- Is there a best time to sell my house?
- Are there important factors to consider when selling a home?
- How long will it take to sell?
- What should I do to get my house ready?
- Should I make repairs?
- What are my obligations to disclose?
- Must I disclose the terms of other offers?
- Are there standard contingencies in an offer?
- Should I be flexible in granting contingencies?
- What do I do if my house isn't getting any activity?
- Is it possible to sell for less than my mortgage?
- How will a foreclosure effect my credit?
- How long will a bankruptcy or foreclosure stay on my credit report?
- Is it possible to refinance after bankruptcy?
Property sells year round. It is mostly a function of supply and demand, as well as other economic factors. The time of year you choose to sell can make a difference in the amount of time it takes and the final selling price. Weather conditions are often a consideration in some states than in other parts of the country. Generally the real estate market picks up in the early spring.
During the summer, the market usually slows. The end of July and August are often the slowest months for real estate sales. The strong spring market often places upward pressure on interest rates, many prospective home buyers and REALTORS® take vacations during mid-summer.
After the summer slowdown, sales activity tends to pick up for a second, although less vigorous, season which usually lasts into November. The market then slows again as buyers, sellers and REALTORS® turn their attention to the holidays.
The supply of homes on the market diminish because sellers often wonder whether or not they should take their homes off the market for the holidays. There are still buyers in the market place, but now those buyers have fewer homes to choose from. Those homes on the market at that time have considerably less competition. Generally speaking, you’ll have the best results if your house is available to show to prospective buyers continuously until it sells.
The two most important factors are price and condition in selling a home. The first step is to price it properly. Then, go through the house to see if there are any cosmetic defects that can be repaired.
A third factor is exposure. It is also important that the home gets the exposure it deserves through open houses, broker open houses, advertising, good signage and listing on the local Multiple Listing Service, as well as the internet.
Choose the real estate REALTOR® that you believe will get the job done, not the one that quotes you the highest price – sometimes just to buy your listing. Question 3: How much is my home worth?
There are two methods many people use to determine their homes value, an appraisal and comparative market analysis.
Appraisals vary in cost and are defendable in court. They average about $300 for a single family home and more on multi-family dwellings. Appraisers review numerous factors and base information on recent sales of similar properties, their location, square footage, construction quality, excess land, views, water frontage and amenities such as garages, number of baths, etc.
A comparative market analysis on the other hand is an informal estimate of market value performed by a real estate REALTOR® or broker. It is based on sales and listings that will compete with your property that are similar in size, style and location. A range of values will be determined thus arriving at a probable market value. Many REALTORS® offer a free analysis anticipating they will have a new client.
The analysis or opinion should be in writing and should involve professionally accepted appraisal techniques.
Some individuals do their own cost comparison. It may take several hours of research at the county recorders office, where there will be indexes to match street addresses and parcel numbers. Once matches have been chosen a tax card can be used to find the assessed value, size, style, number of rooms, baths, etc.
That is THE QUESTION, isn’t it! There are three main factors that affect a property’s time on the market: location, condition, and price.
Location is the one thing that you cannot control in the home selling process. In conjunction with condition and price, people choose a home based on the location and accessibility of the property. In many cases, homes will sell faster in desirable neighbourhoods because the demand is high. Take into consideration what the demand is to live in your neighborhood. Your REALTOR® can provide information on yours and surrounding neighbourhoods to help you assess this factor.
The condition of your property is also a major contributing factor to the time it will take to sell. When evaluating a home, buyers will first assess the structural condition of items such as walls, ceilings, floors, doors and windows. They will want plumbing and electricity to work efficiently. They will then consider paint, carpets and floor coverings. The front and back yards should be in reasonably good shape. If there is major damage or deterioration to any of these items, buyers will likely hesitate in making an offer. Discuss ways to cosmetically improve your home for a more rapid sale with your REALTOR® professional.
Pricing your property to sell in the current market is absolutely crucial. Obviously, the condition and location of your property should be major considerations when deciding on a price. If your home is priced too high, it will likely remain on the market longer, resulting in a lower final sales price. Your REALTOR® can guide you on appropriately pricing your property for the shortest listing time with maximum profits.
There are several additional factors that can affect the speed of a sale including: local supply and demand, marketing, and closing terms. Is there a surplus of homes for sale in your area? Are technology tools and networking resources being utilized to market your property? Are your closing terms favourable to buyers? The right REALTOR® will be able to coach you in dealing with each of these things to ensure the quickest possible sale.
Unfortunately, there is no magic time frame when it comes to selling real estate. Some properties sell before a sign hits the front yard, and others may sit for months before the first offer comes in. Your REALTOR® can provide you with the average days on the market for properties that have recently sold in your neighborhood; however it is important to remember that the variables affecting this data are not detailed in these comparables. Your REALTOR® will most likely have viewed a majority of the properties included in the comparables and can give you a better idea of why a specific property sold in the time frame recorded.
Do not to get discouraged if a sale takes longer than you anticipated. Instead, try to analyze the reasons your property is not selling and ask your REALTOR® what you can do to facilitate the process.
The way you live in a home and the way you sell a house are two different things. First and foremost, “declutter” counter tops, walls and rooms. Too many “things” make it difficult for the buyer to see their possessions in your rooms or on your walls, however don’t strip everything completely or it will appear stark and inhospitable. Then clean and make attractive all rooms, furnishings, floors, walls and ceilings. It’s especially important that the bathroom and kitchen are spotless. Organize closets. Make sure the basic appliances and fixtures work and get rid of leaky faucets and frayed cords. Make sure the house smells good: from an apple pie, cookies baking or spaghetti sauce simmering on the stove. Hide the kitty litter, and possibly put vases of fresh flowers throughout the house. Pleasant background music is also a nice touch.
The second important thing to consider is “curb appeal.” People driving by a property will judge it from outside appearances and make a decision then as to whether or not they want to see the inside. Sweep the sidewalk, mow the lawn, prune the bushes, weed the garden and clean debris from the yard. Clean the windows (both inside and out) and make sure the paint is not chipped or flaking. Also make sure that the doorbell works.
Minor repairs before putting the house on the market may lead to a better sales price. Buyers often include a contingency “inspection clause” in the purchase contract which allows then to back out if numerous defects are found. Once the problems are noted, buyers can attempt to negotiate repairs or lowering the price with the seller. Any known problems that are not repaired must be revealed as a material defect. You do not have to repair the problem, only reveal it and the house should be appropriately priced for that defect.
Items sellers often disclose include: homeowners association dues: whether or not work done on the house meets local building codes and permits requirements; the presence of any neighborhood nuisances or noises which a prospective buyer might not notice, such as any restrictions on the use of property, including but not limited to zoning ordinances or association rules.
It is wise to review the seller’s written disclosure prior to a home purchase and ask questions if it does not satisfy you entirely.
No, according to experts, sellers do not have to disclose the terms of other offers. You may disclose the existence of other offers, so that all parties are aware that they should be submitting their best offer.
Yes, the two basic contingencies in a purchase contract are financing and inspections.
That often depends on if you are in a buyer’s or a seller’s market, the condition of your home, the price you hope to get, how motivated you are to sell, as well as the quality and quantity of the offers you are getting.
Any contingencies that are negotiated are written into your contract. Both the buyer and seller can place requirements on the table during the negotiation phase.
A frequently seen contingency is regarding the sale and closing of the buyers home before they can purchase yours. Whether this requirement is reasonable, or even achievable, depends on the individuals involved. Financial capabilities usually play a major role in negotiations. Few people can afford to own two homes simultaneously, except for some all-cash buyers.
Even in a slow market, price and condition are the two most important factors in selling a home.
If a home is not getting the activity it needs in order to sell it is probably because it is overpriced for the market. The first step is to lower the price. Then go through the house and see if there are cosmetic defects that you missed that can be repaired.
The second step is to make sure that the home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage and a listing on the Multiple Listing Service and internet.
A third option is to remove the home from the market and wait for overall housing conditions to improve and catch up to the price your asking.
Finally, frustrated sellers who have no equity and are forced to sell because of a long term illness, divorce or financial considerations should discuss a short sale or a deed in lieu of a foreclosure with their mortgage lender and their REALTOR®.
A short sale is when the seller finds a buyer for a price that is below the mortgage amount and negotiates the difference with the lender.
In a deed-in-lieu-of-foreclosure, the lender agrees to take the house back without instituting foreclosure proceedings. These are considered more radical options than lowering the price.
A “short sale” is for home sellers who are upside down on their mortgage. The home’s value is less than the amount of the mortgage. A hardship must exist, then sometimes home owners can negotiate with lenders and split the difference between the sale price and loan amount, which still must be paid. A short sale is often complicated. If the loan has been sold into the secondary market, the lender will have to get permission from Fannie Mae or Freddie Mac to negotiate a short sale. Fannie Mae, the secondary market giant, has a policy of looking at each loan individually. If the loan was a low-down-payment mortgage with private mortgage insurance (or PMI), the lender needs to involve the mortgage insurance company that insured the low-down loan. Once all these issues are resolved or negotiated, the house may be sold.
Without a doubt a property foreclosure is one of the most damaging events in terms of the borrower’s credit history.
Talking to the lender who holds the mortgage note on the property might provide specific answers as the possible courses of action available to the borrower, as well as to the effects those actions might have on that person’s credit report.
In terms of the effect on credit history, a deed in lieu of foreclosure or a short sale are not as adverse an event as is the forced foreclosure.
However, even often a foreclosure or bankruptcy, there are lenders who are providing loans after 7-10 years have lapsed. The borrower will have many obstacles to overcome and will need to provide a good paper trail to the lender proving they are once again credit worthy.
Bankruptcies and foreclosures can remain on your credit report for 7 to 10 years. However, there are lenders who will consider an applicant who went through a bankruptcy as recently as two years ago, as long as good credit has been reestablished. Much will depend on when the bankruptcy was discharged and what kind of credit a borrower has reestablished since then. The longer ago the discharge occurred, the better off a loan applicant will be. Another factor considered will be the circumstances surrounding the bankruptcy. If a borrower went through a bankruptcy because his or her company had financial difficulties due to downsizing or merger resulting in job loss, that means one thing to a lender. If, however, a borrower went through bankruptcy because of overextended personal credit lines from living beyond their means, that means quite a different thing. If you have additional questions consult “Rebuild Your Credit: Law Form Kit,” Nolo Press, Berkeley, Calif.
Although a good idea, it is usually difficult to refinance after a bankruptcy. If you have been struggling but keeping current on your payments the lender may be accommodating. You first need to contact them and explain your situation. They may suggest or perhaps you can suggest a way to work out alternative payments until you recover.
Pricing to sell
Attracting buyers is the name of the game. Sellers typically have two goals:
To get the most money possible
To sell as quickly as you can.
Price is the number one factor that most home buyers use in determining which homes to view. Although the price is set by you, the seller, the value of the home is determined by the buyer.
In Nashville, we are seeing a record year for the rise in home sale prices in residential real estate, however, this varies from place to place. Having a skilled, full-time REALTOR® working for you, will make sure you don’t under/over price.
Here are some other factors to consider – recommended by experienced residential specialists – to help you sell your home. This information is not all-inclusive and does not replace the expertise provided by a Certified Residential Specialist (CRS).
- Urgency. How quickly must you sell?
- Competition. Are there just a few or many homes available in your price category and area?
- Available Financing. Does your home come with an assumable loan that is below today’s rate? What are the current home loan interest rates? What financing alternatives are available for your home and area?
- Competitive Market Analysis. Do you know what similar homes in the area sold for within the last six months?
- Expenses. What are your selling costs?
- Original Cost. Your price is determined by today’s market.
- Investment in Improvements. Potential buyers will evaluate you home (i.e. wallpaper and carpet) and may include the costs to remove or replace in their offer.
- The Cost to Build Your Home Today. A replacement value is determined for insurance purposes only.
- Personal Attachment. Prudent buyers purchase based on their emotions, not yours.
- Neighbor’s Claims. Don’t listen to what your neighbors tell you is the fair market value for you home. Other homes in your neighborhood may not be as similar as you think. Also the terms accepted by both the buyer and seller greatly affect the sale price.
- You’ll Help Sell the Competition. The “correctly priced” homes look even better if your is overpriced. Most buyers are competitive shoppers.
- Your Home Will Stay on the Market a Long Time. Did you know that 80% of your potential buyers will see your house in the first four to six weeks? If you don’t sell them then, it takes approximately three months to replace them with an equal number of newcomers.
- You’ll Lose Market Interest and Qualified Buyers. Serious buyers use the value, quality and price of similar properties as deciding factors.
- A Negative Impression is Created. People will wonder why your house is still on the market – they’ll believe something is wrong with your home.
- You (The Seller) Would Lose Money. You may have to make extra mortgage payments as well as incur taxes, insurance and unplanned maintenance costs.
- You (The Seller) May Have to Accept Less Money. Studies show that the longer a house is on the market, the greater the discount off the list price. Often a seller will accept less than fair market value in order to sell because of an approaching deadline.
- There is the Potential for Appraisal Problems. The appraiser from your buyer’s lending institution must agree that the home is worth the asking price. If the appraiser believes the price is inflated, the loan may not be approved.
As you can see, there are a multitude of factors that determine the asking price of your home. Finding this price yourself can be a long and difficult task. That is why thousands of satisfied homeowners, like yourself, turn to a residential specialist. A residential specialist has the tools necessary to compute the fair market value of your house quickly and accurately while allowing for personal considerations (such as the date by which you must sell). Your residential specialist can also confidently answer your questions about listing, pricing and showing.
A residential specialist’s goals are the same as yours:
- To get you the most money possible;
- To sell your home as quickly as you can;
- To make selling your home a pleasant and profitable experience for you.
When You Want to Price Your Home to SELL FAST…
Turn to a CRS!
The following information is from a national real estate marketing publication. It should be used only as a general guide to ranking the importance of these improvements. Many factors will affect the appraiser’s opinion of these improvements including, location, value range of home, market trends, age of home and quality of improvement.
Click tabs below to find specific percentages of your investment that can be recouped at resale
A kitchen update can reward a seller with a sizable payback. Just remember though; splurging on fancy finishing materials or sophisticated equipment may cut into your profit. Keep it simple.
Revitalized Lawn and Garden
A verdant lawn and a modest but colorful flowerbed will entice potential buyers. The few hundred dollars invested may yield several thousands in profit.
Especially if it is energy efficient, such as a gas-powered model, a fireplace holds the promise of cozy family gatherings around the warmth of the hearth.
All it takes is a simple 5×9 foot extra bath to make mornings more civilized for most families. But don’t count on a return on extras like a heat lamp or whirlpool tub.
For the most attractive return of your investment dollars later on, the added room should be today’s popular family room or a third bedroom.
A master bath is on many buyer’s list, so invest here. If you own only one bath, install two sinks or a double vanity to handle the morning crowd.
Expanded Master Suite
To keep costs down, try to find extra space to create this wish list item by combining existing rooms and spaces. Heavy structural work entailed by adding square feet diminishes your return.
Outdoor living space is a desirable asset no matter where the locale. No maintenance decking material leaves lots more leisure time, too.
Sprucing up tired siding, trim, etc., can take years off the look of an older house.
You can expect to recoup more of your investment if you make sure the renovation does not detract from the aesthetics of your home. It is especially attractive as an extra bedroom in a small house.
This is a great way to gain added living space without building a costly addition. If the basement has an access door to the outdoors, the project becomes more valuable.
Replace it only if your old system is dysfunctional. Depending upon a buyer’s priorities, a new energy efficient furnace may or may not be a selling advantage.
New Windows and Doors
Buyers appreciate changes that improve the look of a house, so attractive new French doors, for example, may be a plus. Energy efficient units are an ecological boom, but may be a resale bust.
Don’t go overboard to blend it into your home’s architectural style. Its desirability increases if you live in a part of the country with a harsh climate.
Unless you live where the sun always shines, such as Southern California, this luxury item can detract from your resale profit.
22 POWERFUL QUESTIONS TO ASK A REAL ESTATE REALTOR® BEFORE YOU SIGN A LISTING CONTRACT TO SELL YOUR HOME
- How long have you been selling real estate?
- What is the percent of Sellers compared to Buyers that you serve?
- Can we cancel the listing if we’re not happy?
- Do you have a licensed personal assistant?
- Do you recommend that I hire an attorney?
- May I see your resume or personal brochure?
- What systems do you have in place that will keep you in constant contact with me during the listing and the transaction?
- Are you fully automated with your own personal computer, fax machine, copier, pager, mobile phone, etc.?
- May I see all the paperwork that you are going to ask me to sign?
- What professional designations do you have?
- I want to give my home the advantage of the latest marketing strategies. How much time and money do you invest each month in professional training?
- Why are you personally motivated to sell my house?
- Why should I list with you rather than any other REALTOR® who is calling on me?
- What kind of experience and training do you have in negotiations?
- How many homes do you sell in a year?
- Will you personally be there when contracts are presented and handle all the negotiations?
- Do you have a web site?
- Will you directly market the property on the Internet?
- Do you follow-up on all showings on the house and report the comments back to me?
- Do you have an assistant to make sure no details are overlooked?
- What part of your business is from referrals/past clients?
- Do you market with direct mailings on my property?
It’s likely that you don’t interview people very often. And yet, in order to find the REALTOR® who is right for you, you may interview several. The quality of your home selling experience is dependent upon your skill at selecting the person best qualified.
It’s interesting that in the real estate business, someone with many successfully closed transactions usually COSTS THE SAME as someone who is inexperienced. Bringing that experience to bear on your transaction could mean a higher price at the negotiating table, selling in less time, and with the minimum amount of hassles.
The world is populated with REALTORS® who are wrong for you. For example, the housewife who sells an occasional house because she needs a little pocket change, or the insurance salesman who believes he can handle two careers, or perhaps your cousin, who really needs your business.
The sale of your home could well be the most important financial transaction you have ever been involved with. The person you select can make it a satisfying and profitable activity, or a terrible experience. It’s your home, and your money. The choice of your REALTOR® is up to you. Make the selection carefully.
MARKET TIME VS. SELLING PRICE
|0 – 4 Weeks||98.1%|
|4 – 12 Weeks||96.4%|
|13 – 24 Weeks||94.4%|
|24 – More Weeks||91.1%|
The longer your home is on the market, the less it will sell for.
Source: National Association of REALTORS®
7 ADVANTAGES OF LISTING WITH A REALTOR®
- Your time is valuable! Let me save you TIME!
- I’m likely to sell your home for MORE MONEY due to the greater exposure I offer (many sellers even NET more after our fee)!
- A 3rd party (REALTOR®) can obtain the prospect’s TURE OPINIONS of your home and relay those comments to you!
- You’ll know the buyer is a QUALIFIED one, not just a looker!
- You don’t need to personally open up your home to STRANGERS!
- You can SAVE YOUR MONEY by not haveing to advertise your own home!
- You can be professionally represented by someone that can be held ACCOUNTABLE for all the details!
There are over one million REALTORS® in business today. If you are searching for that one-in-a-million REALTOR®, look no further than your local CRS designated professional. Only about 3% of REALTORS® hold the CRS designation today. As a member, CRS designees are held to a higher standard of professionalism. A CRS professional is typically more experienced, knowledgeable and committed than the average REALTOR® at helping the consumer get the most out of their real estate transaction.
“In this fast-paced market place, home buyers and sellers need more than just a REALTOR®,” said Toni Sherman of CRS. “Home buyers and sellers need a professional with unique training and know-how to create opportunities, identify potential pitfalls up front, and make the transaction an unqualified success. Home buyers and sellers need a Certified Residential Specialist.”
Sherman lists the following reasons that home buyers and sellers should work with a CRS professional:
- Experience – Every designee must have a proven track record in the business, as well as advanced education in related areas like finance, technology and marketing.
- Ethics – Every CRS designee is required to maintain membership in the National Association of REALTORS® and to abide by its strict code of ethics.
- Technology Expertise – The training available to CRS designees includes a strong focus on technology and its applications in the real estate business.
- Ability to Maximize Profits & Minimize Costs – Every CRS is trained to help clients understand the local market, screen prospective buyers and sellers, negotiate in the best interest of the client, and ultimately ensure a successful home purchase or sale.