Real Estate Sellers Tips
Planning The Sale
Once you have made the initial decision to sell, you will immediately be faced with another tough question - is it best to hire a real estate sales agent or try to sell the house yourself?
To sell and market a house requires specialized skills, is time consuming, and costs money. Are you prepared to buy advertising space? Advertising is one way to let the buying public know your house is on the market. If not, can you afford the time it will take to sell your house with only a sign in the yard? Are you willing to stay close to home for days, weeks, maybe months to show your house? Do you possess the necessary legal and financial knowledge to answer the buyer's questions, negotiate a contract, or close a sale?
If you answered "No" to any of the above questions, perhaps hiring a real estate agent to help would be the most efficient way to sell your house.
A real estate agent can be indispensable to you in the following ways:
- Access the Multiple Listing Service (MLS) to give your home the most exposure
- Assist with pricing based on Comparative Market Analysis
- Provide a detailed marketing plan
- Screen potential buyers for financial qualifications
- Suggest ways to make your property more attractive to buyers
- Show your home whether or not you are there
- Answer potential buyers' questions
- Present all offers
- Assist with negotiating the best sale price
- Facilitate the closing process
Timing the Sale
While the overall health of the market has the greatest impact on your sale, the date you put it on the market can also be important. The real estate marketing calendar generally has two distinct peaks and valleys created by ebbs and flows of activity in your local real estate market. You can use the predictability of these cycles to your advantage.
Depending on where you live, the longer and stronger of the two annual peak seasons begins somewhere between January and March. Markets in cold weather climates may take a little longer to get started.
February through May is normally the most active selling time for residential real estate. Families with children want to get their purchase or sale out of the way by late spring so moving won't disrupt the kids' schooling for the next academic year. Other people buy or sell early in the year for tax purposes, or to avoid interference with their summer vacation.
The first peak season is usually the best time to put your house on the market. High sale prices can result from spirited buyer competition during this time of year.
In some markets, Memorial Day tends to mark the beginning of the first valley. Sales activity usually slows during June, July, and August. Buyers, sellers, and agents often take summer vacations, which reduces the market activity. Many folks spend their weekends having fun in the sun rather than looking at houses.
This season is still a good time to put your property on the market. Houses might take somewhat longer to sell in the summer due to a slightly lower level of buyer activity, but again, it depends largely on the conditions of the local housing market.
Labor Day usually starts the second peak season. This peak normally rolls through September, October, and into November. People who sell during late autumn tend to be strongly motivated.
Some of these buyers are calendar-year taxpayers who sold houses earlier in the year and want to buy their new home before December 31st so they can pay tax-deductible expenses (such as the loan origination fee, mortgage interest, and property taxes) prior to the end of the year to reduce the impact of federal and state income tax.
The second peak season usually slows again a week or so before Thanksgiving. The exception to this are those few determined sellers and bargain-hunting or relocating buyers who stay in the market until the end of December.
One thing that many sellers do not realize is that November and December actually have the best exposure ratio of any other months of the year. It's true that February and March produce the highest amount of home sales, but when you compare the percentage of sales to the total number of new properties that come onto the market, November and December prove to be extremely good months to sell your home.
A large part of what contributes to this high rate of exposure is that there are fewer homes listed during November and December, resulting in fewer "new on the market" properties. In other words, there is not as much competition for sales, so homes have the potential to receive much more exposure than it would during the spring and summer months when there are significantly more homes on the market.
The Right Price
Determining the "right" selling price for your home will take some work. If the set price is too low, you could lose thousands of dollars. If it is too high, the home may not sell within your time frame, costing you time, money and anxiety. The "right" price is a balance between the maximum amount the current housing market will allow, your "competition", and your own time limits in selling. A reasonable time frame for selling a house may be between 30 and 90 days. If a house is on the market too long, potential buyers may avoid the house, wondering if something is wrong with it.
An excellent first step is to have a Comparative Market Analysis done on your house. This information details the current housing market in your area, showing you what houses similar to yours have sold for recently. The market analysis should also list your "competition" - houses like yours which are also on the market. With this information in mind, you will also want to consider the following points before deciding:
With these points in mind you should be able to determine a fair price for your house. A word of caution: Avoid the temptation to "pad" the price excessively, thinking it will give you negotiating room. Most buyers have limitations on how much they can spend. If your property out-prices other properties in the neighborhood, it could remain on the market longer than you wish. Even though you may be planning to lower the price later, studies show that the longer a house is on the market, the lower the selling price is when it is finally sold.
Although not a specific part of the price setting process, concerns about the amount of profit realized from the sale, tax regulations regarding the sale of property, and settlement or closing costs should be addressed. This is particularly true in markets with a predominance of FHA/VA buyers or areas where lender "points" are absorbed by the seller.
Anticipated costs of selling include the mortgage pay-off amount, any early pay-off penalty, the real estate broker's fee, other loans against the property (perhaps for a pool or room addition), the price of inspections, taxes, and other seller's costs. Your net profit can be estimated by subtracting these costs from the sales price. But, remember, this is only an estimate. Any change in the numbers or closing date will alter the final figure.
If your lender charges a penalty for paying off your mortgage before its due date, the amount charged is usually deductible.
Homeowners may also qualify for an immediate deduction of many of these costs if the move is prompted by a job transfer to another city, and the costs are not reimbursed by the employer.
For further tax information, consult a tax accountant specializing in real estate matters in advance.
Closing costs will vary from area to area. Your real estate agent can provide categories and the approximate amounts of settlement costs you will be expected to pay. These may include various fees and miscellaneous closing costs negotiated by the buyer to be paid by the seller.
In many states pest inspections and termite reports are required before a house can be sold. Even if these inspections are not state mandated, most lenders will require them. If termites are discovered they must be eradicated, and the proof documented. Inspection prices vary. Shop around for a good price, but use a reliable company. Check with your real estate agent about the laws in your state.
The Listing Agreement
After choosing a real estate company, you are ready to sign the listing agreement. This agreement will state how much brokerage fee, or "commission," shall be paid, who will receive it, who has the right to produce potential buyers, and how long the agreement is valid. It should also include a list of personal property that will go with the house. The length of the listing contract will vary.
In the "Exclusive Right to Sell" agreement, the listing company is entitled to a commission regardless of who sells your property. If another office produces a buyer the commission you pay is shared between the two companies.
A listing agreement is a binding contract. Read it through carefully and ask questions until you understand every part of the agreement before signing.
When the time comes to negotiate a sale, it is best to be aware of current financing available to the buyer. With the help of your real estate agent, review the mortgage climate - are loans in abundance or hard to obtain? If the buyer isn't able to qualify for enough money, you may want to offer a second mortgage out of your profits (if this is allowed by the first lender). Does your property qualify for VA/FHA loans? Is your current loan assumable?
Does the buyer expect you to pay any of the discount points connected with the cost of his loan? Determine your time limits in waiting for financing to be secured by the buyer, including alternatives.
Preparing To Sell
Of course, any major repairs should be completed before showing the house to get the best price possible. Limit your repairs to functional parts of the house, such as the roof, plumbing, and major appliances. Cosmetic changes like new carpeting and draperies may not match your future buyer's tastes, and could even discourage the sale.
The key words to remember in preparing your house are neat and clean... sparkling clean... clean enough for royalty to visit. Take a look at your house as if you were seeing it for the first time. You may not notice crowded closets and untidy flower beds, but potential buyers will!
Make a list of jobs and begin work today.
All offers for your property must be presented. Your real estate agent will counsel and advise you, but the final decision will be yours. Review every offer, comparing the financial qualifications and readiness to buy of each buyer.
When you decide what terms are acceptable, let your agent negotiate with the buyer. The agent will review all costs you are willing to pay and what you expect of the buyer. A suitable deposit will be collected from the buyer prior to any acceptance of their purchase offer. A written agreement stating all conditions of the sale will be signed by both parties.
Now comes the time to sit back and be patient. The buyer is busy arranging mortgage financing. The real estate company and the title company are beginning to accumulate data and prepare documents. The agent is checking on the progress of the sale. You can concentrate on the important matter of packing and moving to your new home.
Final closing day will be scheduled when all the steps are completed. Both parties must sign the final closing documents. Once you present the deed to the buyer and receive a check in the amount agreed upon, your house is successfully sold.
Organize a Successful Garage Sale
It's amazing what you find when you look at all of the things you have accumulated while calling this house "home". Now that you look at it, you wonder "Why on earth did I buy that?". It's time to clean house and prepare for the big move, or maybe it's just time to make room for more shopping. Whatever the reason may be, the solution is usually the same... a garage sale. But with so many garage sales springing up, how do you organize a successful and noticeable garage sale?
- PreparePick a date (weekends are best); rummage through the house, attic and basement for items that are in reasonable good shape; and decide on a fair price for each item by searching auction and classified Web sites for similar items. Use bright, clearly marked price tags on each item.
- AdvertiseHang fliers at your local supermarket, Laundromat and church, e-mail friends and family, and post ads in the local newspaper.
- OrganizeSort and display items according to categories to make browsing easier - hang clothes on a line, separating women's, men's and kids' clothing. Keep toys in bins.
- DecorateHang balloons and streamers to draw traffic. Plus, it's festive!
- Save your props!Use tables shelves and other props to display items better and get them off the ground (it makes everything look more important!). Be sure to mark them as "not for sale."
- Create visual displaysSet up a table with dinnerware and flatware, or arrange a desk with office supplies - the more visible the products, the better the sales.
- Sales staffEnlist your family to assist shoppers - kids can demonstrate how toys are used, and someone in your family might just remember how to work that old stationary bike.
- Today's specialOffer discounts throughout the day to motivate shoppers and amuse yourself.
- Customer serviceOffer shoppers a bag with handles if they are buying a bunch of stuff, or designate an area where they can put intended purchases on hold. Mark larger items with signs that say "price includes delivery" for shoppers who didn't bring a big-enough car.
- Point of saleCreate a check-out area in a visible central location where customers can be greeted and thanked. Use old newspapers to wrap delicate objects, and use plastic grocery bags for other purchases.