Understanding the Home Selling Process
The Home Selling process evolved during the years and has become more complex than it used to be. Gone are the days of its simplicity when in-part using one long form with four or five copies attached and the agent would need to say “ Press Hard Please“ in order for each copy to duplicate your signature. Today there are a maze of including but not limited to forms, marketing, financing, pricing, inspections and negotiating to take into account. It is important that your agent keeps you informed, up to date and will adjust where needed through out the entire process to insure a successful sale.
Step 1: Choose a Selling Agent:
- A Selling agent should provide you with
- a comprehensive marketing plan that explains on how they will market your home.
- a comparative market analysis ( CMA or comp ) that will identify a price range for the sale of your house.
- When choosing an Agent there are a couple of factors to keep in mind :
- Their Education and Experience,
- Ability in Communicating regularly with you their client,
- Commitment during the course of the sale and to guide you to make the right decisions.
- Agent gives advice about the following:
- Preparing your home for sale: De-clutter and move out large and excess furniture.
- Repairs needed before selling: First address any maintenance issues. Note that not all resale repairs or modifications will pay off.
- Staging: You will get more for your home if it is stage properly. You can hire a professional, or you may be lucky and have an agent that has, to some degree, a gift for design and can assist you or just do it yourself.
- Pricing your Home:DO NOT select an agent who will overbid each other just to get the listing or is making a non supporting suggested sale price. Homes that are overpriced will stay on the market longer and will often sell for less than the market price. Also consider that the longer a property is on the market, additional cost of such expenses such as property tax, insurance and heating, maintenance and any other expense will chip away at your bottom line. So price right with a good CMA or appraisal if needed and get the best $ dollar for your property.
- Shows Your Profits from your Sale: An agent should prepare two Seller Estimated Cost sheets for your sale. The sheets will indicate the expected range of profit from the sale of your property.
Know the difference between a general Real Estate Agent ( licensed agent ) and Realtor ( licensed agent )
Quoted: From the Association of Realtors
Not every real estate agent or broker is a Realtor. That term and the familiar block “R” logo are trademarked by the National Association of Realtors can legally be used only by those that are Realtor members through their local association of Realtors.
While all Realtors are also state-issued licensees as agents or brokers, a major difference between a real estate ( agent ) licensee and a Realtor is that Realtors have taken an oath to subscribe to a stringent, enforceable Code of Ethics with Standards of Practice that promote the fair, ethical and honest treatment of all parties in a transaction.
In addition, Realtor associations offer a wealth of training courses to their member Realtors, to help assure that Realtors serve their customers with the level of skill and knowledge that is required in today’s real estate transaction
Step 2: Identify How Much Your Home Is Worth
- There are many factors that will affect the listing price of a home. Some of these factors but not limited to thelocation, supply and demand, condition, amenities, interest rates and local and global market conditions. A Huge mistake is to overprice a home.
- A good agent will have provided you with a through comparative market analysis ( CMA ) of your home so as to enable you to come up with a realistic and competitive price strategy. Avoid the pitfall of overpricing as noted in Step 1 ( 4 ) above. As the old saying goes, “Time Is Money”
Step 3: Listing: ( note that other documents may need to apply )
- “Listing Contract (also called Listing Agreement)- A real estate broker (or agent, acting on behalf of the broker) and a seller sign this agreement in order to give the broker the rights to advertise the property and represent the seller. The seller’s real estate is then listed for sale, most often in a multiple listing service. In most cases the payment of a commission to the brokerage is contingent upon the agent procuring a satisfactory buyer for the property within the time frame of the Listing Contract. The commission is then paid to the broker from the seller’s proceeds at closing. Flat fee listing contracts have become popular, whereby a seller may pay a specified amount upfront for the services received. All details are typically determined by the listing contract.”“Listing/ Listing Agreement – A written agreement between a property owner and a broker authorizing the broker to advertise the property and find a buyer or a tenant for a specific property. ( See Listing Contract)”
- Sellers Property Disclosure Statement – A seller must, by law disclose to a buyer all known material defects about the property being sold that are and are not are not readily observable. Many Sellers make one simple decision that can cost them thousands of dollars when selling their home. Don’t make this simple mistake.
Step 4: Getting Ready for the Sale:
Many decisions are made on Emotions and believe it or not but buying a house is no different. When a prospective buyer first sees a possible purchase their first emotion will effect their decision. You don’t get a second chance to make a first impression. Here are some Tips that can impress good Emotions and help sell a house and may even sell for more money.
- Curb Appeal:
Landscape: replace spindly bushes with new ones, put down fresh sod and add some color with potted flowers or flower beds.
Exterior and entryway: If the entryway door looks tired paint the door or buy a new one. If you have a wood deck paint it with a fresh coat of paint. If your house number and/or mailbox is old and tired looking buy and install new ones. Replace light sconces with new ones but make sure they will fit the style of the house and are not the cheap five dollar one. No need to be cheap here but not to be extravagant either.
Make all needed repairs before selling: It would not be a good impression if a door knob was not working or worse if it came off in the prospective buyers hand. 🙁 First address any maintenance issues. Note that not all resale repairs or modifications will pay off. Michaelangelo can save you thousands of dollars by knowing what areas TO spend your money on and WHAT areas not to spend a penny.
- Clean & Stage
Unclutter then neatly organize what’s left. This is a good time to start the packing process by going room by room including the closets and any cabinets and pack the clutter. Of course label each box by room and general item. Take about half the stuff out of each closet and then neatly organize what remains. Storage space is important with buyers and a clean, tidy, neat and spacious looking closet is a great impression.
Another common characteristic in a buyers search is good light within a home. Take down the drapes leave the blinds and clean the windows and let the light in. During a showing the blinds should be up half way or all the way and open. Maximize the light coming into your home. Increase the wattage if you have 40 watt bulbs but make sure not to go over the maximum wattage allowed. Make your house bright and cheery!
De-personalize: The more personal stuff you have on the walls, counters and furniture the less potential buyers imagine themselves living in the home. These personal items such as family photos, memorabilia collections and personal keepsakes are the other things to start packing.
Few agents are talented with good design abilities and may lead you in the right direction otherwise consider hiring a home stager. This will allow you to showcase and maximize the use of the space to its greatest potential.
Get your house ready for showings that will create excitement in prospective Buyers is key for a good showing. Good emotions from the prospective Buyer will put your house on top of the list. The above procedures will help you accomplish excellent showings. Your home also needs to be in tip-top shape and “show-ready” at anytime. No dishes in the sink, dishwasher cleaned out, bathrooms sparkling and rooms neat and tidy.
It is not only how a property presents itself but ALSO how it is presented. Michaelangelo knows the art of presenting useful information to the buyers.
Most buyers will make appointments. Initially you can instruct your agent to arrange a comfortable lead time before the showing in order for you or your agent to set up. Some sellers feel that it is important for them to be home during a showing. This is a BAD practice. Buyers will feel more comfortable when the Seller is not there.
Step 5: Marketing Your Home
Marketing is the first step in attracting potential buyers to review your house. At this point in time your house should be ready for the Sale. First Buyers need to know that you are out there on the market and second to ATTRACT them and take an INTEREST in your property. The better the marketing the more prospective buyers will see your house. That does not mean to saturate the market with any and every type of marketing materials but rather the QUALITY and EFFECTIVENESS of the marketing is the KEY.
A pool of buyers are in the market at any given time and the idea is to TARGET and ATTRACT the vast majority of those potential buyers to your property.
When it comes to marketing, Michaelangelo grow up in a business environment learning the skills of marketing from a business that was doing 10 times the national average. Applying those skills to the real estate market has proven to be successful to anyone selling a home. To learn more about how Michaelangelo can provide you with a customized marketing program for you house contact the Michaelangelo Real Estate Group at 215-470-1983.
Step 6: Showing Your Home
As previously noted in the above paragraph ” Step 4 ” : It is not only how a property presents itself but ALSO how it is presented. Michaelangelo knows the art of presenting useful information to the buyers. Also important that your home needs to be in tip-top shape and “show-ready” at anytime. No dishes in the sink, dishwasher cleaned out, bathrooms sparkling and rooms neat and tidy.
Most buyers will make appointments. Initially you can instruct your agent to arrange a comfortable lead time before the showing in order for you or your agent to set up. A good agent will know how to have the home set-up before the showing. Essentially this is accomplished by setting moods in the house with lighting, sunlight and sometime sents whereby creating a positive emotion.
Some sellers feel that it is important for them to be home during a showing. This is a BAD practice. Buyers will feel more comfortable when the Seller is not there.
Step 7: Seller Disclosure
Your Sellers Disclosure Statement should be available for a prospective Buyers review. If a Buyer, to some degree becomes interested in your property he/she will ask to review this disclosure to better understand the condition of the property. This is an important document and if not completed correctly can cost you hundreds or thousands of dollars.
Step 8: Agreement-of-Sale to Settlement
- Offers & Negotiating
When the initial offer is made by the Buyer to the Seller a lot depends on what the counter offer should be. Current market conditions are taken into account and plays a major role in a negotiation strategy. Markets will vary from community to community and an your agent should know it well and be able to inform you of those conditions. Such markets conditions as a Sellers market, Buyers market, Balanced market or if conditions that create a bidding war. Another major factor when negotiating is NEVER, NEVER, NEVER and I mean NEVER get Emotional. A counter offer may be presented to you that may be taken in offensive but keep your cool and keep you eye on the bottom line. Emotions tend to cloud a persons judgment and many deals have fell apart based on emotions. A good agent will keep you on track and the negotiations moving forward to a good deal. Areas to take into consideration when negotiating are listed below.
- Price, Closing Cost, Closing Date, Financing, Home Warranty, Lease Back, Home Repairs, Appraisal, Personal Property, Inspections, Buyers with lenders pre-qualified, or pre-approval letter or loan commitment, Buyers Financial Information.
It is important to note that an offer is not binding until it is delivered and accepted by the other party. Proposing any deviation from the terms of the offer or counter offer constitutes a rejection of the original offer and becomes a new offer or counter offer. An offer or can revoke the offer at any time before acceptance. When an offer or counter offer is delivered and accepted an Agreement of Sale has been made.
- Escrow & Title
At the time of an Agreement of Sale between the Seller and a Buyer the agreement may require consideration. The consideration of the initial and additional deposits held in the closing agent’s escrow account pending a completed fulfillment of the agreement including any contingencies.
What is Escrow: When the closing agent hold funds, securities, documents for the seller and buyer during real estate transaction. At settlement the closing agent delivers the funds and documents held to the appropriate parties.
Title: Title to real estate means the right to or ownership. It is just a way of referring to ownership: it is not an actual printed document. ( A deed is a written instrument used to transfer title to real estate. )
Title Insurance: Issued by the Title company to protect the property owner against loss from the discovery of any defect to the title. ( cloud on title )
Title Search: A review of all public documents in reference to a property to determine the present status of the title. Depending on the complexity, a title search could take days or weeks to complete.
Closing Agent: Either an attorney or title company will act as the Closing Agent. They will, among other duties, research the complete recorded history of the property to insure clear title. It is the Buyer who will generally select a Closing Agent.
The Closing Process:
When the lenderhas received all required documents from the buyer and the loan has been approved, the closing agent will schedule the date and time for the closing with all parties. The lender will prepare a closing package consisting of the loan closing instructions, fees charged in connection with the new loan, and any loan documents to be delivered to the closing agent. The closing agent will then prepare all of the necessary closing documents, including a closing statement outlining all costs associated with the transfer of ownership as well as fees charged in connection with the new loan.
A title exam is ordered to verify the seller’s right to transfer ownership, and to discover any outstanding mortgages, liens, restrictions, easements, etc., which may affect the property. A title commitment will then be issued to show any matters reflected in the title exam, as well as a determination of the documents needed to properly transfer the title of the property to the buyer. The closing agent will also work closely with the lender and Realtors to coordinate the ordering of the termite inspection, survey, homeowner’s insurance and flood insurance, if applicable.
The closing agent will begin preparation for your closing shortly after you sign your contract. A request for payoff information is sent for existing mortgages, as well as a request for any information regarding homeowners or condominium association dues and/or transfer fees. If a new mortgage is being obtained, the closing agent will work closely with the new lender to make sure that all of the lender’s closing requirements are met.
Copies of the closing statement are usually faxed to the lender and Realtors, if any. If the closing agent has been provided a fax number for buyer and/or seller, they may also receive a copy. The buyer must bring a cashier’s check made payable as instructed by closing agent. The seller will also be advised of the proceeds of the sale of the property.
The closing typically takes place in the closing agent’s office. The closing agent, buyer, seller and any Realtors sit around a table together while the closing agent explains the closing statement as well as other closing documents. When all of the documents have been signed, including the deed, and the buyer has given the cashier’s check to the closing agent, the seller receives his or her proceeds from the sale
After the closing, the closing agent sends the original deed and mortgage to the courthouse for recording. The completed loan package is sent to the lender. All remaining funds are disbursed according to the settlement statement, including mortgage payoffs. The owner’s and lender’s title policies are issued when the deed and mortgage are returned to the closing agent after recording.
Title Resource Group (TRG)
Within the Agreement of Sale the Buyer will have elected or waived what inspections they will be preforming. The buyers may inspect the property by a one or more licensed inspectors within the timeframe(s) noted in the Agreement of Sale. Separate inspections may be required for specialized areas such as septic, structure, or HAVC.
- Negotiate Repair Request
No home, in particular a resale home is perfect therefore some of those inspection items will most likely be noted by the inspector. Minor issues most likely are very workable however major defects that may cause a buyer to walk away from a sale or at the least request for those items to be repaired.
Repair, Renegotiate the Sale Price, Closing Credit, Terminate the Sale ?
The questions then remains, when to repair and when to push for a closing cost credit or price reduction. Why pushing for a credit or price reduction maybe the right choice depends on several factors and when and how does the issue reflect the price of the house. How to appear reasonable and acting in good faith to help in negotiations. How your home sale process can be set up to better help you if or when the time comes to negotiate the repairs. Contact us to further explain the answers to these and other questions and in helping to make the right decisions.
If the Buyer is financing the purchase of your property then most likely the Agreement of Sale is conditional upon such financing. A licensed appraiser will appraise the property to determine the value for the lending institution. Depending on the financing the lender may require other documents such as a termite inspection report. This is completed mainly to confirm a lenders investment in the property.
You will be informed of a date scheduled for the appraisal. It would be best to address an appraisal as if it were a showing with the same due diligence as noted above. Give it your best presentation!
The appraisal will document and verify the
Step 9: Contingencies
A Contingency clause in the Agreement of Sale contract gives the parties the right to terminate the agreement under certain conditions that must be met before completing the sale contact. An example of some contingencies are: Buyer obtaining financing and insurance, good title and reports, out come of any inspections, etc.
Step 9: Title & Escrow Documents
( see ” the Closing Process ” above paragraph 4 )
Step 10: Settlement
Pre-Settlement: Transfer and/or Shut off home services and utilities.
The Buyer will make a final Walk-Through inspection the day before or the day of the Settlement/Closing. The Buyer will verify that everything is in order as when the buyer last viewed the property and any items as per the Sale Agreement.
( see ” the Closing Process ” above paragraph 5 & 6 )
The Seller should convey all the keys and any important information about the house ( warranties, appliance, electric garage opener etc )
Any funds from the transaction can be wired electronically to your account or have a check issued to you at closing.
As Noted in the beginning of this article that there are many moving parts to a home sale. All our clients are kept well informed and up-to-date throughout the entire process. Communicating regularly makes our clients less stressed. We even supply to the Seller a Punch List of the sale process noting when tasks are to be complete and how it is progressing and on track. Contact Us Now
copyright 2017 Article By: Michaelangelo Greco Realtor 1-17-2017