Selling Your Home

Selling Your Home

Step1: Define & Analyze Your Needs

Make a list of the reasons for selling your home. Ask yourself, “Why do I want to sell and what do I expect to accomplish with the sale?” For example, a growing family, a school or sports opportunity for your child, a new job transfer, marriage or divorce, becoming an empty nester, or retirement may prompt your need to move. Whatever your reason is, it will affect how you price, time, and market the sale of your home. Set realistic expectations and timelines based upon your reasons for selling, along with the current conditions of your local real estate market.

Make a list of your specific goals, such as selling your home within a certain time frame, or your expected profit margin. Work with your real estate agent to map out the best path to achieve your objectives and set a realistic time frame for the sale. Your realtor can save you time and money by applying their expert knowledge to your particular needs and setting a realistic time frame for the home selling process. They can explore all of the variables affecting your individual goals and how best to achieve them in your local real estate market.

Step 2: Pricing Strategy

Your next objective is to determine the best possible selling price for your home. Setting a fair asking price from the beginning will generate the most interest from other real estate agents and home buyers. Don’t let preconceived pricing ideas harm your ability to sell before you start the home selling process. You absolutely need to take into consideration the condition of your home, what comparable homes in your neighborhood are selling for, and the state of the overall real estate market in your local area.

Your realtor can save you time and money by educating you on how to set the asking price for your home. It’s often difficult to remain unbiased when putting a price on your home, so your real estate agent’s expertise is invaluable at this step. Your realtor will know what comparable homes are selling for in your neighborhood and the average time those homes are sitting on the market. Your realtor will create a comparative market analysis by taking into consideration the type of market you are in (for example a buyer’s or seller’s market) and recent sales of comparable properties. Your realtor will then guide you to the best fair market price that will help sell your house within your desired time frame. Usually, real estate agents have a better sense of market value than anyone else, appraisers included!

Remember, it’s usually better setting a fair market value price, rather than pricing your home too high. If your home sits on the market for too long, potential buyers may think there is something wrong with the property. Often, when this happens, the seller has to drop the price below market value to compete with newer, reasonably priced listings. If you’re still unsure on your pricing strategy, you can get an objective opinion on the price of your home from an uninvolved party. A home appraisal typically costs a few hundred dollars.

Step 3: Prepare Your Home

Most of us don’t keep our homes in “showroom” condition. The condition of your home will affect how quickly it sells and whether or not you get full market value from your buyer. First impressions are very important and you only get to make one!

Look at your property from a home buyer’s point of view, rather than a homeowner’s. What needs to be changed to make a good first impression? Will you need to repaint? Repair broken fixtures? Clean up or landscape the yard for better curb-appeal? Organize cabinets or the accumulation of boxes and things in your garage?

When showing your home during the day, pull back your curtains to let in bright natural lighting. If you are showing at night, turn on all of the lights to create a warm and welcoming environment for the prospective home buyers. Simple things like removing distracting clutter may go a long way towards increasing the value of your home in a buyer’s eyes.

A house that is marked with your personality and style may be harder to sell. Bright paint may need changing. Personalized wall and table decorations, family photos or literature may need to be minimized or removed. This will reduce distractions and help the buyers to visualize the home as their own.

Also, removing yourself and possibly pets from the home during showings may help the buyer to relax and picture himself as the homeowner.

Your realtor can save you time and money by providing an objective and expert opinion on what needs to be changed or improved. They know what home buyers are looking for because they are working the real estate market every day.

Step 4: Market Your Home

Now that you’re ready to sell, your real estate agent will set up a home sellers marketing strategy customized for your home.

There are many ways to market your home and get the word out:

  • The Internet
  • Open houses
  • Yard signs
  • Agent-to-agent referrals
  • Media advertising
  • Email campaigns
  • Direct mail marketing campaigns

In addition to listing your home on the MLS, your realtor will use a combination of these tactics to bring the most qualified buyers to your home. Your realtor should structure the marketing plan so that the first 3 to 6 weeks are the busiest, especially if you’re in a buyer’s market. If you don’t get any traffic within that time frame, you may want to reconsider your approach.

Step 5: Receive An Offer

When you receive a written offer from a potential buyer, your real estate agent will first find out whether or not the individual is pre-qualified or pre-approved to buy your home. If so, then you and your realtor will review the proposed contract, taking care to understand what is required of both parties to execute the transaction.

The contract should at least include the following:

  • Legal description of the property
  • Offer price
  • Down payment
  • Financing arrangements
  • List of fees and who will pay them
  • Deposit amount
  • Inspection rights and repair allowances
  • Method of conveying the title and who will handle the closing
  • Appliances and furnishings that will stay with the home
  • Settlement date
  • Contingencies

At this point, you have three options: accept the contract as is, accept it with changes (a counteroffer), or reject it.

Remember: Once both parties have signed a written offer, the document becomes legally binding. If you have any questions or concerns, be certain to address them with your real estate agent right away. Your realtor can save you time and money by making sure that the offer is presented to you by a qualified pre-approved home buyer. There is no reason to review an offer if the person(s) making it will not be able to actually buy your home.

Step 6: Negotiate To Sell

Most offers to purchase your home will require some negotiating to come to a win-win agreement. Your real estate agent is well educated on the intricacies and legalities of the real estate contracts used in your area, and will protect your best interest throughout the negotiation process. Your realtor also knows what each real estate contract clause means, what you will net from the sale of your home, and what areas are easiest to negotiate.

Some negotiable items:

  • Price
  • Financing
  • Closing costs
  • Repairs
  • Appliances and fixtures
  • Landscaping
  • Painting
  • Move-in date

It’s important to know as much about the home buyer as possible, especially their motivation for buying. Once both parties have reached a point where the deal is acceptable, your realtor will prepare a legally executable contract.

Step 7: Selling & Preparation To Close

Once you’ve accepted an offer to sell your house you need to make a list of all the things you and the buyer need to do in order to proceed successfully to closing. The property may need to be appraised, inspected or repaired. Depending on the specifics of negotiations, you may or may not pay for these items. If each step returns acceptable results as defined by the contract, then the sale may continue. If there are issues with the property, the terms set forth in the contract will dictate your next step. Depending on the contract, you or the buyer may decide to walk away, open a new round of negotiations, or close the deal.

Important reminder: A few days before the closing, you should contact the entity that is closing the transaction and make sure the necessary documents will be ready to sign on the appropriate date. Also, begin to make arrangements for your upcoming move if you have not done so.

Your real estate agent will be directly involved in finalizing the sale, and keep you informed as to the results of each action and what effect, if any, it will have on the sale of the property. Your realtor will also help you coordinate any actions you need to take to keep the sale moving forward.

Your realtor can save you time and money by making sure that all of the necessary documentation is ready for closing. Your realtor will also make sure that all parties have done what they need to so the closing process is executed on the planned date and time.

Step 8: Close The Deal

“Closing” refers to the meeting where ownership of the property is legally transferred from the home seller to the home buyer. As the seller, you need to be prepared to hand over necessary documentation regarding the property and, depending on negotiations agreed upon, you may be required to have done something specific in order to close. Be sure to read all documents as mistakes are common. Your real estate agent will be present during the closing process to guide you and to make sure everything goes smoothly. By being present during the closing, he or she can mediate last-minute issues that may arise. In some states, an attorney is required and you may wish to have one present. After the closing, you should make a list for turning the property over to the new owners.

Pre-Closing Checklist:

  • HUD-1 and Good Faith Estimate: Your lender is required to send you at least 24 hours before your closing. The HUD-1 statement lists exact closing costs you must pay. Your lender will also send a copy of the good faith estimate of these closing costs. If the charges seem to have changed too dramatically, bring both forms to the closing table. You can dispute the charges then, or stop the closing altogether.
  • Paying For Closing: Closing is not free. The average home buyer will pay $3,754 in closing costs for a mortgage loan of $200,000, according to Bankrate.com’s 2012 survey. Before you arrive to the closing table bring a certified or cashier's check, not a personal check, made out in the amount you'll need to cover the closing costs listed on your HUD-1 settlement statement. If you’re not required to bring money to closing, the amount will be rolled into your mortgage loan.
  • Homeowner’s Insurance: Before your lender approves your mortgage loan, you'll have to take out homeowners insurance. Make sure to bring confirmation of your new policy to the closing table unless your realtor has secured it for you.
  • Identification: Make sure to bring a form of photo ID, such as your driver's license, to the closing. Your title insurance company will need to make a copy of the photo ID’s identifying anyone whose name will go on the mortgage paperwork.

Post-Closing Seller’s Checklist:

  • Cancel electricity, gas, lawn care, cable and other routine services.
  • If the new owner is retaining any of the services, change the name on the account.
  • Gather owner’s manuals and warranties for all appliances remaining with the property.

Post-Closing Buyer’s Checklist:

  • Paperwork: After the deed and mortgage have been recorded you will receive the deed and your copy of the title insurance, in about a month. Keep copies of all paperwork, including your home inspections and mortgage appraisal.
  • Payment Book: Included in all your paperwork is a payment book to be used when submitting your mortgage payments. Note the due date and mail payments ahead of time. If your loan has been sold to another entity, the new loan servicer has 60 days to inform you of where to send your payment. Keep records of all payments and correspondence.
  • Escrow Funds: If taxes and insurance are included in your mortgage payment, be sure the appropriate funds are deposited into your escrow account. Follow up when taxes are due to be sure they’ve been paid, and do the same with your hazard insurance.
  • Home Warranty: If you’ve purchased home warranty insurance, keep copies handy in case of necessary repairs. Home warranty insurance typically costs a few hundred dollars a year, with at least a $50 per service call fee. A home warranty may make maintaining your home easier, as it may cover the costs to repair or replace expensive appliances. Make note of your individual policy coverage and limitations.
  • Year-End Reports: At the end of the year, your loan servicer sends a statement noting the amount you’ve paid in taxes, insurance, principal and interest. This information is necessary to prepare your income taxes.
  • Saving’s Reserves: At year-end, insurance companies may issue a notice of increase. Your property taxes may also be more than the amount scheduled to be deposited in your escrow account. Save funds to cover these potential expenses. Also, as your property taxes are based upon the assessed value of your home, you may need to submit an appeal to your county Assessor if the value of your home has decreased. The San Joaquin County Assessor: http://sjgov.org/assessor_recorder/