When conversing with real estate agents, you will often find that when they talk to you about buying real estate, they will refer to your purchase as a "home." Yet if you are selling property, they will often refer to it as a "house." There is a reason for this. Buying real estate is often an emotional decision, but when selling real estate you need to remove emotion from the equation.
You need to think of your house as a marketable commodity. Property. Real estate. Your goal is to get others to see it as their potential home, not yours. If you do not consciously make this decision, you can inadvertently create a situation where it takes longer to sell your property.
The first step in getting your home ready to sell is to "de-personalize" it.
If there is a new home sales tract near your home, go visit. It doesn’t matter what size the homes are. What you will find are some wonderfully (but sparsely) furnished homes that anyone could live in — with the emphasis on "anyone." They are anonymous. There may be a baseball glove in the boy’s room, but no family photos on the walls.
There may be "personality" — but no person.
The reason you want to make your home "anonymous" is because you want buyers to view it as their potential home. When a potential homebuyer sees your family photos hanging on the wall, it puts your own brand on the home and momentarily shatters their illusions about living in the house themselves.
Put away family photos, sports trophies, collectible items, knick-knacks, and souvenirs. Put them in a box. Rent a storage area for a few months and put the box in the storage unit.
Do not just put the box in the attic, basement, garage or a closet. Part of preparing a house for sale is to remove "clutter," and that is the next step in preparing your house for sale.
Meeting With Realtors
So you've decided to sell your home and have a fairly good idea of what you think it is worth. Being a sensible home seller, you schedule appointments with three local listing agents who've been hanging stuff on your front doorknob for years. Each Realtor comes prepared with a "Competitive Market Analysis" on fancy paper and they each recommend a specific sales price.
Amazingly, a couple of the Realtors have come up with prices that are lower than you expected. Although they back up their recommendations with recent sales data of similar homes, you remain convinced your house is worth more.
When you interview the third agent's figures, they are much more in line with your own anticipated value, or maybe even higher. Suddenly, you are a happy and excited home seller, already counting the money.
A Sales Practice Called "Buying a Listing"
If you're like many people, you pick Realtor number three. This is an agent who seems willing to listen to your input and work with you. This is an agent that cares about putting the most money in your pocket. This is an agent that is willing to start out at your price and if you need to drop the price later, you can do that easily, right?
After all, everyone else does it!
The truth is that you may have just met an agent engaging in a questionable sales practice called "buying a listing." He "bought" the listing by suggesting you might be able to get a higher sales price than the other agents recommended. Most likely, he is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price.
Why do some agents "buy" listings this way?
There are basically two reasons. A well-meaning and hard working agent can feel pressure from a homeowner who has an inflated perception of his home's value. On the other hand, there are some agents who engage in this sales practice routinely.
A reputable title company can help you evaluate complicated offers (those with a variety of conditions), act as an escrow agent to hold the down payment, review contracts and handle your home’s closing process. They can also tell you what things, by law, you must disclose to buyers prior to a sale and can also help you avoid inadvertently discriminating against any potential buyers.
In some areas, title companies will handle all aspects of the transaction and have in-house legal departments that can assist you with legal issues that may arise. To locate a title company in your area call your mortgage company or Loan Officer to see who they recommend.
Marketing Your Home to Other Agents
Even before the sign is up and the brochures are ready, your agent should list your property with the local MLS (Multiple Listing Service). The MLS is a database of all the homes listed by local real estate agents who are members of the service, which is practically all of the local agents.
Important information about your property is listed here, from general data such as square footage and number of rooms, to such details as whether you have central air conditioning or hard wood flooring. There should also be a photo, and a short verbal description of what makes your house "special."
Agents search the database for homes that fit the price range and needs of their clients. They pay special attention to homes that have been recently placed on the market, which is one reason you get a lot of attention when your house is first listed. Many agents will want to preview the home before they show it to their clients.
The main point about having your house listed in the MLS is that you expand your sales force by the number of local MLS members. Instead of having just one agent working for you, now you may have hundreds or more, depending on the size of your community.
The listing agent's main job to make sure that the other MLS members know about your house. This is accomplished through listing your house in the Multiple Listing Service, broker previews and advertising targeted toward other agents, not homebuyers.
Marketing Your Home to Homebuyers
Every home seller likes to be assured that their listing agent or the real estate company will run ads featuring their home. Newspaper ads could be large display ads with lots of listings or small classified ads featuring just your property. Ads may also appear in local real estate magazines and your listing will also show up on the Internet.
Of course the agents and companies will run ads featuring your house, but not for the reasons you expect.
You see, the main job of advertising is not to sell your house directly. Advertising creates phone calls and some of those callers become clients of the agents answering the calls. This builds up a pool of homebuyers looking for property in general, all represented by selling agents (buyer’s agents). Multiply this by all the agents and companies who also advertise homes, and there is a large pool of homebuyers in the market at any given time ' all of whom are represented by selling agents.
The agents representing those homebuyers know about your home because it is listed in the Multiple Listing Service, has been on office and broker preview, and because your agent may have also sent flyers to all the local real estate offices.
The agents match up their clients with available homes, one of which may be yours. Then they show the homes to their clients, who eventually make an offer on one. That is how your house gets sold.
Ads create a pool of clients, one of which buys your home. Ads do not usually sell your house directly.
When a home buyer makes an offer (this is often presented to you directly from the buyer or through their agent if they have one), you should consult with your attorney or title company. Buyers and sellers have an Attorney Review Period, which is usually three days, to cancel or amend the offer. The offer becomes a contract at the end of the Attorney Review Period, and is binding. Many offers can be complicated and contain special clauses that favor the buyer.
Purchase price isn’t everything. Carefully consider the purchase contract’s other terms and conditions. Too many contingencies can leave loopholes and cause a deal to fall apart. Especially avoid contingencies that favor the home buyer, such as linking the escrow closing date to the buyer’s sale of their current home. If the buyer insists on such terms, include a kick-out clause in the contract that will allow you to consider other offers if the buyer isn’t able to sell within a certain period of time.
Assess your buyer’s financial qualifications
Is the buyer pre-approved for their home loan? Have they provided all documents to their lender and gotten a written loan pre-approval. DO NOT sign a contract with a buyer that does not have financing in place. Sellers are often stuck in a contract that a buyer can’t close and miss the opportunity to sell their home to another buyer in the process. Also, be sure you don’t waste any time showing your home to Looky Lou’s and unqualified dreamers. Send everyone to your Internet listing and pencil in a time to meet with them. Get the name of the loan officer they are working with to verify their identity (for your safety). Call the lender to confirm that they can buy your home for X then call the buyer back to confirm the appointment and confirm that they have seen your home online.
Know the home selling market
How you judge an offer can depend on market conditions. If the selling market is slow, you may feel vulnerable, especially if circumstances are pressing you to sell. Make sure any offer you accept does not keep you in escrow longer than 30 days. In a hot market where multiple offers are likely, be wary of countering more than one offer at a time (you could end up in legal trouble if two buyers both accept your counter offer). Also be wary of offers that promise more money but contain poor contract terms (long escrow, multiple contingencies, etc.).
If you feel the home’s offer is insufficient, make a counter offer. Rarely is a first offer the buyer’s absolute highest price they are willing to pay. Negotiating is part of the home selling process.
All standard real estate contracts are going to give the prospective home buyer the right to inspect your property — so be prepared. Under a general inspection you are obligated to make major repairs to appliances, pluming, septic, electrical and heating systems — or the buyer may cancel the offer. The inspection will also include your property’s roof, as well as a termite inspection (in some states, home sellers must provide proof that the home is termite free).
If you are concerned about how your home will fair when inspected, you may want to contact a local home inspector. They can conduct an inspection for you before a potential buyer has one done. This way, you can address the problems before a buyer stumbles upon them. Contact your lender or Loan Officer for a referral.
When setting the terms of sale, the main thing you are concerned with is the price. You should have a basic idea of what your home is worth by keeping track of other sales in the neighborhood. Plus, you have probably interviewed at least two real estate agents and they have given you their own ideas. Exercise great care in determining your asking price, making sure not to set it too high or too low.
In addition to the price, you will disclose what personal property, if any, goes with the house when you sell it. Personal property is anything that is not attached or fixed to the home, such as washers, dryers, refrigerators, and so on.
There may be some item that is considered "real property" that you do not intend to include in the sale. Real property is anything that is attached to the home. For example, you may have a chandelier that has been in your family for generations and you take it from home to home when you move. Since the chandelier is attached to the house, it is considered "real property" and a reasonable buyer would normally expect it to go with the house. The listing contract should make clear that it does not, and your agent should also enter this information with the Multiple Listing Service.
The mortgage lender will order an appraisal of your home to make sure they are not paying more than the house is worth. They’ll also order a land survey to make sure that the property boundaries are properly laid out. They will also order a title search to determine if there are any liens against your property. These tasks are all the responsibility of the buyer and/or their mortgage lender.
At this point too, the mortgage company will issue a loan commitment. Again, the buyer must complete all conditions listed on the mortgage commitment.
Prior to closing, you should notify your lender that you will be paying off your mortgage to find out if they will apply your escrow to your balance or mail a check. The title company can do this for you and get an approximate payoff.
The day of the closing, the home buyer will do a "final walk through" of the property to make sure all agreed repairs are completed and that the home is in the same condition as when the buyer made their offer. If problems arise at this point, the closing can still take place with funds held in escrow to remedy the problem.
Closings usually occur 30 - 45 days after you have signed the sales contract. Depending on what state you reside in, you may close with an attorney, or with a title company. At the closing, all monies will be collected, any existing loans or leans will be paid, the deed will be transferred, and insurance will be issued insuring a free and clear title. The home seller will receive the proceeds of their home equity at the closing although it can take one to two business days after the closing.
This step-by-step home selling guide is a general overview of the process when selling a home. Each state has slightly different laws and customs as they relate to the real estate transaction process.
Selling a home yourself with is easy and the financial rewards can be tremendous.
Don’t Forget, once the closing date has been arranged, you should contact your utility providers and advise them of your final service date.
