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Preparing to Sell Your Property Establishing The Value--Pricing A House Along with location and condition, the pricing of a house is a major component of the reasons why a house will--or will not--sell quickly. Although the pricing should not be dealt with lightly, some sellers have a tendency to put too much emphasis on the price and not enough on the condition, ending up with a house that is overpriced for its current condition and the overall market. Even if you find an unaware buyer that appears willing to pay the high price, when the buyer applies for a mortgage, the chances are good that the lender's appraisal will force the price back down to market value. It's important to get it right the first time
Some factors that affect the price
Methods of setting the price
An estimated valuation is placed specifically on your house by a professional appraiser. An appraisal will take into account location, condition and sale prices of comparable properties in the neighborhood. Selling a House on Your Own is called For Sale by Owner With the potential rewards that can be gained--saving $4000, $8,000, $12,000 or more (minus your expenses) by not having to pay a Brokerage commission, many people wonder why 20% of home sellers undertake the task of selling their houses on their own. Possibly it has something to do with expertise. Many home owners who consider a self sale of their house back off when they see the level of knowledge and commitment that is needed to do an effective job. If you decide, however, that self-selling is the best option for you, you will find the vast majority of the information on our Web Site to be of value. Most of what you will find here will be geared to either doing the job yourself. The most successful home sellers are those who take an active role in the process. If you feel that the best route is to sell your home yourself, then having as much information at hand is crucial..
Preparing Your House As has been mentioned elsewhere, the three most important factors in selling a house are location, condition, and price. Unless you have access to a reasonable house mover, there is little you can do about the location of your house. If it is priced correctly, the most crucial thing you can then accomplish is to make the preparation of your house for sale better than any of your competition. Even if you have been extremely conscientious in the maintenance of your home during the time that you have owned it, putting it on the market requires taking the next step, which is to check every aspect of your house, repairing, freshening, or changing whatever necessary. Preparing Your House--Exterior The first step in preparing the exterior of your house--a buyer's first introduction to it--is to take a clear-headed look at the house from the street. Stand at the curb and look at your house as a buyer might. What stands out and catches your eye? The beautiful landscaping and the new roof? Or does something else strike you? The faded exterior paint? The ruts in the driveway? The 2 missing shutters? Remember, this is how your home will "introduce" itself to a potential buyer. If the appeal isn't there, they will likely move on to the next available house, no matter how beautiful the interior of your house may be! If you need major improvements or renovations to your house, do them before you put it on the market. The average buyer simply does not have the "vision" necessary to see the job done (if you are planning to do the improvements prior to closing). If you are attempting to sell the house as a "fixer-upper" be aware that even though many buyers say that this is what they want, when confronted with the prospect of actually buying one, they often run for the hills! If you are in need of a contractor for improvements
or renovations, visit this list of contractors
You can find a reliable contractor at www.zerobrokerfees.com
If you get the buyer into the house, it is important to make their visit as pleasant as possible--and that means having the whole house ready. You want them to be as comfortable as possible, and to linger in the home. A "turn off" will send them scurrying quickly to the next house on their list! One Room At A Time
Preparing Your House--Interior Many home sellers make the mistake of ignoring certain repair or maintenance items in the hope that a potential buyer will either not notice, or if they do, telling them that they (the seller) will repair or replace the item. Most buyers do not have vision. They are not able to look at a room that needs paint and carpet and imagine it fresh and attractive. Telling them that something will be cleaned, or painted, or repaired may work with some, but the majority will not be able to envision the house after the changes have been made and will scratch your house from their list.
Time
To Show Your Home!
Your house has been checked, inspected, and cleaned from top to bottom. You have priced it at what you feel is a fair price. The marketing and advertising program is in full swing. Now it is time to put all of the preparation into action: showings! All of the work that you have done up to this point will only have an effect when a buyer walks into your house for the first time.
Home Improvements
An important part of the ownership of a home is the preparation for its eventual sale. A good example of this is maintaining records of any capital improvements that you make to the house, since the value of these add to the basis of your house. When your house has sold and all proceeds have been collected, your capital gains will be based on the difference between the sales prices (less any selling expenses) minus the adjusted basis. The IRS lists the following as increases to basis: 1) Improvements The IRS defines improvements as those items
that "add to the value of your home, prolong its useful
life, or adapt it to new uses. You add the cost of improvements
to the basis of your property." The chart below lists some other examples of improvements
Record keeping. You should keep records to prove your home's adjusted basis. Ordinarily, you must keep records for 3 years after the due date for filing your return for the tax year in which you sold your home. But if the basis of your old home affects the basis of your new one, such as when you sold your old home before May 7, 1997, and postponed tax on any gain, you should keep those records as long as they are needed for tax purposes. The records you should keep suggested by the IRS include: 1) Proof of the home's purchase price and purchase
expenses A Pre-Listing Whole House Inspection It is pretty safe to assume that a buyer who contracts to buy your house will want to have a professional whole house inspection conducted. Most sale contracts are written with a "contingent upon an acceptable whole house inspection" clause. So why not wait until you have a buyer who wants and will pay for an inspection? While many sellers do wait for just this situation, there are a few compelling reasons for you, the seller, to invest in a professional whole house inspection before listing your house. 1) If you were planning
to do any cosmetic repairs or remodeling before listing
your house, an inspection may reveal additional defects
that your cosmetic repairs could have masked. A pre-listing
inspection gives you the opportunity to fix possible underlying
problems right the first time. This saves you the time,
trouble, and money of fixing a seemingly small repair, then
finding out there is a larger problem, forcing you to destroy
your work, fix the underlying problem, and then do the cosmetic
repair all over again. What to look for in a professional inspector and inspection. NOTE: Doing a pre-listing whole house inspection does not guarantee that a buyer will not opt to have another done at the time of the contract. Nor does it guarantee that the second inspector will not find items that first did not discover (or think important enough to note). What it does guarantee, though, is evidence that you have spent the time (and the money) to make sure that the house is without defect. In addition, if you get into a contract squabble over repairs at contract time, you will have evidence backing up your position. Yard Sales Many home sellers have a "moving sale"--they hold a yard or garage sale after their home has been sold, right before they move. It is a much better idea to hold your sale before you even put your house on the market. If you have visited any of the other pages on this Site, you probably know how important it is to not have any clutter, excess furniture, or just plain junk anywhere in your house when it is on the market. A perfect opportunity to get this accomplished is to: Have a yard sale as soon as you decide to list your house to sell any excess items.
Offers All the decisions have been made. The house has been prepared like a model. Advertising and marketing has begun. The listing is in the MLS and the showings are in full swing. Now it is time for the reason that all the work has been done: an offer. An offer in Real Estate is a bit different than it is in many businesses. If a buyer asks a shopkeeper "could I buy this for $10?" and the shopkeeper accepts the offer, the buyer can still change their mind and walk away. Not so when you are dealing in Real Estate. When a buyer makes an offer, it is in the form of a legal contract. If you, as the seller, accept the offer, the house is sold. If you counter-offer, negotiations may continue. It is important to understand that all of the offer and counter-offer activity that you will engage in is framed legally. This is why it is so important that a seller never gets involved in oral offers and negotiation. If you have a house listed at $175,000 and the buyer asks "would you sell the house for $165,000?" almost any response you make--short of "put it in writing"--can cause problems. If you verbally accept the offer, not only does the buyer have no obligation to actually buy the house, many will say to themselves, "gee, that was easy....I wonder if $150,000 would work?" This is why an Agent will never deal in verbal offers. If you are selling on your own, it is very good advice! Some important points regarding offers 1) If you intend to accept an offer (or make a counter-offer), do it as soon as possible. At any time prior to your acceptance or counter-offer, a buyer can withdraw their offer. EXAMPLE: Seller Jones receives an offer from Buyer Brown. The acceptance date on the contract is the next day at 6:00 PM. Seller Jones knows that he is going to counter-offer at a price just a bit over Buyer Brown's offer. At noon the next day, Buyer Brown, in a cold sweat, withdraws the offer. Seller Jones is out of luck. 2) Any changes made on the contract require written approval of all parties for the contract to be enforceable. Even seemingly minor changes open the door for either the seller or buyer to change their mind. EXAMPLE: Seller Smith receives an offer on his house. He accepts all of the conditions of the offer (selling price, financing agreements, etc.) except for one. He changes the occupancy date from July 31st at 12:00 noon to July 31st at 6:00 PM, wanting to give himself a bit more time for moving. If the buyers agree (in writing), there is no problem and the contract is valid. If the buyers change their mind about buying the house, however, the contract is not enforceable. There has been a change (the occupancy time) that has been approved by only one party to the contract. What about low offers? No matter how well you have prepared your house and how certain you are that it is priced at fair market value, there is always the possibility of receiving a low offer. It could be simply a shot in the dark, or it could be due to a limit in the buyer's mortgage qualification ability. No matter what the case is, though, the most important thing to remember is do not take it personally. Many home negotiations, if they had just been allowed to run their course, very well may have come together acceptably for all concerned if the negotiations hadn't fallen into a "grudge match". Yes, it is your home, and yes, you have put a great deal of love and effort into it, but taking a low offer as a personal affront solves no purpose. Reject the offer or counter-offer it and move on. If you do get a low offer, it is far more important to try to get as much information as you can relative to the offer. Why was it at the price that it was? What was the motivation of the offer? (Be aware, though, that if the offer has come from a Buyer's Agent, the information you receive will only be as much as the Buyer's Agent wants you to know. They owe their loyalty to the buyer and cannot disclose any information that may put their client at a disadvantage.) There still may be information that will be revealed to you, which will help you as you structure a counter-offer.
Becoming familiar with the components of a contract before you have one presented to you puts you in a better position when it comes time to negotiate one. What are the Components of a Contract Although there will be some variance based on the location
of your residence, most Real Estate contracts contain most
or all of the following items:
The exact wording of the sales contract will vary from locality to locality (and sometimes even within localities), but by being prepared to see at least the items listed above, you will be in a better position when a contract is presented to you.
What is involved? It is the proverbial "signing on the dotted line:" the process of which will take the title to the house out of your name and put it into someone else's--your buyers. The keys to the house leave your hands for the last time and are delivered to the buyers. The weeks and months of anticipation are all settled in a very short amount of time at the closing. Closing procedures will vary from locality to locality. In some areas, the buyers and sellers (as well as their Real Estate Agents) will all attend the closing. In other areas, only the buyers will be present. The closing will take place at the office of an Attorney, a Title Company, or an Escrow Company (again, there is some variance here based on your local laws and tradition). In general, though, the closing will be attended by all of the buyers involved and their Real Estate Agent, as well as the Closing Agent. As a seller, you will in all probability have an attorney who will represent you, either physically at the closing or through a review of all the documents relating to the sale. At the very least, your attorney will prepare the deed and coordinate all paperwork with the buyer's attorney or closing agent.
From the time that the contract is ratified by all parties
and you have secured an attorney, it is a good idea to keep
in regular contact with your attorney--right up to the day
of closing. Make it a point to contact the attorney's office
on a regular basis to monitor progress toward closing. In
this way, you can often avoid problems that seem to often
arise on closing day or shortly before. |
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