possession takes place. You will hand over your keys and the closing agent will pass them on to the new owners.

Walk Through

Typically a day or two prior to or sometimes the day of closing it is customary for the buyers to do a final walk through. This is when they the buyer checks off on any items that were to be addressed. It is expected for the home to be in a similar condition as when they agreed to purchase the property. If anything was damaged during your move, please do what is needed so this does not present an issue hours before closing.

Utilities

You also need to remember to cancel or transfer all of your utilities and home services. Most of these will now allow you schedule your cancellation days in advance. If for some reason you are concerned they closing might be delayed, you can wait until the buyers have a clear to close from their lender. This means their loan has passed the underwriting phase and their loan is ready to be sent to the closing agent.

Closing     

You will need your driver’s license and a second form of ID just in case. You will need a cashier’s check if any funds are required to close. You may be allowed to write a personal check for smaller amounts. Please also remember to bring all of your keys, garage door openers, ect.

Although it is rare this late in the process and even if we have done everything right to prevent it, sometimes hiccups do happen. Perhaps the buyer’s loan gets delayed or something breaks during the move. We have seen it all and will be right there with you to handle any last minute issues in the most efficient and stress free manner possible.

A day or two prior to closing we should receive a preliminary settlement statement. This will outline all of the financial aspects of the transaction. Prior to closing we will verify everything is correct and make any corrections where necessary. At closing, the closing agent will go through the entire settlement package with you.

At this point there should be no surprises. We should essentially be verifying the preliminary settlement statement and going through all the appropriate disclosures. However, the closing agent will explain anything you need in further detail, and of course we will be right there with you as well. When complete, the closing agent will either present you with a check or wire any proceeds from the sale to your account.