Selling Your Home
Have the kids gone off to college? Did you get that promotion in a new city? Is your home becoming too small for your growing family? Whatever the reason as some point it will come time to sell your home.
For many of us our home represents our largest investment, both financially and emotionally. So when you do decide that you want to sell it is important to sit down and have a plan. The tips I have provided you below will take you through the various stages of the home selling process and I hope that they will make the decision and process easier for you.
- Why Sell... Do you need to move out of the city? Is your home too large or too small for you? What is your timeline? Selling your home will have an impact on your lifestyle, family, and financing. If I can properly understand your goals and motivations I will be able to determine the most appropriate options for you. Whether that is selling the home, possibly renovating our home instead, or renting your home.
- Should I Rent it... In some markets it might not be an optimal time to sell your home, so one option might be to rent out your home instead of selling it. This is not a decision to take lightly. There is a lot of work involved in renting out your home: advertising, screening tenants, collecting rents, dealing with delinquencies, and maintenance to name a few. In addition, do you have the finances to buy a new home without selling your existing home? If so then this might be a good choice for you and I can help you to make this decision by providing you information on the rental market in our area.
- When Should I sell... If you have some flexibility then you can time the listing of your home in order to get top dollar. Typically the housing market starts to heat up with the weather, but this is not the only consideration. If there are a large number of homes for sale in your area you might want to wait until the inventory goes down. The less competition you face the better your home will do. Once we meet we can go over a plan and determine the most favorable time to for you to list your home. In addition, during the selling process I will keep you informed of market conditions, competing properties, and other factors that go into the marketing of your home.
- Examine the Market... Working with an agent who knows the market and has close connections with other local real estate agents is vital if you are selling your home. Pricing your home too high could result in your home sitting while others are selling, while pricing it too low will leave money on the table. With my connections in the local real estate market I have a good pulse on what sells in the region, for how much, and what else will be coming on the market in the coming weeks. I will keep you informed through the sales process of the competition, how your home is being marketing, and advice on how we can make your home stand out.
- Optimize my Finances... Once you sell your home, what implications will it have on your finances? Do you have enough equity to use it as a down payment on a new home? Will it have tax implications? Having been through this before I can give you advice on what you can expect from the sale of your home so you can properly plan for life after the sale. I also advise that you speak with your tax advisor or financial planner to help you factor in effective tax savings and estate planning strategies.
Keep in mind that this could be one of your largest financial transactions. So if you have any questions on timing, the market, or anything real estate related please let me know and I would be more than happy to provide you with personalized advice.
Select an Agent
Hiring the right person to market your homes is crucial. The agent that you choose will be responsible for determining an optimal price, marketing your home, and negotiating the price. Make sure that you are methodical in your approach to finding an agent and that you interview several agents to find who will properly represent your property.
- Should you use an Agent... There is a reason why more than 90% of home sellers use an agent to sell their home. Selling a home for top dollar takes a professional who knows the market, how to negotiate, and how to aggressively market your home. Sure, it is tempting to try to sell on your own in order to save out on paying the commission, but try to resist the urge. The fact is that homes sold by the owner typically sell for less, are on the market longer, and have more complications during the closing process. The time and energy that you will have to put in as well as the money you might leave on the table are just not worth it.
- How to Pick an Agent... I am sure that there are a handful of agents that you know or are possibly even related to, choosing them just on that relationship is not a good idea. My advice would be that you keep them in the mix, but also talk to other agents that are visible in your area. I would recommend that you speak with 3-4 different agents in order to assess how they will represent your property. I have included some things to look for in an agent as well as some questions you might want to ask when you meet with the agent.
- Pricing... It is not all about the price. We all want to hear that our home is unique and worth $100K more than every other property in the vicinity, but how realistic is that? If several agents tell you they would price your home for $600K (backed by comparable homes) and another comes in and tells you $750K - then be cautious. Improperly pricing your home in order to get the listing could result in your home sitting on the market while others are sold.
- Experience... When it comes to selling your home you want to look for someone who is recognizable in your area. Does their name come up in conversations with others? Do you see their signs on other homes? Are they someone who knows how to market a home? Chances are that if you see their marketing that when they list your home others will see their marketing as well. It is also important to get a full time agent who is familiar with your area and the type of property that you are selling. Someone who has been in the area for a while will likely have the connections to make sure your home is showcased with other brokers, who will then bring their buyers to view your home.
- Availability... Communication during the home selling process is key, so you need an agent who you can get in touch with. Make sure that you are listing with an agent that you can get in touch with and who you do not need to constantly leave messages for. If you pick an agent that you have a clear channel of communication with it will make the selling and showing process much more pleasant.
- Personality... Do you want to put the sale of your largest asset in the hands of someone you do not trust? Do you want to spend months with someone that you do not like? Having a connection with your listing agent will ease the home selling process, a process that typically takes several months. Does your agent take the time to learn about your unique situation and goals? A listing agent is a guide and partner to you in this time so it is vital to have someone that you are comfortable with and in whom you have confidence.
My philosophy is that I will wore tirelessly to earn your business, keep your business, and impress you so much that you tell other people about me. When you select me as your listing agent I will make sure that the deal is handled efficiently, successfully, and for top dollar.
Prepare and Staging
- Curb Appeal... First impressions are important, they set the stage for all future interactions. Curb appeal is that feeling that someone gets when they first pull up to your house. Keeping your landscape and hardscape tidy and in good order will go a long way to getting your additional dollars added onto the sales price. Make sure to trim and water sufficient to get the flowers blooming and the grass green.
- To Repair or Not... When you are selling your home, some repairs can go a long way to getting your home sold quickly and at top dollar. I advise people to avoid projects that are more about their lifestyle - for example putting in a pool - and instead look for the items that give you the biggest bang for your buck. Cosmetic changes such as painting, new doorknobs, and new hardware for your cabinets will spruce up your home without breaking the bank. If you have questions on which repairs or remodeling will help you sell then let me know and I can provide some expert guidance. I also have a list of contractors I have worked with in the past that I can pass along.
- Staging... If your home is not showing well, it might need to be staged. Potential buyers want to walk into a room and imagine what it would be like for them to live there. Sometimes they are not able to look past the 70's floral couches, your personal touches, or the heavy drapes to see the raw potential of your home. In some cases it might make sense to bring in a staging company who will match the property with modern furniture that home buyers are looking for. It really depends on the home and market, but if you are interested in staging we can definitely provide this as a service. The cost incurred might just be offset by higher and faster offers. Even if you do not go the professional route, you can still do little things like removing clutter or items you rarely use, keeping the house clean, washing the windows, and using fresh scents throughout the house.
- Showings... When it comes to showings you want your home to put its best foot forward. The staging we spoke about above is part of it, but you also want to make sure that you are able to have your home in condition to show with little notice. Make sure that the toys are putting away, clothes not scattered around, beds are made, and that the clutter is at a minimum. It will help the buyer to better visualize themselves in the home. I also recommend that you not attend the showings, buyers are typically less comfortable asking questions when you are present. Don't worry, I will give you a full briefing on their feedback. Some final touches you can make are to turn on lights, some soft music, and other desirable items you may have that will increase the ambiance of your home. I know some people who will also make a batch of cookies prior to showing in order to have the buyer walk into a pleasant smell as well as eat some tasty treats.
- Disclosures... When you sell your home you should make sure that you have your disclosures in place. There are all the standard forms which I am familiar with and will be able to walk you through. There is also the disclosure you will make as to the condition of the house and any items that you think the buyer should be aware of. If there are on-going maintenance items you should let them know now so that they do not come back after the sale to claim that the property was not properly represented. Once more I can go over these with you to make sure that everything is in order.
- Inspections... Inspections are part of the process. With such a large transaction everyone wants to do their homework to make sure that no major problems arise after the sale of the home. I typically suggest that you conduct some inspections (such as pest and termite inspections) upfront in order to clear the way once the offer is made and to stand out from the competition, you would do these inspections before or just as you place your property on the market. The buyer will also likely have a home inspection done on the property once the offer is made and might come back with requests to correct items. We will discuss this in more detail later.
Showing off your home to its full potential is critical for getting top dollar. If you have any questions on how you can stage your own home to show off the best deatures let me know and we can schedule a time to view yrou home and adivse you on some of the steps or changes to make.
Once you put your home on the market then buyers are going to start looking at it and sooner or later one, or more, of those buyers are going to make an offer. While an offer is good news, this offer might just be the first step in a longer negotiation. I have included some tips below that will guide you through what to expect during the offer stage of your home sale.
- Initial Offer... Once a buyer fills out the Residential Purchase Agreement and submits it to your agent you have your first offer. Despite the name, this offer is not legally binding until you agree to the terms and sign the offer. Typically a buyers offer will included a price, down payment, who pays the closing costs, and any contingencies that the buyer might need or ask for. With the offer in hand you have 3 choices: Counteroffer, Accept, or Reject.
- Counteroffers... In most negotiations the initial offer is one that is going to favor the person who is submitting the offer. This might vary depending on the market and the individual, but most people submit an offer with the expectation that there could be some negotiating back and forth. This is where I come in. Using my knowledge of the market I can let you know how strong the offer is and whether we counteroffer or accept. Working together we would submit a counteroffer to the buyer with some change in the offer price, down payment, contingencies, and a deadline on when they must reply. The buyer now has the ability to accept, counteroffer, reject, or just let the document expire.
- Rejecting an Offer... Rejecting an offer can come in the form of formally rejecting an offer or just letting an offer lapse. In most cases, unless we have too many offers or the offer is ridiculous I recommend a counteroffer. My suggestion is to take the emotion out as much as possible and not be insulted by lowball offers, they made an offer, it is a starting point, and now you counteroffer with what is acceptable.
- Contingencies... In most cases the offer from the buyer is going to include contingencies that need to be met by in order for the deal to go through. These can even be a negotiation point - for example that the buyer must perform inspections within 10 days. These contingencies are conditions that must be met before the agreement becomes legally binding. My experience allows me to help you to navigation through these contingencies and know which ones to stay clear of.
Negotiation: It’s my job to find an agreement that’s beneficial to all parties involved and meets your desired home sale goals. You may have to deal with several counter offers and/or multiple offers before accepting the terms you judge to be the most suitable for you. As your agent, I will provide a thorough and objective assessment of these offers to help you make the right choice. Here are some other things to think of while in the offer stage:
- Avoid Emotional Decision making... Letting go is not easy. It is likely that you have so many memories tied up in the property. So try not to take comments made by buyers and lowball offers personally.
- Rely on your Realtor... My role is to act as your representative and to negotiate the best deal for all parties involved. No matter how experienced you are in negotiations, please rely on me to act as the lead and secure you the best outcome. I know the market and am the subject matter expert here. I will make sure to keep you in the loop on all communications, offers, and behind the scenes conversations.
- Make a Counteroffer... I would not say to always make a counteroffer, because it will always depend on the market, but I typically think counteroffers are needed. If you have a buyer who makes a low offer do not be insulted, they have an interest and it does not hurt you to make an acceptably counteroffer.
- Price isn't Everything... Whenever I get an offer the seller always wants the bottom line in terms of the sales price. It is hard not to fixate on the sales price, but it is only part of the picture and does not actually represent the profit you might get. The buyer with the higher offer price might not have financing in place, need a longer escrow (more mortgage payments for you), have contingencies that they might not be able to meet, or be asking for additional repairs. When I represent your home we will go over all these items to make sure that you are getting the optimal deal.
- Move quickly... While it may be tempting to wait and see what other offers come in, I have seen many time where the first offer is often the best one and sometimes the only one. If the offer is close to what you had hoped for, keep the momentum going and make a counteroffer so the buyer doesn’t have time to lose interest.
Congratulations, you are officially in escrow. This means that once the contingencies are met and the final inspection takes place you will be able to move out and into your new home. There is still work to be done so hold off on the Champagne, but you can put it on ice. I have provided some feedback that I have learned over the years to guide you through the process:
- Escrow Begins... Escrow begins once a valid offer is accepted by either the buyer or the seller. Once escrow begins an escrow company will hold the buyer initial payment and also be involved in the full transfer of funds at the end of the deal.
- Title Company... In most cases you as the seller will pick the title company. The title company will perform an evaluation of your property to make sure that it has a clear title. Once the evaluation is done they will certify that: the title is free of encumbrances (liens, mortgages, etc...) and that all new encumbrances are duly included in the title. The title company will then prepare a report on the title history and present it to you.
- Contingencies... With the down payment in the hands of the escrow company and the title certified it is time to address those contingencies. In most cases the buyer will be the one who is involved in handling the contingencies. However it you promised repairs you will want to get started on those.
- Inspections... One of the contingencies will be that the home passes inspections. There are pest, termite, and a general home inspection that the buyer can do on the property. This is to ensure that when they take possession of the home that it is in good repair. The buyer will typically hire someone to perform the inspection and will let me know when they will be coming out to perform the inspection. The buyer will get a report on the state of the property from the standpoint of a professional.
- Repair Requests... In some cases, the property inspection performed by the buyer will turn up some items that they will want repaired. One of the contingencies is that the property passes the home inspection, so a red flag on the home inspection can result in the buyer walking away, renegotiating the sales price, or you making the repairs. The actions we take will vary depending on the offer, the scope of the repairs, and the market so in the case this happens I can guide you on the best decision to make.
- Appraisal... Unless you have an all cash deal, the lender will require that a property appraiser evaluates the property to determine the value. Expect an appraiser to come out to the property to examine it in order to verify the sales price is appropriate. If they feel that the value of the property and the down payment does not add up to the sales price, the buyer will either need to come up with more cash to put down, find a different lender/appraiser, or walk away from the deal.
- Packing and Moving Out... Whew. With all the contingencies met and the financing secured it is finally time to pack your bags. If you need any assistance in finding a reputable moving company please let me know and I will be able to provide you with some companies that previous buyers and sellers of mine recommended.
Buying a New Home
Now that your home is on the way to a successful close, it is crunch time to start preparing for your next home. The good news is that by this point you are no longer a first time homebuyer and have some experience with what to expect while buying a home. I am always here to help you and have provided some links to resources on my site that you can use to search, save properties, or get some refresher advice on what to expect when selling your home.
- Searching for Homes
- Featured Homes
- Financing Options
- Buying Advice
Close of Escrow
- Final Walkthrough... At the end of escrow the buyer will do a final walkthrough with me and the buyer's agent. This walk through is to ensure that the condition of the house is the same as when they signed the paperwork. In addition, if you that any furniture or appliances that were negotiated into the deal are still in the home. Be prepared as the buyer might ask questions at this time on the home such as: where is the water shut-off, how do the sprinklers work, etc...
- Cancel Home Services and Utilities... Don't forget that the utilities and services are still in your name. Make sure to contact the various utilities and let them know to shut off power, water, cable, and any other services you have on the date that escrow closes. The buyer will then need to call up to set up those services in their own name.
- Be Prepared... The game is almost over, but last minute glitches can pop up. Be prepared for some unforeseen items that might crop up, but be assured that I have been through them and can handle it. I have encountered various last minute problems before and have the experience to make sure that they are handled quickly and efficiently.
- Close of Escrow... Congratulations. Escrow has closed. The escrow company will provide you with a closing statement which summarizes all the financial transactions which have taken place during the process. You will have some final documents to sign right before the closing date. Once all is signed and ready, the title company will record the transaction at the county recorder's office. The money will then be transferred to you and the buyer will have become the owner of the home.
- Keys... I will get the keys from you and deliver them to the buyer or the agent once the deed has been recorded at the county assessor's office and you have moved out. In most cases, the contract allows for 1-2 days for the seller to move after the closing date. If you need more or less time we can make sure to notate this in the contract.
Now it is time to break out the Champagne that you put on ice. You have completed the successful sale of your home and hopefully are about to move into a new home where you will make a whole new set of memories.