THE
HOME SELLER’S GUIDE TO SUCCESS
Get the most for your house without the hassles
Step 1 of 7
Some 5 million 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.
Unfortunately, home
selling has become a more complex business 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-where REALTORS® represent homebuyers-is now common
nationwide and good buyer-brokers want the best for their clients.
The result is that
while almost 100,000 existing homes are sold each week, the process is not
as easy for sellers as it was 5 or 10 years ago.
Surviving in today’s real estate world requires experience and
training in such fields as real estate marketing, financing, negotiation and
closing-the very expertise available from the
Home Resource Team.
Are you ready?
The home-selling
process typically starts several months before a property is made available
for sale. It is necessary to
look at a home through the eyes of a prospective buyer and determine what
needs to be cleaned, painted, repaired and tossed out of the home.
Ask yourself: If you
were buying this home what would you want to see?
The goal is to show a home which looks good, maximizes space and
attracts as many buyers-and as much demand-as possible.
While part of the
“getting ready” phase relates to repairs, painting and other home
improvements, this is also a good time to ask why you really want to sell.
Selling a home is an
important matter and there should be a good reason to sell-perhaps a jog
change to a new community or the need for more space.
Your reason for selling can impact the negotiating process so it is
important to discuss your needs and wants in private with a member of the
Home Resource Team who lists your home.
When should you sell?
The marketplace tends
to be more active in the summer because parents want to enroll children in
classes at the beginning of the school year (usually August).
The summer is also typically when most homes are likely to be
available.
Generally speaking,
markets tend to have some balance between buyers and sellers year-round.
In a given community, for example, there may be fewer buyers in late
December, but there also likely to be fewer homes available for purchase.
So, home prices tend to rise and fall because of general demand
patterns rather than time of the year.
Owners are encouraged
to sell when the property is ready for sale, there is a need or desire to
sell, and the services of the Home Resource
Team have been retained.
Move or Improve?
Find out when it makes
sense to move and when it makes sense to remodel:
When it is time to move
and when it is time to remodel?
It’s largely a question of doing the math.
But the decision also depends upon your unique situation at a given
point in your life.
Moving Around Town
Experts generally
agree, it is cheaper to renovate your current home than it is to move to
another resale house in the same neighborhood.
When you add up the
commissions and other costs to sell your old home and buy a new one; the
cost of a new mortgage, including closing costs; and the cost of the
physical move; unless you plan to tear down your old home and rebuild it
from the foundation up, improving is much cheaper than moving.
This is especially true
in hot markets. If you are
going to move across the street you are going to pay a premium.
Moving Out Of Town
If you must move, to
take a new job or to be closer to loved ones, should you make improvements
in your home before putting it up for sale?
If you are going to
move out of the area, don’t think about remodeling.
You are not going to get back all the money you spend in any market.
In this case, it makes more sense to put that money in the new home.
It is also not a good
idea to make major improvements to your current home if there is a good
chance you will move within or out of town in the next few years, unless you
are willing to gamble the cost vs. return will be in your favor when the
time comes to move.
The market could be
favorable, pointing to high cost-vs.-return values today, but no one can
predict how volatile your real estate market will be tomorrow.
Though each home
owner’s situation will be different, in today’s resale market a “move up”
has the potential to be a big financial step down.
Baring a compelling reason to move, the smart money may well be on
remodeling.
How do you improve your home’s value?
The general rule in
real estate is that buyers seek the least expensive home in the best
neighborhood they can afford.
In terms of improvements, this means you want a home that fits in the
neighborhood but is not over-improved.
For example, if most homes in your neighborhood have three bedrooms,
two baths and 2,500 sq.ft. Of finished space, a property with five bedrooms,
more baths and far more space would likely be priced much higher and likely
be more difficult to sell.
Improvements should be
made so that the property shows well, is consistent with the neighborhood
and does not involve capital investments, the cost of which cannot be
recovered from the sale.
Furthermore, improvements should reflect community preferences.
Cosmetic
improvements-paint, wallpaper and landscaping-help a home “show” better and
often are good investments.
Mechanical repairs-to ensure that all systems and appliances are in good
working condition-are required to get top price.
Ideally, you want to be
sure that your property is competitive with other homes available in the
community. The
Home Resource Team, who sees numerous homes, can provide suggestions that are consistent
with your marketplace.
Get the House Ready
From experience, the
Home Resource Team also knows that a “well-polished” house appeals to more
buyers and will sell faster and for a higher price.
Additionally, buyers feel more comfortable purchasing a well-cared
for home because if what they see is maintained, what they can’t see has
probably also been maintained.
In readying your house for sale, consider:
How much should you
spend
Exterior and curb
appeal
Preparing the
interior
How much should you spend?
In preparing your home
for the market, spend as little money as possible.
Buyers will be impressed by a brand new roof, but they aren’t likely
to give you enough money to pay for it.
There is a big difference between making minor and inexpensive
“polishes” and “touch-ups” to your house, such as putting new knobs on
cabinets and a fresh coat of neutral paint in the living room, and doing
extensive and costly renovations, like installing a new kitchen.
A member of the Home Resource Team, who is familiar with buyers’
expectations in your neighborhood, can advise you specifically on what
improvements need to be made.
Don’t hesitate to ask for advice.
Maximizing exterior and curb appeal
Before putting your
house on the market, take as much time as necessary (and as little money as
possible) to maximize its exterior and interior appeal.
Tips to enhance your home’s exterior and curb appeal:
Keep the lawn
edged, cut and watered regularly.
Trim hedges, weed
lawns and flowerbeds, and prune trees regularly.
Check the
foundation, steps, walkways, walls and patios for cracks and crumbling.
Inspect doors and
windows for peeling paint.
Clean and align
gutters.
Inspect and clean
chimney.
Repair and replace
loose or damaged roof shingles.
Repair and repaint
loose siding and caulking.
In winter, keep
walks neatly cleared of snow and ice.
During spring and
summer months consider adding a few showy annuals, perhaps in pots, near
your front entrance.
Re-seal an asphalt
driveway.
Keep your garage
door closed
Store RV’s or old
and beaten up cars elsewhere while the house is on the market.
Apply a fresh coat
of paint to the front door.
Maximizing interior appeal
Enhance your home’s
interior by:
Giving every room
in the house a thorough cleaning, as well as removing all clutter.
This alone will make your house appear bigger and brighter.
Some home owners with crowded rooms have actually rented storage
garages and moved half of their furniture out, creating a sleeker, and
more spacious look.
Hiring a
professional cleaning service, once every few weeks while the house is
on the market. This may be
a good investment for owners who are busy elsewhere.
Removing the less
frequently used, even daily used items from kitchen counters, closets
and attics making these areas much more inviting.
Since you are anticipating a move anyhow, holding a garage sale
at this point is a great idea.
If necessary,
repainting dingy, soiled or strongly colored walls with a neutral shade
of paint, such as off-white or beige.
The same neutral scheme can be applied to carpets and linoleum.
Checking for
cracks, leaks and signs of dampness in the attic and basement.
Repairing cracks,
holes or damage to plaster, wallboard, wallpaper, paint and tiles.
Replacing broken or
cracked windowpanes, moldings and other woodwork.
Inspecting and repairing the plumbing, heating, cooling and alarm
systems.
Repairing dripping
faucets and showerheads.
Buying showy new towels for the bathroom, to be brought out only when
prospective buyers are on the way.
Sprucing up the
kitchen in need of more major remodeling by investing in new cabinet
knob, new curtains, or a coat of neutral paint
Step 2 of 7
Why use a REALTOR®?
There are more than 2
million people nationwide who have licenses to sell real estate, of which
about 750,000 belong to the National Association of REALTORS® (NAR).
Only NAR members are entitled to use the term “REALTOR®”.
NAR members must adhere
to a strict Code of Ethics. By
joining NAR, individuals have access to a wide range of classes, seminars
and certification opportunities.
NAR members are routinely active in a variety of organizations.
The Home Resource Team is actively involved with the St. Charles
County Association of REALTORS®, Missouri Association of REALTORS®, National
Association of REALTORS®, Women’s Council of REALTORS®, Wentzville Chamber
of Commerce and various charitable organizations.
Being actively involved in community affairs provides the
Home Resource Team with a better understanding of the area in which we are
selling.
In essence, the
Home Resource Team members are community experts.
We track real estate trends, share neighborhood concerns and
participate in local matters.
The members of the Home Resource Team are good neighbors who are in the
business of helping others buy sell homes.
What should you expect when working with the
Home Resource Team?
Once you home is listed
with a member of the Home Resource Team, he or she will immediately begin to
market your home according to the most appropriate conventions for your
community. Besides placing a
sign in your yard and putting your home in the Multiple Listing Service
(MLS) the Home Resource Team advertises in the following areas:
Internet:
My-IntegrityGroup.com
HomeResourceTeam.com
RE/MAX.com
STLtoday.com
Realtor.com
Television:
Charter Cable
Channel 8 on Sundays and Tuesdays
Print:
Original Homes
Magazine
Your
Home Resource Team
member will keep you informed as the marketing process unfolds and as
expressions of interest are received.
In time, the marketing plan may be modified to reflect buyer
reactions and changes in the marketplace.
Every reasonable owner
wants the best possible price and terms for his or her home.
Several factors, including market conditions and interest rates will
determine how much you can get for your home.
The idea is to get the maximum price and the best terms during the
window of time when your home is being marketed.
In other words, home
selling is part science, part marketing, part negotiation and part art.
Unlike math where 2+2 always equals 4, in real estate there is no
certain conclusion. All
transactions are different, and because of this, you should do as much as
possible to prepare your home for sale.
What is your home worth?
All homes have price,
and sometimes more than one.
There is the price owners would like to get, the value buyers would like to
offer and a point of agreement which can result in a sale.
In considering home
values, several factors are important:
The value of your
home relates to local sales prices.
The same home, located elsewhere, would likely have a different
value.
Owner needs can
impact sales values. If
owner Smith “must” sell quickly, he will have less leverage in the
marketplace. Buyers may
think that Smith is willing to trade a quick closing for a lower
price—and they may be right.
If Smith has no incentive to sell quickly, he may have
marketplace strength.
Sales prices are
not based on what owners “need”.
When an owner says, “I must sell for $300,000 because I need
$100,000 in cash to buy my next home,” buyers will quickly ask if
$300,000 is a reasonable price for the property.
I similar homes in the same community are selling for $250,000,
the seller will not be successful.
How much is too much?
Because all
transactions are unique there is flexibility in the marketplace.
The amount of flexibility depends on local conditions.
For example, suppose
you are selling a townhouse.
Suppose also that there have been five recent sales of the model you own and
that sale values have ranged between $200,000 and $210,000.
You now have an idea of how your home might be priced.
In a strong market perhaps you can ask $210,000 or a little more.
If the market has slowed, $210,000 may be a reasonable asking price,
but perhaps more than the final sales price.
Because members of the
Home Resource Team have handled many transactions, they are familiar with
the terms and conditions that went into individual sales, not just published
sale prices which may not reflect various premiums, discounts and
adjustments.
Step 4 of 7
If you bought a car,
you could purchase a given model with selected features from any dealer.
Since the car comes from one assembly plant, it is going to be the
same whether purchased from dealer Smith or dealer Jones.
Homes are different.
Each is unique, the marketplace is always in flux, interest rates
constantly change and new buyers search for homes each day.
With such fluidity, it requires the
Home Resource Team to craft
marketing plans specifically for individual homes and market conditions.
Selling can entail a
variety of marketing strategies (SEE STEP 2).
Once listed, it is likely that the home will be quickly entered into
the local MLS and various web sites also print media.
Open houses, broker access to the home via the use of a lock box and
networking with both local and out-of-town brokers are common.
Much of the
Home Resource Team’s work will be quiet and unseen—yet important.
The quiet telephone calls, the work with contacts, the follow-ups
with open-house visitors, conversations with ad respondents, the web
postings and other outreach efforts are all part of the process required to
sell houses.
How to market your home.
If you look at a
typical transaction you can see that there are five general areas where the
Home Resource Team can assist in the home-selling process.
Preparation:
Before being placed on the market, homes
must be in “show” condition.
A member of the Home Resource Team can explain what repairs and
upgrades are required for individual homes which are most likely to
produce the best results.
Pricing:
The Home Resource Team does more than price homes for sale, we also
construct sale terms designed to speed the selling process.
It may be, for example, that a home priced at $150,000 with a 2
percent seller credit to the buyer at closing will be far more
attractive to purchasers than a home priced at $147,000.
Why? That 2 percent
credit is worth $3,000 to the purchaser at closing—the time when buyers
are most likely strapped for cash.
Marketing:
The Home Resource Team will execute strategies and programs to get the
home sold. Typically this
includes placement in the local MLS and internet as well as related
marketing, advertising and networking.
Negotiation:
The Home Resource Team will assist owners in the bargaining
process, offering advice and counsel as offers are received.
Closing:
Once a contract for the purchase of a home has been accepted, a
series of inspections and checks are typically required to satisfy
buyers and lenders. The
Home Resource Team can help owners complete the transaction process by
assisting with the many requirements found in a typical sale agreement.
Step 5 of 7
There is no question
that selling a home is an important event.
A home sale represents transition, movement and change.
Big money is involved. Households move from the known and comfortable
to the unknown and a period of adjustment.
There may be job changes, new schools, distance from old friends and
the possibility of new ones.
No less important, a
home sale itself can be complex.
There will be people looking at your house, documents to sign and
issues to be negotiated.
Because a home sale
involves an array of both personal and business concerns, it is important to
get it done right. You need to
carefully prepare your home, understand the market and see what alternatives
are realistically available.
The old motto “be prepared” is a good guide in such circumstances.
What is an acceptable offer?
The goal of every
seller is to have a line of buyers outside the front door, each clutching
higher and higher offers. And
while this has been known to happen, in most markets there is some balance
between the number of buyers and sellers.
A number of factors determine whether a buyer’s offer is acceptable.
They include:
Is the offer at or
near the asking price? Is
the offer above asking price?
Has the buyer
accepted the asking price or something close?
Has the buyer buried thousands of dollars in discounts and seller
costs within tiny clauses and contract additions?
What is the
alternative to the buyer’s offer?
If a home has not attracted an offer in months, then sellers need
to determine if a better deal is possible—recognizing that each month
costs are being incurred for mortgage payments, taxes and insurance.
Does the owner have
enough time to wait for other offers?
What if no other
offers are received?
What if several
offers are received? Do you
choose the high offer from the purchaser with questionable finances who
may not be able to close, or a somewhat lesser offer from a buyer with
preapproved financing?
In each case,
owners—with assistance from the Home Resource
Team – will need to carefully
review offers, consider marketplace options and then determine whether an
offer is acceptable.
What is a counter-offer?
When a home is made
available for sale the owner is essentially making an offer to buyers: For a
given number of dollars and other terms you can acquire this home.
Buyers, in turn, can respond with several options:
Not interested.
Yes, we’ll buy on the owner’s terms.
We are interested and here is our
counter-offer.
A counter-offer is
nothing more than a new offer.
And just as the buyer ad three options in response to the owner’s original
price and terms, the seller can now choose one of three reactions: accept
the offer, decline the offer or make a fresh counter-offer.
Offers and
counter-offers reflect the back-and-forth activity of the marketplace.
It is an efficient and practical process—but also one that may
contain tricky clauses and hidden costs.
The member of the Home Resource Team who lists your home can explain
the local bargaining process in detail and assist in the actual
negotiations.
How do you negotiate?
It is sometimes argued
that negotiation must produce one “winner” and one “loser”.
Others suggest that a “win/win” situation is possible where each side
gets something of value.
Real estate bargaining
typically involves compromises on both sides.
It’s not war; it’s not winner-take-all; and it is not time to take
personally any comments made by purchasers.
Instead, negotiating
should be seen as a natural business process, buyers should be treated with
respect; and owners should never lose sight of either their best interests
or their baseline transaction requirements.
These are the standards unique to each owner, which must be met
before the home can be sold.
It might seem as though
once a sale agreement has been signed that the selling process is complete.
Not only is it not over yet, but some of the most complex aspects of
a real estate transaction now begin.
The sale agreement sets
not only purchase price for the home, but also a series of terms and
conditions. For instance:
Contracts routinely
depend on the ability of a buyer to obtain financing, which is why most
sellers prefer buyers with preapproval letters from lenders.
A growing
percentage of transactions involve a home inspection, or a physical
review of the home by a trained and independent observer.
Lenders will establish numerous conditions before granting a loan. They will want a title exam, title insurance to protect against title errors, termite inspections, surveys and an appraisal to assure that the home has sufficient value to secure the loan.
A member of the
Home Resource Team typically arranges the required inspections and helps the
owner prepare for closing.
When should you close?
With automation now
available, closings can occur within a week in some areas—at least in
theory. In practice, it takes
time to arrange financing, conduct inspections, obtain appraisals, locate
replacement housing, contact movers, pack and actually move.
While instant closings
are not practical, neither are closings too far in the future.
The problem with closings much past 60 days is that rates are
difficult to lock in. If
mortgage rates go up, it is possible that the buyer will no longer be able
to afford the home and thus the deal may fall through.
The result of these considerations is that most homes close 30 to 45
days after a sale agreement has been signed.
What happens?
Closing—or “settlement”
or “escrow” as it is known in some areas—is essentially a meeting where the
closing agent (the party who conducts settlement) takes in money from the
buyer, pays out money to the owner and makes sure that the purchaser’s title
is properly recorded in local records along with mortgage liens.
The closing agent
reviews the sale agreement to determine what payments and credits the owner
should receive and what amounts are due from the buyer.
The closing agent also assures that certain transaction costs are
paid (taxes and title searches).
Closing is also the
time when “adjustments” will be made.
For instance, suppose you have pre-paid taxes four months in advance.
In this case, the closing agent will compensate you for the
prepayment at closing by having the buyer pay you additional money.
It could also work in
reverse. If you are behind on
property taxes, the closing agent will reduce the money due to you at
settlement by the amount of unpaid taxes.
How do you prepare to sell?
It is important to look
at the sale agreement and review your obligations.
For instance, if you have agreed to paint a room or replace the
dishwasher, such work must be completed before closing.
A member of the
Home Resource Team
can discuss your agreement and the steps which must be taken to complete the
transaction.
The closing agent will
handle both the settlement papers and related documents.
Step 7 of 7
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.
The moving center
on Homestore.com provides calculators as well as information on moving
options, storage, truck rentals and related topics.
This information, plus assistance and advice form the
Home Resource Team, can ease the moving process.
It is ideally best to
get rid of excess furniture and other goods by having a sale before you
move. This will reduce the
volume of goods to be moved and thus lower moving costs.
Unwanted furniture which cannot be sold can often be donated to
charitable groups, many of which will come to your home to pick up
donations. All other unwanted
items should be taken to a landfill.
You should provide the U.S. Postal Service with a forwarding address,
and utility companies should be advised when to end service.
Check with utility companies to see if there is deposit money which
should be returned.
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 requires to sell the home can actually help
with the moving process. For
Example, cleaning out closets, basements and attics means 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 a
long distance? If yes, you
will likely require an interstate mover and the use of a large van.
Moving
internationally. Contact
the embassy in
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 know where goods should be
placed.
Who should you use?
The decision of who to
use can begin with a visit to REALTOR.com’s® moving center and
discussions with a member of the Home Resource
Team who is marketing your
home.
There are a number of
factors to consider. Money is
one issue: 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 home
sellers with a similar volume of goods to transport.
Get mover estimates in
writing. Be aware that it is
possible to get discounts through membership organizations and, sometimes,
on the basis of you 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 are moving more than a few miles then you should have
enough cash or credit to cover travel, food, transportation and lodging.
Medicine.
Keep medicines and related prescriptions in a place where they
will be available during the move.
Number boxes so
that all items can be counted on arrival.
Make a list of boxes by number and indicate their contents.
If moving with
children, make sure that each has a favorite toy or toys, blankets,
games, music and other goods.
Moving historic,
breakable or valued items?
Such goods routinely require special handling and packaging.
Have address books
readily available in case you need help.
If you have a
laptop computer with a modem, make it accessible during your trip to
pick up business and personal e-mail
