The Selling Process
- Written marketing plan and a written price analysis of your home
- Exclusive Listing Agreement signed
- Complete Seller’s Net Sheet (this is a written estimate of the proceeds you will receive when your home sells)
- Seller’s Property Disclosure completed
- Yard sign installed
- Lock Box installed
- Electronic Homebook or flyers to house
- Copies of Property Disclosure to house
- Marketing begins
- Agent’s open house (presents your home to the real estate community - the people who will sell it)
- Public open house (if necessary)
- Buyers begin viewing property
- Present & review terms Purchase and Sale Agreement
- Complete new Seller’s Net Sheet
- Accept, reject, or counter offer
- Property goes "Under Contract"
- Inspection process started
- Review Inspection Amendment
- Negotiate inspection issues
- Buyer’s lender appraises property
- Review HUD-1 Settlement Statement Closing
- The Closing
- Make sure your home is in peak selling condition before it goes on the market. Your 1st potential buyers provide the easiest, fastest, & most profitable sales opportunities. The biggest mistake people make is putting their home on the market "as is" to see what happens. Most of the time nothing happens, except the buyers leave the house disappointed. The home stays on the market so long that the only way to increase interest is to lower the price more than the repairs would have cost in the first place.
- Make the improvements and changes before setting the listing price. Making the necessary improvements to your home prior to setting the price often results in your obtaining the highest possible sales price at the end of the day. It also guarantees that you will be in a position to capture those first purchase-ready buyers. Many times a seller will say, "I know the carpeting is old and completely worn out but I don’t want to go to the trouble of replacing it. I’ll be happy to give the buyers an allowance." Don’t forget that buyers "horriblize" most issues. The sale is in the details. Our experience has shown us that almost every home needs, at least, a little tweaking before it’s market ready. It may simply be a touch up here, or a knob there. The point is...look at your home through the scrutinizing eyes of the buyer that has many homes to choose from.
- If the buyers can’t see the space, they won’t buy the space. If the things in a house catch the eye and not the house itself, people don’t see the house. The more things the buyer has to look at, the more information the buyer must retain to be able to evaluate the space. If you give them too much to remember, they end up with questions. Questions create doubt, and doubt often results in a lost sale. Evaluate the potential clutter.
- Neutral colors and design will improve your chances for a fast and profitable sale by appealing to more prospective buyers. By neutral design, we mean not too much personality, not too much style, not too much color, not too much of any one ingredient. If there’s a little something for everyone, but not enough of any one thing to turn people off, you increase the potential pool of buyers and your chance of selling quickly. Houses are like ice cream. Some like rocky road, some like cinnamon, but almost everyone likes vanilla.
- Make certain your home holds no surprises for an unwary buyer. A loose step, the only light switch located all the way across a dark basement, a closet door that falls off the track when opened, a door knob that comes off in your hand, pipes that groan when the water is turned on...all can surprise and startle a prospective buyer. Surprised buyers are uncomfortable buyers, and uncomfortable buyers are unlikely buyers. Make sure there are no surprises. Eliminate reasons for buyers to make negative assumptions about your home. This is the Iceberg Factor. When buyers see an obvious problem, they tend to conclude that they are only seeing the tip of the iceberg and that there are underlying titanic issues. Most of the time you don’t get to explain or answer questions, and, if you do, it’s usually too late. The only recourse is to start over again with new buyers, a clean slate, and lots of antacid.
What do all of these keys have in common? If your home meets buyers’ expectations in terms of quality, condition, cleanliness & perceived value, your home will sell faster, easier, and for more money.
First and foremost don’t make the mistake of selecting your REALTOR® based on the highest suggested list price. This is the oldest scam in real estate: Tell the seller what they want to hear, act excited, and compliment the home to get the listing. Then ask for a price reduction in a few days—or even a few weeks. Don’t buy into that. Insist on a written, well-researched market analysis. Select your REALTOR® based on character, trust, credentials and track record, and then use market data to decide on price. With that said, let’s look at what this really means.
- Appraisal - When a mortgage is involved (as is the case in most real estate transactions) the expert opinion of a certified, state-licensed professional appraiser is ordered by the mortgage company. His task is to make sure the loan that the mortgage company is making is justified. We will not tell you what we think the home will appraise for. We will tell you what we think the home will sell for in today’s market. The market determines value and ,together, you and your REALTOR® determine an appropriate list price.
- The real value of your home is based on facts... A good REALTOR® will show you the facts regarding the price your home will sell for. The most revealing facts are as follows: a) Today’s competition determines today’s market value-all of the homes that are competing for the same buyer dollar that you are. No property is worth more than a buyer is willing to pay or more than its best competition. b) Buyers perceive the competitive market value of a property based on the intrinsic or utility value to them. They are shopping for the best value for the price they will pay and they have options. c) The price buyers have been willing to pay, and lenders have been willing to lend, for homes similar to yours. These are called comparable sales and are available to every REALTOR ® in our area.
- The problem with overpricing - If you decide to price your home outside the bounds of reality many problems ensue. a) Showings are minimized because the home will not show up in the relevant searches performed by REALTORS® or buyers. b) Your home will actually help sell the competition because it will make them look like they are a steal. c) Buyers won’t look at, or make offers on what, they perceive, as a hopeless situation. d) You will lose the excitement that a new listing generates. e) You will lose the most qualified buyers because, the odds are, they will never even know your home is on the market.
- You may be considering - We recognize there are many reasons you may already have a certain price in mind. You may be considering
- Your Original Purchase Price-Chances are you paid market value. However, markets change, and today we have to deal with the current market conditions. If you inherited the property and paid nothing for it, would you sell it for next to nothing? Of course not. You’d price it at fair market value and sell it for what the market will bear.
- Improvements-Many improvements are made for enjoyment, not resale. You cannot add an item to a home, select it to your style, use it, then expect a buyer to pay the original cost. Likewise, maintenance preserves the value, but does not create value. If you needed a new roof, it was needed as a maintenance requirement and cannot be added to the market price of your home.
- Your Need For Money-Your need for money or the fact that you are moving to a more expensive area where you will have to pay more for a home has nothing to do with the home’s current market value.
- The Cost to Rebuild Your Home-Construction costs do not take into account market value either.
- Your Personal Attachment to the Property-The factors above may influence the price in your mind; but as you can see, they really have nothing to do with what your home is actually worth in today’s market. Over the years, we have often heard these comments from sellers:
- "Another agent said it was worth more."
- "People always offer less than the asking price." "The buyers can always make an offer."
- "My neighbor was able to get his price."
- "My house is better than these other homes."
- "We paid more than that for our home."
- "We just painted and added new carpet."
- "I need this much money for our next house."
- MYTH #1
- "Discount" or "Limited Service" brokers can do an adequate job selling real estate.
- Promotional costs such as photographs; brochures; newspaper, magazine, and TV ads; MLS insertion fees; printing; direct mail; personally distributed newsletters; professional support staff; enhanced web maintenance and fees; electronic marketing; signs; and more are paid for by a full-service, full-fee agent.
- Ask yourself
- Will the discount broker offer a complete marketing campaign?
- Does the discount broker have a staff to personally attend to your specific needs?
- Does he/she have a proven track record of success, or is he/she using the discounted commission to win our business?
- Does he/she have the expertise to guide you through problems that will develop during the closing process?
- Will the discount broker be motivated during difficult times to go the extra mile for you, or will they move on to another deal that doesn’t take so much of their time?
- Your home is an asset to a discount broker and makes their phone ring. If your home sells, they lose business. Why would they want to sell your home for a discounted fee when they can make more selling other properties?
- You only pay a brokerage fee if and when your property sells successfully. The supply of buyers through your home will be very restricted if marketing is limited.
- MYTH #2
- You should select the REALTOR® who says they can get you the highest price.
- This is the oldest scam in real estate: Tell the seller what they want to hear, act excited, and compliment the home to get the listing. Then ask for a price reduction in a few days—or even a few weeks. Don’t buy into that. Insist on a written, well-researched market analysis. Select your REALTOR ® based on character, trust, credentials and track record, and then use market data to decide on price.
If you're thinking of selling your home, and you expect that the total amount you owe on your mortgage will be greater than the selling price of your home, you may be facing a short sale. A short sale is one where the net proceeds from the sale won't cover your total mortgage obligation and closing costs, and you don't have other sources of money to cover the deficiency. A short sale is different from a foreclosure, which is when your lender takes title of your home through a legal process and then sells it.
Consider loan modification first
If you are thinking of selling your home because of financial difficulties and you anticipate a short sale, first contact your lender to see if it has any programs to help you stay in your home. Your lender may agree to a modification such as: Refinancing your loan at a lower interest rate;, providing a different payment plan to help you get caught up, or providing a forbearance period if your situation is temporary. When a loan modification still isn’t enough to relieve your financial problems, a short sale could be your best option if: 1) Your property is worth less than the total mortgage you owe on it, 2) You have a financial hardship, such as a job loss or major medical bills, or 3) You have contacted your lender and it is willing to entertain a short sale.
Hire a qualified team
The first step to a short sale is to hire a qualified real estate professional and a real estate attorney who specialize in short sales. Look for prior short-sale experience. Short sales have proliferated only in the last few years, so it may be hard to find practitioners who have closed a lot of them. You want to work with those who demonstrate a thorough working knowledge of the short-sale process and who won't try to take advantage of your situation or pressure you to do something that isn't in your best interest. A qualified real estate professional can: 1) Provide you with a comparative market analysis (CMA), 2) Help you set an appropriate listing price for your home, market the home properly, and get it sold, 3) Put special language in the MLS that indicates your home is a short sale and that lender approval is needed, 4) Ease the process of working with your lender, 5) Negotiate the contract with the buyers, & 6) Help you put together the short-sale package to send to your lender (or lenders, if you have more than one mortgage) for approval. You can’t sell your home without your lender and any other lien holders agreeing to the sale and releasing the lien(s) so that the buyers can obtain clear title.
Begin gathering documentation before any offers come in
Your lender will give you a list of documents it requires to consider a short sale. The short-sale "package" that accompanies any offer typically must include: 1) A hardship letter detailing your financial situation and why you need the short sale, 2) A copy of the purchase contract and listing agreement, 3) Proof of your income and assets, & 4) Copies of your federal income tax returns for the past two years.
Prepare buyers for a lengthy waiting period
Even if you're well organized and have all the documents in place, be prepared for a long process. Waiting for your lender’s review of the short-sale package can take several weeks to months. Some experts say if you have only one mortgage, the review can take about two months. With a 1st and 2nd mortgage, the review can take about three months. When the bank does respond, it can approve the short sale, make a counteroffer, or deny the short sale. The last two actions can lengthen the process or put you back at square one. (Your real estate attorney and real estate professional, with your authorization, can work with your lender’s loss mitigation department on your behalf to prepare the proper documentation and speed the process along.)
Don't expect a short sale to solve your financial problems
Even if your lender does approve the short sale, it may not be the end of all your financial woes. Here are some things to keep in mind: 1) You may be asked by your lender to sign a promissory note agreeing to pay back the amount of your loan not paid off by the short sale (your Realtor ® can craft the purchase contract to, potentially, mitigate this). If your financial hardship is permanent and you can’t pay back the balance, talk with your real estate attorney about your options. 2) Any amount of your mortgage that is forgiven by your lender is typically considered income, and you may have to pay taxes on that amount. Under a temporary measure passed in 2007, the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act, homeowners can exclude debt forgiveness on their federal tax returns from income for loans discharged in calendar years 2007 through 2012. Be sure to consult your real estate attorney and your accountant to see whether you qualify. 3) Having a portion of your debt forgiven may have an adverse effect on your credit score. However, a short sale will impact your credit score less than foreclosure and bankruptcy.
One month before your move
- Arrange for moving your furniture and personal belongings either by hiring a moving company or renting a truck.
- Get estimates from several moving companies or truck-rental companies and be sure to obtain a hand truck (appliance dolly) if you’re moving yourself.
- Gather moving supplies: boxes, tape, rope, and anything else you might need.
- Plan your travel itinerary and make transportation and lodging reservations in advance if you are driving to your new home. (Leave a copy with a friend or relative.)
- Some moving expenses are tax deductible, so you will want to save your moving-expense receipts (if the move is employment-related) for tax deductions, including meals, lodging, and gasoline. Record expenses incurred during your house-hunting trips.
- Develop a plan for packing, such as packing last the things you use the most.
- Notify others of your new address: post office, charge accounts, subscriptions, relatives and friends, national and alumni organizations, church, mail order clubs (books, videos, catalogues), firms with which you have time payments, and your past employer to make sure that you receive W-2 forms and retirement-account information. Save your old address labels to speed up filling out change-of-address forms for your new address.
- Notify federal and state taxing authorities or any governmental agency necessary.
Two weeks before your move
- Notify and get refunds from your present utilities: gas, electric, water, cable, and phone. Arrange for services at your new address. Notify long-distance phone company and arrange for service at your new address.
- Have your car serviced if you are driving a long distance to your new home.
- Recruit people to help you on moving day.
- Arrange for someone to take care of your pets and children during the move.
- Confirm moving company or rental-truck arrangements. Call to reserve our FREE moving truck, if you haven’t already done so.
One day before your move
- Keep moving materials separate so they don’t get packed until you are finished.
- Pick up rental truck if you are moving yourself.
- Fill up your car with gas and check oil and tires.
- Decide what to move and what not to move. Possibly have a garage sale (extra cash and less to move).
- Transfer your bank accounts. Your new bank will be happy to open your account by mail.
- Contact your local credit bureau to find out if they are on the same system that your new home town subscribes to; if not, they will be able to transfer your credit file.
- Request records from doctors and dentists, including eye-glass prescriptions, dental x-rays, and vaccinations.
- Obtain your children’s school records to make for an easier transfer.
- Draw up a floor plan of where your furniture should be placed. This will help avoid confusion for you and your movers.
- Pay existing bills and close out local charge accounts.
- Arrange any special movers, such as may be necessary for an expensive piano or to break down and move a pool table or above-ground swimming pool.
- Cancel or transfer deliveries, newspaper, garbage collection, etc. Coordinate the transfer of gas, electric (water and sewer when not handled by title company) with the next occupant of your old home as well as with the previous owner of your new home, so as to avoid lapses in service and extra re-start expenses.
- Check on personal items that might be at the photo shop, in a safe deposit box, at a neighbor’s house, on lay-away, or in a repair shop (e.g., shoe repair, jewelry store, small-appliance repair, or dressmaker).
- Make arrangements for transporting your plants and pets.
- Save the phone book from your former city residence for tying up loose ends or for future correspondence.
- Transfer insurance policies or arrange for new policies.
- Gather all valuables, jewelry, important papers (birth certificates, deeds, documents) to take with you personally.
- Pack an arrival kit of necessities just in case you arrive before the mover, if applicable.
- Purchase moving insurance. Your mover’s liability for lost or damaged goods will not equal their replacement cost. Have valuable items appraised.
- Check with your attorney about your will, if crossing state lines.
- Ask for professional referrals if available (e.g., doctor, accountant, etc.)
If you think moving is hard on grown-ups, imagine what it’s like for kids. They’re starting over and trying to meet new friends while getting used to a new home, neighborhood, and school. Think about your children’s specific needs before, during, and after the change and you’ll make a big difference in how your children feel about the move and how they adjust afterwards.
BEFORE THE MOVE: PREPARING
- Give your children a chance to talk about their feelings and let them know how you are feeling too.
- Help them make a list of phone numbers and addresses of friends, relatives, and other important people.
- Knowing they can stay in touch with these people will be reassuring.
- Visit your new home and line up some activities for your child to be part of after the move; a sports team, music lessons, or a scouting troop.
DURING THE MOVE: REMEMBERING WHAT’S IMPORTANT
- Stay as upbeat and calm as you can. Your own mood will impact your children’s moods.
- Involve your children in the packing. Older children can put their own belongings in boxes, and children of all ages will enjoy decorating the boxes containing their things.
- Stick to your routines. Have meals at the same times you normally do.
- Don’t pack things that your children treasure. Take special blankets, favorite books, and other prized items in the car or on the plane with you.
- Help your children say goodbye to the important people in their lives. For their friends, a party is a fun way to celebrate the friendship.
- For many families, moving day means a long car trip or a cross-country flight. Prevent backseat blues and airline angst by adding travel fun and games to your plans.
- Allow your child to bring an album with pictures of their old home and friends. This will allow them to express their feelings and give you a chance to reassure them that it is natural to feel loss and initial discomfort with such a big change.
AFTER THE MOVE: GETTING SETTLED
- To make your new home seem more like home, hang your child’s or family portrait in a prominent location or create a tabletop display of family photographs.
- Take pictures of the new home, neighborhood playmates, family members, and school. Start a new family album to show there is fun and family togetherness available at the new home.
- Don’t spend too much time unpacking—at least not right away! In the first few days, take time to enjoy your new home with your family. Take walks and check out local restaurants.
Above all, listen. Be there when your children get home after the first day at their new schools, even if it means having to leave work early. Ask often how things are going, and take time to listen.
Cats and Dogs
Cats and dogs can either be shipped by air or taken along in the car. If you are flying to your new destination, your cat or dog can ride in the baggage compartment. Your pet will need a health certificate from your vet. Call the airline in advance to find out about special boxes they may have. If you are going to make a container for your pet, make sure that the container complies with airline regulations. It is a good idea to put a piece of clothing with your scent in the animal’s box so he/she feels more at home.
If you aren’t flying with your pet but are having it shipped by air, make sure that someone is on the other end to pick your pet up at the airport and take care of him/her until you arrive. The easiest way to care for your pet before your arrival is a kennel. Many kennels can take your pet several days before your move (keeping him/her safe and out of your way). Or you can take your pet to the airport and arrange to have a kennel on the other end pick him/her up and take care of him/her until you arrive.
Think twice about taking your dog or cat with you on a long cross-country trip. Not only can animals get car sick, but being cooped up in a car all day can make them nervous and upset. They must be fed and have plenty to drink (make sure that you take along a water dish), they have to make "rest stops," and they have to be on a leash to keep them from running off anytime the car door is opened.
Some motels and hotels don’t allow pets. Others have special facilities for handling travelers’ pets. Call in advance and check out the available literature on hotels along your route. National chains usually publish such information.
Hamsters, birds, mice, and such can be transported in the family car fairly easily. Make sure that the animals have enough food and water in their cages and are out of drafts or extreme temperatures. Cover cages with a cloth to keep the pets quiet and restful.
It is not practical to move fish in their aquarium. A gallon of water weighs eight pounds. Plan on giving the fish away and restock the aquarium when you arrive at your new home.
Your veterinarian and pet stores are also valuable sources of information.
You can take your plants with you when you move without harming them. Here are some tips:
- Call your local U.S. Department of Agriculture to check on regulations if moving from one state to another. Many states have restrictions on certain kinds of plants to prevent importing bugs or pests that can destroy valuable cash crops in the state.
- A couple of weeks before you move, prune plants to facilitate packing. Consult a florist or a plant book for instructions.
- A week before you move, put your plants in a black plastic bag. Prior to placing your plant in the bag, place a bug/pest strip, conventional flea collar, or bug powder in the bag. Close the bag and place it in a cool area overnight. This will kill any pests on the plant or in the soil.
- The day before you move, put your plants in cardboard containers. Make sure that they are held in place by dampened newspaper or packing paper. Use paper to cushion the leaves and place a final layer of wet paper on top to keep them moist. Water the plants normally in summer, a little less in winter.
- On the day of your move, set the boxes aside and mark "DO NOT LOAD" so they won’t be taken on the moving van.
- On the day you leave, close boxes, punch air holes in the top, and load them in your car.
- When on the road, be careful where you park your car. Look for a shaded area in the summer and a sunny spot in the winter.
- Unpack the plants as soon as you can after arriving. Remove plants through the bottom of the box in order to avoid breaking their stems. Do not expose the plants to much sunlight at first. Let them get accustomed to more light gradually.
- If you must leave your plants behind, take cuttings. Put them in plastic bags with wet paper towels around them.