Advice For Sellers
Determine Why You Are Selling
Knowing exactly why you are selling makes it easier for you to follow the right plan of action for getting what you want.
As a seller, if you need to close a sale quickly, then highest price becomes secondary. That doesn’t mean you won’t or can’t get the highest price possible, but it is not the deciding factor. A buyer who can initiate a quick closing time will appeal more than a buyer who offers more money but other factors like selling an existing home, means the closing could drag on.
It will help to eliminate some offers if you know ahead of time how low you will go in terms of selling price. You should consider all offers seriously and take into consideration the terms of each offer. However, you can save yourself time and effort if you know the bottom line and are strict to stay with it.
Once you know what your limits and reasons are, discuss them with your agent so that he or she can help you set and accomplish realistic goals.
Make An Action Plan
- Analyze why you are selling – If you and your agent understand your motives, you will be able to better negotiate and to get what you want, whether it be a quick sale, high price, or something in the middle.
- Prepare your home for the buyer – Maximize the strengths of your property and repair and replace its weaknesses. You want the buyer to walk away from your home with a lasting good impression.
- Find a good real estate agent that understands your needs – Hire a loyal, professional agent who will negotiate to help you achieve your goals. In addition, they should be assertive and honest with both you and the buyer.
- Be prepared for negotiation – Learn and understand your buyer’s situation; what are their motives? Can you demand a big deposit from them? Try to lock in the buyer so that the deal is secure.
- Negotiate for the best price and the best terms – Have your agent advise you how to counter offer to get maximum value from every offer.
- Make sure the contract is accurate and complete – Be honest with your disclosures; you do not want to lose the deal because you were lying or diminishing your home’s defects. Insist the buyers get a professional inspection. This will protect both you and the buyer.
Hiring The Right Agent
The most important attribute of an agent is that he/she is experienced and well connected to the real estate industry. He/she should know the market and provide information on past sales, current listings, his or her marketing plan, and provide solid references. In addition, you also want to look for an agent that is honest, assertive, with a proven track record, and one that best understands your individual needs.
Choose a local agent who is highly experienced with a superior reputation. They can better serve your needs because they should be more familiar with the local market conditions, local prices, and what’s hot or not in your community.
Should I Consider Selling My Own Home?
FSBO (For Sale By Owner) is a process of selling your home without the use of a professional real estate agent or broker. Selling a home without an agent could conceivably save approximately 6% of what would have been the agents’ commission.
Before you seriously consider this option, you must remember that that to get the savings, there must be a cost. So, what’s the catch? FSBO (For Sale By Owner) selling is hard. Much Harder!.
Of all sellers that decide to do FSBO; only about 10% are successful at it. And most do not end up saving themselves money. FSBO sellers often end up accepting a lower price for their home than they would with an agent with professional negotiating skills.
There are other important issues to consider, as well. Do you have time and money to make selling your home your full-time job? Because for a lot of FSBO sellers, that’s exactly what it is. Do you have capital to spend on the marketing, advertising, inspections, paperwork, phone calls, showings, and the problems that come up when any home is sold?
Other advantages of selling with a professional agent are that you can get your home listed on the MLS (Multiple Listing Service) and other popular websites where not only homebuyers but also other agents can easily find and show it. Professional real estate agents have an extensive network that allows them to more easily access buyers.
Before you decide to sell your home yourself, thoughtfully consider just how much time and effort you can spare for selling your home, as well as how important it is that your home sells sooner rather than later.
How Do I Determine the Asking Price?
You will alienate a buyer right off the get go if the price is too high! If you want buyers to notice and seriously consider your home, the price must be accurate. Your asking price communicates how serious you are about selling your home.
Several factors will contribute to your final decision. First, your agent will compare your house to others that are in the market. He/she will provide you with a CMA (Comparative Market Analysis). The CMA will reflect the following:
- – Houses in your price range and area that were sold within the last half-year
- – Asking and selling prices of houses
- – Current inventory of houses on the market
- – Features of each house on the market
From the CMA, you will learn the difference between the asking price and selling price for all homes sold, the condition of the market, and other houses comparable to yours.
Your real estate agent will advise you on what types of houses are selling in your area. Buyers follow trends, and these trends can help you set your price.
Respect your agents’ advise and be realistic. You should understand and set your asking price to reflect the current market situation.
What is A Short Sale?
A short sale happens when you sell your house for less than your remaining mortgage balance, the proceeds of which go to the lender and in return the lender forgives the remaining balance. Selling your home as a short sale is one way to avoid foreclosure.
When you sell a house for less than your remaining mortgage balance, the proceeds go to the lender and the lender forgives the remaining balance. This is called a Short Sale. This one way a seller has to avoid foreclosure.
Generally, lenders lose money when they foreclose on a property. So, they would prefer not to foreclose if it can be avoided. A short sale represents an opportunity to cut their losses because a short sale usually allows them to recoup more of the cost of the loan than a foreclosure process would.
Short Sales are not easy to accomplish. You must provide documentation showing a genuine financial hardship in order to obtain authorization for a short sale. The decision for accepting a short sale is not solely in the hands of the lender. The lender must first agree, but if there is mortgage insurance involved, this company also gets input on the decision. If there is an investor backing the mortgage, they also have input as to whether to accept a short sale.
The transaction process for a short sale can be rather cumbersome as well, whether you’re on the buying or selling side. Many short sales fail due to additional demands by the lender, such as requiring the broker to reduce his or her commission and/or that the seller signs a document requiring him or her to pay back the shortfall.
Whether on the buying or selling side, the transaction process for a short sale can be cumbersome and time consuming. A large percentage of short sales fail because of demands by the lender.
If you’re on the selling side of a short sale, we recommend having your professional real agent negotiate with your lender for a better deal. And remember, if the lender does accept a short sale and forgives part of your debt, that is considered taxable income and you must declare it as such to the IRS.
Making A Good First Impression
Showing your home in its best light will help attract buyers interest in your home and a good first impression can influence them both emotionally and visually. You need them to think of the great first impression when they make and offer and consider your asking price.
Don’t show your property until it is ready. A bad first impression can turn off a potential buyer and you don’t want to give buyers the chance to use the negative first impression as means of negotiation.
A good real estate agent will give solid advice on what needs to be done to maximize the value of your home. Consider advice from architects or landscape designers. You need objective opinions because it’s difficult to separate the personal and emotional ties you have with your home.
Typically, there are some general fix ups that need to be completed both outside and inside. As a seller, you should ask yourself the following:
- – Landscaping – Is the front yard maintained? Are areas of the house visible to the street in good condition?
- – Cleaning or upgrading the driveway – Is your driveway cluttered with toys, tools, trash etc.?
- – Painting – Does both the exterior and the interior look like they have been well taken care of?
- – Carpeting – Does the carpet have stains? Or does the carpet look old, tired and/or dirty?
Getting the Highest Price in the Shortest Time
Knowing how to market your home will get you the highest price in the shortest amount of time. The better your home is marketed, the more offers you will get. The more offers you get, the more options you obtain to get the price and terms you’re looking for
Pricing your home right is the most important factor in marketing your home. Your property’s worth is determined by the current market and comparatives in your area. A properly priced home is the key to getting people to view your home, and if your home or property is not priced right, there will be no interest.
The condition of your home is another important factor in selling your home. All defects, repairs, improvements and updates should be done before putting your home on the market if you want to maximize its’ value. Many times, the condition of a home will result in fast buying decisions. An attractive and updated home can trigger an emotional response that can lead to a financial response.
Your professional real estate agent will negotiate the best terms for all parties involved. Sometimes the terms can be adjusted to attract buyers, especially if you are set on obtaining your asking price. You may want to consider offering seller financing at a lower than market interest rate on a portion of the sale price, or make minor improvements. In any event, the buyer must be convinced why they should pay the asking price.
Lastly, marketing your home with a great agent ensures your house is listed on the MLS and on the Internet. Your “Home for Sale” must be visible and accessible to passersby’s through signs, local advertisements and telling friends, family, and acquaintances.
As a seller, of course you are looking to get the best price and the best terms that fit your needs. However, if you focus solely on the price it could be you overlook terms that would benefit you as a buyer.
Some options that could work in your favor:
- – All-cash deal
- – Higher-than-market-interest in a second mortgage for your home
- – The buyer will pay for most or all of the closing costs
- – The buyer will take care of any repairs
- – Quick close – the buyer is pre-approved and ready to close in a timeframe that best suits you
When reading through offers, remember to look at the whole package and consult with your agent. Your agent will help you assess what is being offered and if it meets your needs.
Should I Insist on a Home Inspection?
A professional home inspection should absolutely be conducted. It protects both you and the buyer. It allows both the opportunity to learn about the property’s defects.
A home inspection usually covers the following:
- – Structural problems – are there problems with the underlying foundation of your home?
- – Plumbing conditions – is there leakage or clogging?
- – Roofing conditions – the extent of deterioration, is there leakage?
- – Electrical conditions – is there inadequate circuits or potential fire hazards?
As a seller, the home inspection reports protect YOU because it establishes the actual condition of the property at the time of sale.