Tips To Sell Your Home

The greatest asset you can own is your home. Unfortunately with today’s economic downturn, the increasing unemployment rate and the tightening of credit, many are facing foreclosure. As unpleasant as this situation is, there are ways to deal with it.

Your first option is to sell. Before making this decision there are several things to consider. First, you need to have some idea what your property is worth. One broad stroke is to review your estimated tax statement that is mailed to you each year. Markets will vary but as a general rule, the actual value is closer to twice the amount shown on this statement. You can also look online. Websites like zillow.com and others can provide some sales data in your area and estimate what your property would sell for in today’s market. Another and more accurate way to determine a property’s worth is to consult a real estate agent in your area. Most of them will do an assessment or market analysis report for free. Of course they do this hoping to list your home if you do decide to sell. Knowing this information will help you determine a selling price and negotiate as offers come in.

Once you’ve decided to sell, I recommend hiring an experienced agent that understands your community or suburb. The right agent will know your neighborhood, calculate the ideal price for your home to sell quickly and provide honest feedback on your property’s condition. However, before signing a listing contract with an agent, make sure you understand how he/she will market your property. Ask them for a marketing plan. Time is of the essence so having someone with a well thought out marketing plan will get it sold quicker. Once you’re satisfied with their plan, ask them for an estimated “net sheet”. This will break out all of the expenses related to the sale of your property so you’ll have an idea where you stand financially when the property sells.

You’ll also need to understand the listing contract. A good agent will walk you through all aspects of the contract and explain what each part means. If you don’t understand all of it, DO NOT SIGN IT. As with most contracts, there are many aspects to them and your understanding is essential. If you’re in doubt, ask someone else to read through it, including a real estate attorney. Most will charge a minimal fee for this, but it could save you money in the long run.

Another option is to sell it yourself. The general guidelines set up by realtors and other real estate experts can be managed by a motivated seller doing it on their own. However, your focus is to market the property in every way imaginable if you’re going to succeed.

Needless to say, the best time to take advantage of selling your property on your own, (known as the FSBO method) is during a “seller’s market”. During these conditions, there are not enough homes to supply all of the available buyers. You can pretty much write your own ticket when it comes to setting a fair market price for their home. You can also get the buyer to pay for inspections and appraisals on the property, and perhaps other expenses that might normally be your responsibility in a more balanced market. The money saved by not hiring a real estate agent goes directly into your pocket, along with any other perks conceded by the buyer.

Keep in mind that is a challenge to sell your home in any market. When you represent yourself, the challenge is a bit tougher. Sellers that use the FSBO option invariably start out optimistic, but they often lack the knowledge needed to sell their home effectively. The real estate business has a lot of rules. Laws are constantly changing with regard to closing procedures and property disclosures. Failing to abide by even one regulation can have a buyer breathing down your neck in a court of law. No one wants that.

A motivated seller can try to learn the ins and outs of the real estate business, but that takes time you’re facing foreclosure, chances are good that you do not have time to learn what is needed. If you choose to move down this path, keep in mind that the most crucial period of time for a newly-listed home is its first few weeks on the market.

Sellers who represent themselves are also more likely to commit common sellers’ mistakes, the most common of which is misjudging the value of their home. Market trends, location, and time of year all factor prominently into the final-sale-price equation. A home in a nice neighborhood, near good schools, and kept immaculately could sell for below-market value during the winter months in a buyer’s market.

Therefore, overpricing a home can be a slow death. The house will gain interest in the beginning, but buyers will see other similar properties that are selling for a lower price. Instead of pursuing an offer with the higher-priced seller, they’ll look for more moderate pricing.

There’s also a lot of extra responsibility involved in selling a home yourself. For example, you’ll need to set up escrow accounts. The escrow company that will represent the parties in the sale is charged with holding onto certain documents and funds until such time as conditions are satisfied for those items to be released. Additionally, you’ll be in charge of your own marketing strategy. Failure to market a home in the proper way will result in outright failure to sell your home or selling it for less than you expected.

Things to do

Even in the toughest market, there are things you can do to promote the effective sale of your home. It takes more effort and time, but these tips will help to put you on the road to your final goal, getting a fair price for your property in a reasonable amount of time.

It all begins and ends with the home. That “lived in’ look won’t do when it comes to showing your house to potential buyers. You’ll need to make some changes if you want anyone to be impressed with your cozy dwelling. And you’ve got to start somewhere, so get rid of the clutter. Take an honest look at those piles of papers, boxes of toys, and bags of unused clothing. Don’t just hide them in the closet. Most people, when examining a house for possible purchase, look to see how much closet space there is. Boxing everything up and storing it in the garage is not a good idea, either. Hold a yard sale to get rid of all that stuff or donate it to charity. Or, temporarily rent storage space to hold what you decide to keep so that it’s not around for visitors to accidentally find.

Once you’ve dealt with all the clutter, it’s time for spring cleaning of the entire place – from top to bottom. But, don’t neglect the yard. As potential buyers drive by or get out of their cars you don’t want them to see clumps of brown grass and dead flowers all over the place. The yard is an extension of your home. It needs as much time and attention as the inside of the house. After all, the vast majority of buyers want the total package, and they aren’t looking for a fixer-upper. Hire a comprehensive lawn service if the yard has been neglected for some time or has serious problems.

Making repairs to your property is also a part of getting it ’show-ready.’ Choose which repairs you will make. Major structural problems should be dealt with or they will become points of negotiation by the buyer in an effort to lower your selling price. Flaking paint and other cosmetic touches are inexpensive and will enhance the look and feel of your home.

Advertising options

Use the money that you saved on the agent’s commission fee to beef up your advertising. If people don’t know that your house is for sale, they won’t come to see it. Marketing is the biggest responsibility of the do-it-yourself home seller. Start with the obvious. Put up a noticeable sign in the yard. This lets people know that your home is on the market. It’s also a signal to potential buyers that you’re ready for visitors, so make sure that the house is ready to be seen before inviting potential buyers in.

Many home buyers today look to the Internet when searching for properties. The Internet provides a quick way to establish parameters that meet one’s particular specifications. In a few clicks, the buyer can see listings of the homes for sale within his or her price range and desired area. You as a seller can take advantage of this trend to get greater exposure for your property.
Online listings typically include much more information than the traditional newspaper ad, so make use of all of it. There’s also room for pictures to be uploaded. Take five to ten flattering shots of the exterior and any special features inside the home. If you have the money, hire a virtual tour company to create a 360-degree view of your home for the web listing.

You needn’t disregard the newspaper, however; it’s still a good place to advertise locally. Although circulation is down in favor of Internet-accessed news, many people will still usually buy the Sunday newspaper, especially for the coupons and ad sections. Include a color picture in your to enhance your description and set your ad apart from the others. And try not to use too many abbreviations in your text; people tend to think they’re reading shorthand and will give up if it gets too cryptic.

Showing your home

Without a realtor, this part of the process is also up to you. If you’re an outgoing sort, this is a chance to hobnob with potential buyers. If you’re not very outgoing, well, put on your best “Welcome to me home!” face. You can showcase your home by appointment only or as an open house. In the beginning you might consider an open house or two – works best when buyer interest is high.

One thing to be careful of, however, is talking too much about your home. Buyers will begin to think the home is ‘too good to be true’ if that’s all they hear you talk about. As you show the home, answer questions about the features if asked, but talk more about the amenities surrounding the neighborhood than the house specifically. Remember, location is a big, big selling point. Put out the sign advertising the showing at least half an hour before the start time. Advertise too early and you’ll get people knocking on your door before you’re ready. They’ll say they were in the neighborhood so they just decided to stop by.

Be sure to post a sign-in sheet near the front door. As guests arrive, have them sign their name and wait for the tour. A family member stationed at the table can ensure that each visitor complies. One downside you’ll have to deal with when showing your home is that there will be people who’ll show up just to see the house but aren’t really serious about buying. Unfortunately, nothing’s perfect. And as a precaution during your preparation, remove all valuable items from plain sight and out of the rooms that you’ll allow your visitors to see.

When the show is over and everyone’s gone, use the sign-in sheet to follow up with the attendees within 24 to 48 hours. Tell them that it’s a courtesy call to solicit feedback for the home or the show. To make it easier, have a list of questions typed out and fill in the answers on a separate sheet of paper for each person.

Negotiating the Purchase Contract

As a For Sale by Owner property, the seller must negotiate the contract with the buyer or their agent, if the buyer has representation. Buyers will submit offers to you for your consideration. Check with a local realty company to see if there is a special form on which to submit offers (some locales may by custom use a particular one). Expect that some buyers will try to lowball you, especially in a buyer’s market. Don’t just reject their offer outright, even if it is ridiculous. You can always submit a counter offer to the buyer. He or she could just be testing the waters to get the ball rolling and counter you again with a legitimate offer for the property. Again, consider all offers that you receive. Remember, this is the negotiation phase, where you really get down to business. For the offers that really interest you, ask the buyer to submit an earnest money deposit to show his or her intent.

Before negotiating with anyone, however, hire an inspector to look over the house and land. You’ll want to know if there are any major problem areas before entering into actual negotiations. Any known structural problems must by law be disclosed to the buyer, who might hire his or her own inspector to check out the home. In some areas, a pest control report may also be required. All repairs that are needed do not have to be completed before the home sells. Major damage should, of course, be attended to but small things can be disclosed and negotiated as a part of the purchase price.
Home warranty plans guarantee certain appliances and other structures in the home by covering their cost of repair or replacement. Most often included are the kitchen appliances, ducts, electrical wiring, and heating and air conditioning units. As the seller, you can purchase a one-year plan for the buyer that includes coverage for these and other items.

The important thing to remember is not to be intimidated during negotiations by the buyer or their agent. You might consider hiring your own agent that offers hourly rates for services for such as contact negotiation and closing. Since you’ve done all of the other work, this is a small price to pay for their expertise at such a crucial stage of the process.

If you need more help or suggestions, simply drop us a note.