” It’s very important that first-time home sellers understand what the home sale process entails, what costs are associated with selling a home, and many other important aspects of the home selling process. ”
Many factors influence the value of your home. When it’s time to set a price, here are the main ones we look at:
A neighborhood’s desirability is one of the biggest factors to determine a property’s value.
Buyers compare your property against others in that neighborhood. Available inventory will determine the demand for your property.
The property condition will affect price and speed of sale. Optimizing its physical appearance and condition will help maximize your property value.
The number one reason a home doesn’t sell in real estate is because the property is incorrectly priced.
Keep in mind:
A property attracts the most attention, excitement and interest from the real estate community and potential buyers when it is first listed on the MLS.
What is a CMA ?
A comparative market analysis (CMA) is a detailed report that compares homes near you that have sold in recent months.
This is because a home is worth what a willing buyer will pay for it. Homes currently on the market are priced at what the seller hopes to get.
Sold homes, on the other hand, show us what buyers are actually willing to pay.
The goal is to find homes in your immediate area that are most similar to yours, analyze how quickly they sold and for how much.
This enables us to more accurately predict what other buyers will be willing to pay for your home.
What is Appraised Value?
An appraiser determines the estimated value of a property and is hired by the buyer’s lender to ensure that you haven’t offered the seller more than the home’s value and that the home complies with the minimal livability guidelines for loans.
One of the contingencies of the buyer’s offer is the appraisal. The lender will only loan you an amount of money up to the home’s current appraised value. This is why it’s so vital to price your home appropriately.
Note: Any repairs listed in the appraisal report as “required” ARE a condition of the sale.
From curb appeal to decluttering, make a commitment to focus on maximizing your home’s marketability.The number one reason a home doesn’t sell in real estate is because the property is incorrectly priced.
Have a pre-sale home inspection
A qualified and experienced home inspector will usually find something that should be corrected, upgraded, or repaired in every home that they inspect— even newly built homes!
Be pro-active and take care of these items; they will also show up on the buyer’s inspection, and if you wait until then you will lose valuable time. Remedying problems before the home is on the market also minimizes the likelihood that you will have a buyer back out of the deal because of the home inspection’s list of problems.
Tip: See “Top Home Inspection Findings” section.
Get replacement estimates
Do you have big-ticket items that will need to be replaced soon? These include items such as the roof, carpeting and appliances. Get estimates on how much it will cost to replace them, even if you don’t plan to do it yourself. The figures will be handy when negotiations begin.
Spruce up the curb appeal
Cut the grass, rake the leaves, lay fresh mulch, trim the bushes, edge the walkways, and clean the gutters. For added curb appeal, paint the front door, buy bold new house numbers and place a pot of bright flowers near the entryway.
Find your warranties
Gather up the warranties, guarantees, and user manuals for the furnace, washer and dryer, dishwasher, pool, automatic irrigation system and any other items that will remain with the house.
Don’t disregard minor repairs
Small problems such as sticky doors, clogged drains, torn screens, cracked caulking or a dripping faucet may seem trivial, but they’ll give buyers the impression that the house isn’t well-maintained.
Remove clutter and clean
Make a strong first impression and send a message to buyers that the home has been well-cared for. Pack up your least-used items, such as kitchen tools, out-of-season clothes, toys and exercise equipment, extra furniture and decor. Clean the windows, carpets, walls, lighting fixtures, and baseboards to make the house shine. Don’t forget to clean out the garage, too.
Click here to get “GETTING YOUR HOUSE READY – CHECKLIST“
Simple updates that will not break the bank!
- Re-grout and re-glaze the shower and tiles.
- Replace your kitchen cabinet fronts or have them painted if needed. You’ll spend a fraction of the cost of buying new ones.
- Apply a coat of fresh paint inside and outside.
- Shampoo your carpet.
- Replace outdated light and bathroom fixtures.
- Replace heavy curtains with sheer ones that let in more light.
- Replace outdated hardware on cabinetry and doors.
- Remove unnecessary items from the pantry, closets and all cupboards. Organize what’s left to make these areas appear roomier.
Top Home Inspection Findings
- Leaks in the plumbing underneath sinks and around toilets
- Broken/out of regulations water pressure valve
- Missing caulking around the tub and diverters and slow drains
- Two electrical circuits/feeds attached to a single breaker in the electrical breaker box
- Lack of GFCI outlets within 6 feet of a plumbing fixture
- Furnace not properly sealed in the bottom and duty filter
- AC condensation and refrigerant lines not properly sealed
Carbon monoxide and Smoke detector requirements
- CO2 detectors shall be centrally located outside of each separate sleeping area in the immediate vicinity of the bedrooms.
- Smoke alarms are required in each bedroom, on each floor, and in hallways outside of each cluster of bedrooms.
Roofing and attic
- Unsealed vents, lifted flashing
- Bathroom fans that are not venting to the exterior of the home, but rather into the attic or crawl space.
- Exposed wires
Water Heater Strapping requirements
- Dual plumbing “tape” straps (24 gauge minimum) or 1/2″ metal conduit straps completely around the body of the water heater are required, with one being placed on the upper third of the unit and the second along the bottom one-third of the unit. Also, the bottom strap must be 4″ above the control unit.
Each strap must be properly secured to the surrounding walls and from opposite directions and anchored to wall studs making use of lag bolts which are 1/4″ in diameter and 3″ in length.
Price it right: Set the listing price at a realistic price range.
Spread the word
At a minimum, your home should be listed on the MLS, Trulia, Zillow, Realtor.com, Facebook and YouTube. Our clients’ listings are also syndicated to over 100 real estate listing sites for maximum exposure.
Prepare for visitors
You only have one chance to make a great first impression.
Be flexible with showings
The more amenable you can be about letting people see your home, the sooner you’ll find a buyer. *
Use quality pictures and video
Eye-catching pictures are crutial to make your property stand out from your competition and attract a higher volume of potential buyers.
Work with the right real estate agent
Make sure your agent knows the market and is willing to go above and beyond to sell your home. A good agent doesn’t just think outside the box— he or she builds a new box! Aside from excellent marketing and placing your home in front of as many qualified buyers as possible, a good agent is also adept at solving problems and is responsive, returning phone calls, emails and texts promptly. (Hint: give us a shot!)
Once a buyer makes an offer you may need to consider a few compromises to seal the deal. You just never know when the next serious offer will come along – or what it will cost you to wait for it.
Keep in mind:
- Your priorities and respect the buyer’s. Don’t let small things get in the way of your better judgment. Focus on the final goal.
- Disclose all material facts. Smart sellers proactively go above and beyond legal necessity to disclose all known defects to their buyers. If the seller properly discloses all known problem(s) as required by law, the risk of non-disclosure lawsuits down the road is eliminated.
- Ask questions. Offers may contain complicated terminology. We are happy to help clarify the contract for you.
- Respond quickly. When buyers make an offer, they are in the mood to buy. Don’t delay if you want the sale.
- Meet halfway. If there are disagreements about relatively small expenses, split the difference. Don’t let your ego cost you a good deal.
Most negotiations proceed without much problem. In the event that there are difficulties, but you’re still committed to selling, remember: “where there’s a will there’s a way.”
The cost of selling your home will typically amount to 7 to 9 percent of its sale price.
In general these are some of the selling costs you may encounter at closing:
- Recording fees
- Commissions for listing and selling brokers
- Notary fees
- Escrow fees
- Title search and insurance fees
- Transfer fees
- Home warranty (if applicable)
- HOA docs (if applicable)
- Termite report and termite clearance (if applicable)
Other items you may see deducted in your Seller’s Estimated Net Proceeds worksheet at closing include:
- Mortgage payoff balance (if applicable)
- Loan payoff fee (if applicable)
- Lien releases (if applicable)
- Seller concession/credits (if applicable)
The majority of these expenses are deducted from the sale proceeds – if you don’t sell, you don’t pay*
Note: we will provide you a Seller’s Estimated Net Proceeds worksheet with the estimated amounts for these fees.
*With the exception of performed services such as termite work or repairs.
3. Home inspection(s): The buyer should complete the home inspection and any other desired investigations within 17 days of acceptance. Please accommodate the buyer’s and the inspector’s schedules.
2. Seller’s Disclosures: The seller must provide these to buyer within 7 days of accepting the offer.
4. Removal of all contingencies:* must be done within 21 days of acceptance — meaning that the buyer must have full loan approval by the lender, including the appraisal results, have the home inspection completed and have met all the conditions of any other contingencies.
*Contingencies: Time-frames in which the buyer may further investigate matters pertaining to the purchase, prior to being 100 percent obligated to move forward with the transaction. Some of the main buyer contingencies include:
- Appraisal: The home is appraised at purchase price.
- Loan: The buyer’s ability to obtain financing.
- Property condition: Buyer to be satisfied with property condition, inspections, permits, records, disclosures and any other buyer investigations.
- Sale of buyer’s property. (if applicable)
- Buyer’s acceptance of items in the HOA documents.
5. Signing docs: After the appraiser confirms that any required repairs are completed, the buyer’s lender can “clear for loan docs.” This means that the loan documents will be sent to the title company. At this point, and upon buyer’s removal of all contingencies, it’s imperative that you don’t procrastinate on getting the repairs done ASAP! (which is why we suggest you do them BEFORE putting the home on the market). Escrow will assign a notary to collect your signatures on final docs and deed.
6. Close of escrow: This occurs on the date the grant deed or other evidence of title is recorded at the County Recorder’s office. It is done according to the time-frames agreed to in the purchase agreement. Once the buyer’s lender reviews and approves signed loan documents, the transaction is cleared for funding. Once escrow has received the funds, the transaction is cleared to be recorded.
When we receive confirmation that we are on record, escrow is “closed” and YOUR PROPERTY IS OFFICIALLY SOLD!
Making the move
After all the effort it takes to sell your house, perhaps the most frantic period will be when it finally comes time to re-locate. Coordinating movers, packing and handling a change of address — it all requires a lot of attention-to-detail. Check out our moving guide for some tips HERE!
When you sell a house, you may owe taxes on your gain — the difference between what you paid for the house and what you sold it for, unless you qualify for an exemption as per the IRS.
Since 1997, up to $250,000 in profit ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:
- You have lived in the home as your principal residence for at least two out of the last five years.
- You have not sold or exchanged another home during the two years preceding the sale.
If you did not live in the property for at least 2 years of the last 5 you may want to consider a tax-deferred exchange for investment property sales, also known as 1031 Exchange, to defer capital gains taxes.
1031 Exchange: Named after the section of the tax code in which it is listed, the 1031 Exchange is a strategy and method allowed as per IRC Code 1031 for selling a property that’s qualified, and then proceeding with an acquisition of another property (also qualified) within a specific time frame. It isn’t as simple as it seems and there are dangers in the process, but it is the ideal solution for some. A 1031 Exchange requires professional assistance to be successful.
For more details go HERE!