The first step of any home selling journey should begin with finding and hiring a great realtor, as their advice and guidance will help you throughout the entire process. A listing agent represents you and has a fiduciary duty to look after your best interests. Initial discussions should set expectations and cover what’s ahead. At this stage you should thinking about where you’ll be moving next and plans made. Will you be renting our buying concurrently?
Much of the house preparation was done so that fantastic pictures can be taken! Don’t underestimate the power of good pictures, as they, along with price, will be one of your primary drivers of getting potential buyers to view your property in person. In this phase, pricing will be determined, pictures will be taken, the for sale sign installed, the property placed on the MLS, and other marketing efforts begin, including phone campaigns, internet, mailing, open houses, and more.
If the house looks good (in both pictures and showings), it’s been priced right, and the marketing is firing on all cylinders than we should expect offers. The goal is to get not just one offer, but multiple offers. With multiple offers sellers have leverage. Along with strategic negotiating tactics, buyers will often bid against one another causing the price to go up, up, up!
Opening escrow marks a turning point. This means you have a binding contract with a buyer and you are working towards executing the steps laid out within it. And once due diligence is complete and contingencies are removed the buyer is “locked in” and committed. Many things happen during this normally 30 day window including home inspections, termite inspection, appraisal, disclosures, buyer financing, potential repairs and walkthroughs.
Hopefully, everything went smooth during escrow, including the property appraising and the buyer securing their financing. Towards the end a few things will happen: after the home inspection a request for repairs will be issued, negotiated, and dealt with, the lender will fund the buyer’s loan, there will be a final walkthrough, title will be transferred, and escrow will be closed.
Usually, the close of escrow also marks the transfer of procession. This means the house is empty and keys are handed over to the new owners. Of course, locating and securing a new property would have happened much sooner than this. Usually, the discussions of future living arrangements happen early in the sales process with your Realtor. And your actual move-out normally happens within the 30 day escrow window.
A traditional sale, or equity sale, is simply a “normal” or “regular” sale. This occurs when the homeowner with equity and sells their home. They walk away with a profit after all mortgages, liens, and closing costs have been paid. There are no complications to the sale such with a probate or short sale.
How long it takes to sell a home can vary depending on a few factors. First, the more expensive a home is the longer it usually takes to sell, because there are fewer buyers, especially with multimillion dollar homes. Also, current market conditions will dictate some of the timing. Are we in a buyers market or sellers market? The time of year also plays a smaller role (there is a drop in activity around November-December). Lastly, is the seller motivated, is the home priced properly, and has it been marketed aggressively?
In a strong sellers market with homes priced around the median that are priced appropriately the market time can be short, a week or so. The escrow period typically lasts 30 days, but it could be 45 or even 60 days. If there are no complications or delays with escrow the optimistic timeline could be just 5 weeks from the start to finish. But considering all of the other variables and conditions it could also take weeks longer.
While many homeowners use websites like zillow, trulia, or redfin to view estimated home valuations, in a lot of cases they aren’t very accurate. The websites use algorithms that use recent area sales and price per square to estimate values. The algorithm does not know the condition of your home, nor does it know any special features, views, etc. They tend to skew values high.
The best way to determine the fair market value is to do it the old fashioned way, have a REALTOR® or appraiser look at it. With residential condos and homes the sales comparison analysis method is used over the cost and income approach.
First, the fair market value of the home needs to be determined. A REALTOR® or an appraiser can determine this. Once known, all mortgage balances, equity lines of credit, liens, and closing costs are subtracted. The remaining number is your equity!
The list price and the sales price are two different things. They can be the same number, but often are not. The list price is best viewed as a marketing tool. It the number that you advertise to the buying public. And it should be a tool to get buyers in the front door. The list price does not mean that is what you want to sell the house for. The list price is not the price of what the home is worth. And the list price is not the price your REALTOR® thinks it’s worth. When a buyer submits at offer at can be at your list price, below it, or above it. The seller is not obligated to accept ANY offer. With proper pricing strategy, marketing, and negotiating it is often possible to sell for a price well in access of your list price.
Depending upon the time this is written and the time you read this the market will have likely changed. Therefore, the best thing to do is talk to a REALTOR®.
There are several different parties involved in selling a home. Generally, there is a title company, escrow company, appraiser, terminate company, home inspector, mortgage officer, buyer’s agent, and listing agent. We refer to these expenses as closing costs. Some are paid by the buyer and some are paid by the seller. For the seller, we estimate the closing costs (minus commissions) at about 1% of the sales price. REALTOR® commissions are typically 6%, although all commissions are negotiable. From this 6% a portion is paid to the buyer’s agent (agent representing the buyer). The remaining portion is paid to the listing agent (representing the seller).
When one should sell their home is difficult to answer. Usually, changes in our lives dictate when we move. People get married, divorced, have babies, become empty nesters, relocate for jobs, relocate for family, win the lottery, etc. If the question relates to timing the market, that can be tricky, but a REALTOR® might have some insight. Also, timing within the year be a small factor.
There are different ways to handle showings. On one extreme a house could be viewed only with an accepted offer. And on the other end the house could be vacant and on lockbox, allowing REALTOR®s and buyers to view it anytime. Where you fall in that spectrum can depend on circumstances. Generally, the easier it is to view a property the better, but there are many considerations, like homeowners or tenants living in the home, pets, working schedules, etc.
One option is scheduled open houses. This allows all interested buyers to view the property at one time, and it minimizes the inconvenience of the occupants. If done property this may only have to be done once or twice before offers are received.
There are a few approaches a homeowner can take when selling. A home could be sold as-is, with absolutely nothing done, no repairs, no painting, no cleanup. On the other hand, one could remodel from A to Z. Obviously, the better the condition of the home and the better it shows to potential buyers the higher the price it will sell for. But how little or how much is done is a question best tackled by a REALTOR® once they have seen the property. Every situation is different.
Sure. Selling a home “as-is” is appealing to some sellers because it eliminates all hassle. No fixes. No repairs. No remodeling. If there are “issues” they can often be addresses with buyer credits. However, the better a home’s condition and the better it shows the more homes sell for. Talking to a REALTOR® is the best way to decide.
Determining how little or how much to do on a home before selling can be a tricky issue. Return on value varies depending on what is done. Time and money are also a factor. Discussing this with a REALTOR® is the best way to move forward.
A short sale occurs when the bank allows the sale of a home for less than the amount owed. Short sales do not apply to properties with equity.
All liens must be paid in order to clear title and sell a property. So, if there are liens, small or large, the parties behind the liens must be contacted for a payoff. Sometimes there can be negotiation in dealing with the balances of these liens. If there is not enough money to pay off all liens and/or no agreements are met then a home cannot be sold.
A listing agreement is a mutually binding contract. This means that both parties must agree to end the agreement. It is a fiduciary duty of a REALTOR® to serve their client and put their client’s interests above theirs. But sometimes relationships don’t work out. Professional agents should not want to work with a client who doesn’t want to work with them.