Selling a Home FAQ’s & Seldom Asked Questions
Homeowners and real estate agents alike concern themselves with the perfect time of year to sell a home because the time of year you list your home will greatly affect how fast your home sells, and how much you get for it. So what is the best time of year to sell your home? Most times, the best time to sell your home will coincide with the time of year when the weather is best; people are more interested in going out to view homes when the weather is nice.
The month of June is the best time to sell a home, as this is when the market peaks for the year. But if you list your home in June, you might miss that window because buyers are already out viewing the homes that were listed just a bit earlier than that. Typically the best time to list your home is between mid-March and mid-April. Homes that are in areas that experience nice weather all year round can start listing closer to the beginning or middle of March, while homes that are in areas that experience harsh winters are advised to wait until the beginning or middle of April.
In the report “The New Rules of Real Estate,” co-authored by Spencer Rascoff and Stan Humphries, listing your home during these times will help it sell 15 per cent faster and will garner 2 per cent more than the average listing.
When selling a home, it can be overwhelming to think about all the many factors that need to be taken into consideration in order to sell your home quickly, and for the value you want. But when you break it down into the three most important considerations: price, condition, and exposure, it becomes much easier to focus on the factors that will make the biggest difference.
Price is one of the most important factors to take into consideration because if you don’t price your property properly, it will automatically turn buyers off, even often before they’ve even seen the inside of your home.
The condition of your home is also of utmost importance when selling, because most buyers won’t be interested in purchasing a home that still need a lot of work put into them. Even if your home doesn’t have holes in the wall, peeling paint, water stains, and even dirty carpets can turn buyers away so it’s extremely important to make sure your home is in the very best condition before showing it to potential buyers.
The third most important factor to consider when selling your home is the exposure it receives while on the market. Even with the home priced at a great value for buyers and pristine condition inside and out, if buyers don’t know about your home they’re simply not going to buy it. It’s for this reason that you need to make sure your home is getting as much exposure as possible. A lot of that will fall on your real estate agent’s shoulders, through advertising and getting your home listed in the local multiple listings service. However, to increase your exposure even more you also need to get the word out to whoever you can and even more importantly, make sure you and your home are available for open houses.
So you know that price is one of the most important factors to consider when listing your home. If you price your home too high, it will turn buyers away because they don’t see the value; and if you price it too low, you could lose out on thousands of dollars. But how do you know what a fair price is for both you and buyers? You can be prepared to just give your real estate agent a number based on what you paid for the home and what you think the home is worth; but that’s not the smartest way to go about it. For better or worse, the market has most likely changed since you purchased your home, making a fair comparison very difficult. Also, sentimental value can come into play, placing a bias on any price you determine is fair for your home. A much better way to price your home is to get an appraisal, or have a comparative market analysis performed, which will tell you how much your home is worth based on location, condition, and market conditions.
Appraisals can be costly, ranging from $300 for a single-family home and even more for multi-family dwellings. They are performed by a professional appraiser who knows to look at things such as location, square footage, water front possibilities, and amenities including garages, number of rooms, bathrooms, etc. Appraisals can give you a precise number to value your property at, and they’re even defendable in court.
A comparative market analysis is similar to an appraisal, but it’s less formal and not admissible in court. Because they are not official, real estate agents will often provide clients with a free comparative market analysis in hopes to gain that client and eventually, earn them a commission. Even though these analyses are informal, agents still need to evaluate your home based on accepted appraisal practices, meaning that they too will take into consideration the size and style of the home, location, condition, and what other similar homes are being sold for on the market. While these analyses don’t provide a precise number the way appraisals do, they can provide a broad price range from which a number can be agreed upon.
Both appraisals and comparative market analyses should be submitted to the homeowner in writing.
The answer to this question depends largely on your situation. If you are looking to purchase a home, it is very possible that can do so without hiring a real estate agent. There are tons of resources available for people looking to purchase real estate. Often, for a buyer, the only job for a real estate agent is to unlock the doors to allow you to look inside.
It is completely possible for you to perform research, negotiate prices and buy a house without an agent – but for most people this is not recommended. Real estate agents often help in the closing and escrow process. You can also use a property attorney for those procedures as well. The answer to whether or not you need to hire a real estate agent gets trickier if you are looking to sell your home. It is possible to sell your home by yourself using local marketing, the internet and advertising. But using a real estate agent all that work is done for you.
In short, choosing whether or not to use a real estate agent is like anything else. You can choose to do it yourself but most of the time it just makes sense to use a professional.
Truthfully, whether or not you decide to take on the task of making repairs on your home is up to you, but there are several things you should take into consideration before making the decision.
The first is that if your home requires any major repairs, such as fixing a foundation problem, you probably are better off just making the repairs before selling the home. While these types of repairs might not get you a huge increase in price, because buyers simply won’t purchase a home that’s dangerous or inhabitable, you’ll ultimately sell the home much more quickly and won’t have to worry about the problem causing any problems later, such as lawsuits.
If there are minor problems such as a leaky faucet, a laundry hook-up that doesn’t work, or a half-finished basement, you’ll have to carefully weigh your options before deciding whether or not you want to make the repairs yourself. If you do make the repairs, it can greatly add value to your home (depending on what the repair was), and you can usually also ask for more in the price than the project cost you to complete. If you don’t make the repairs however, the buyer might include an inspection clause in the contract which will give them the option of backing out of the deal if issues or concerns are found within the home. If that happens, it could cause a great delay during the selling of your home. Also consider that if you don’t make the repairs, buyers could try to use those small issues to try and negotiate a lower price for the home.
While you might not want to tell potential buyers everything there is to know about your home (including the fact that a few shingles are loose on the roof or that a post in the fence continuously breaks), there are some things you legally have to tell buyers, no matter how unpleasant they might be. These items that you must include in a written disclosure vary from state to state so it’s very important that you ask your real estate agent about any forms or guidelines that might be provided by the Association of Realtors in your state. Some of the most common things you’ll have to disclose are:
Deaths in the home. Different states have very different laws about this with some making it illegal to not tell potential buyers about any death in the home, while in other states you don’t have to disclose any death in the home. In Texas, if the death didn’t have anything to do with the property itself, the information does not have to be disclosed.
Nuisances. These are classified as annoying noises, smells, or sights around the property that irritate the property owners, but aren’t on the actual property itself. These nuisances could include things like train tracks, airports, industrial manufacturing plants, bad odors, smoke, landfills, and shooting ranges, to name just a few possibilities. While some states, like North Carolina and Michigan, do require that sellers disclose these nuisances, other states – such as Pennsylvania – leave the burden with the buyers to determine these nuisances for themselves.
Environmental and natural hazards. Hawaii has a law that sellers must disclose when homes are in a tsunami zone, while New York requires sellers to tell buyers if the home is in a flood plain or wetland. Again, different states have different requirements but if the home is at an increased risk of damage from a natural disaster, most states require that the seller disclose this information to any and all potential buyers.
Any information pertaining to the Homeowners’ Association. If the home is a unit in a condo building or part of another multi-unit building, there’s a good chance that there’s a Homeowners’ Association. It’s imperative to tell all buyers any and all information regarding the association, including past meeting notes and information regarding membership dues. These can often be quite costly and add greatly to the purchase price. Even when this information is not required by law to be disclosed by the sellers, it should be.
History of all repairs. While you’ll definitely want to tell potential buyers about recent repairs in order to increase the property price, you’ll also want to tell them about any repairs that have been done in the past, what exactly was done, and why. These repairs could become issues once again after the buyers have moved into the home and they need to know what to be watching out for.
Water damage. Water damage can be one of the most disastrous, and most expensive, problems with a home so most states have a law in place that sellers must disclose all areas of water damage, repairs that have been done to repair it, and anything that puts certain areas at risk (like heavily watering the grass along the foundation).
Missing large items. While buyers do try to take a good look at the house and take note of everything that is or isn’t included, sometimes there are still some things that are missing and that buyers simply don’t notice during their many viewings. Things like missing water heaters, exhaust fans, and rain gutters can make it very difficult to live in a home but aren’t at the top of one’s list when they’re looking at homes. Only after they move in do they realize these essential items are missing and by then, they’re put in a very bad position. Some states, such as Michigan and Texas, have laws in place that requires sellers to provide a list of all the items that are included with the sale of the home so that buyers can read over it and determine what they will need to purchase before moving in.
Specialty disclosures. Some states have very specific conditions due to their location and the special issues or problems pertaining to that geographical area. Because termites are extremely common in Texas, the state has a law that requires sellers disclose that information, while other areas have special historical districts that place restrictions on what homeowners can and cannot do to their home in the manner of improvements. Sellers are usually required by law to disclose that information so that buyers are aware of what will be required of them upon purchasing the home.
States don’t usually place laws on whether or not you tell potential buyers about other offers you’ve received on your home, but it can often be advantageous for you to do so. Telling other buyers that you’ve received offers on your home can place a bit of pressure on them to make an offer or not, and it can also make your home seem more desirable when people know that it’s already garnered interest.
However, never think that you have to disclose the terms of any other offers you’ve received, because you don’t. If you want to disclose the amount you’ve been offered in order to increase the bid you can, but in order to respect the privacy of all parties, never disclose anything like the name of the other buyer or any information pertaining to that person. You also don’t need to disclose other terms of the offer, including any clauses, inclusions, or exclusions that are included.
Contingency clauses are clauses that buyers will include in their offers to protect them from unforeseen circumstances that may crop up during the process of the sale. By including contingency clauses, the buyer can express their sincere interest in buying the home simply based on one or two quick viewings. From the time the offer is submitted to the closing date, a number of things can occur, problems can be found with the home, and those problems can make it impossible for the buyer to purchase the home. For this reason, contingency clauses are put into place that provide the buyer with an “out” should they need it later on.
The two contingency clauses that are more common than any others are the inspection clause, and the financing clause.
The inspection clause is included in the offer to purchase because the inspection will not yet have been performed upon time of submitting the offer. If it’s found after the inspection is completed that there are major issues with the home or a lot of repairs that are needed, the buyers can point to the inspection clause and retract their offer.
Financing clauses are written into offers to purchase with nearly every single contract that’s drawn for the purchase of any home. This is because once again, while buyers might have an idea of how much they can afford and may even have pre-approvals, they won’t actually have the financing firmed up and in place. There are also many things that can happen during the financing process that can cause the financing to fall through for the buyer and make purchasing the home impossible. Financial clauses keep the buyer from being legally and contractually bound to buy the home when there’s simply no way they can do so.
It can be extremely discouraging when you’ve had your home listed for sale for several weeks, or even months, and the buyers simply don’t seem interested. Fortunately, it’s not a hopeless situation and there are some things you can do to make your home more attractive. If buyers simply aren’t expressing interest in your home, it’s typically for two reasons: the home is simply not in good condition, or it’s priced too high.
If you feel that your home should be getting more attention, and more offers, than it currently is, first take a walk around both the inside and outside of your home looking for cosmetic defects that might be turning buyers away. Maybe it’s something you missed the first time you made repairs to these small issues, or maybe it’s something you thought wouldn’t be a big deal. Either way, take care of all of these issues and it could make the difference between not having any offers, and choosing the best one of a bunch.
If your home is simply priced too high however, it won’t matter if you’ve taken care of all the repairs and cosmetic defects; buyers simply won’t find the price equivalent to the value of the home. Speak to your real estate agent about lowering the price. They’ll have the knowledge about how much you should reduce the price, as well as when you should.
If you’ve taken care of all issues big and small around the home, and you’re sure that the asking price is fair, and you’re still not getting any interest in the home, you might want to consider taking your home off the market for at least a few weeks. When you relist it, it will appear as a new listing and when that happens, it often garners new interest.
Sometimes homeowners get into the unfortunate position of having mortgage payments that are greater than the total value of their home. When this happens, and they want to sell their home, they can do a short sale. Short sales are usually very complicated because they include speaking to mortgage insurers if the home had mortgage insurance placed upon it during the time of purchase, and because it’s often dependent on the bank’s agreement to split the difference between the value of the home and the remaining mortgage payments that are due. Once all of these issues are resolved the sale of the home can be completed but short sales are often the benefit of the buyer and not the seller.
The most common reasons sellers find themselves in the position of negotiating a short sale is because they can’t afford the home and need to downsize, or relocation has forced them to sell their home at a time when the market conditions may not be favorable for them to do so.
It’s important for homeowners to remember that the way they live in their home and the way they sell their home are two different things. It’s well known that in order for buyers to be able to imagine their own belongings in the home, there needs to be fewer of your things around; this is why decluttering is so important, and why it should be the first thing you do. Organize your closets, take down excessive artwork or pictures from the walls, and clear counters and other surfaces of most items. This is the time to throw things out or donate them if you can, as it will be difficult to hide your excess “stuff” when potential buyers are going through cabinets and closets looking at the space.
While going for this “clean” look, make sure that you actually clean every inch of your home. Dust everything, clean furniture, scrub the floors, and clean all other surfaces and appliances. When doing this cleaning you need to make sure that the kitchen and bathrooms especially are spotless. These are the two rooms that will really sell buyers or turn them off of the home so put in some extra time and effort when cleaning these two rooms.
And when cleaning, don’t forget the outdoors! Curb appeal, or rather, how nice your home looks from the outside, is a huge factor as to when your home will sell and how many interested buyers will set up a viewing appointment. Make sure that sweep the sidewalk regularly, clean up any garbage, debris, or clutter from your yard and driveway, keep lawns and gardens nicely maintained, and clean both the inside and outside of windows.
It’s important to also remember that while you need to get rid of clutter, you also need to maintain a balance of still keeping a home that looks lived-in and comfortable. Otherwise, buyers will get the impression that the home is cold and stark.
Once you do have potential buyers inside the home, there are a few more things you can do to make it more pleasant. Cooking and baking things like cookies, apple pies, or even spaghetti sauce can add an enticing aroma to the air, and flowers throughout the home can also bring a burst of freshness. Many homeowners like to have nice, soft music playing in the background to make buyers feel more comfortable and have them look and linger a little longer.
This answer will also let you know about how the agent intends to complete the job for you. Their answer should include their marketing strategy, how the agents handles multiple offers, how often they’re going to hold open houses, where they will be advertising, and the link to the home on the local multiple listings service. Even before going into too much detail on your specific property an agent should have some specific ideas about how they intend to sell the property because this is their profession and what they do every single day. They will also have ideas about when the best time to list your home is, strategies specific to your neighborhood and location, and more. Above all what you want to hear is that your real estate agent has a clear-cut strategy that they’re going to follow and that has proven to be successful for them in the past.
The answer to this question will differ depending on if you are using the agent for buying or selling. A good real estate agent looking to help you purchase a house should have a sale price on average negotiated for a lower price than the listing price. An agent selling houses should be able to negotiate prices as close to the sale price as possible. This is for obvious reasons- if you are selling a house you want it to sell for as close as your asking price as possible and if you are buying a house you want to pay less. A good agent will have a decent average ratio of list prices to sales prices. These ratios may also differ depending on whether it is a buyer’s or a seller’s market. Stick to ratios close to these and you will be better off:
- In a buyer’s market look for a selling agent with a list to sales ratio between 97% and 100%.
- In a seller’s market look for a selling agent with a list to sales ratio from 100% to 110% of the list price.
- In a buyer’s market look for a buyer’s agent with a list to sales ratio between 90% and 97%.
- In a seller’s market look for a buyer’s agent with a list to sales ratio of 100% to about 103%.
This seems like a no-brainer but you have to be sure that you are given the opportunity to review any documents before you sign them. Professional real estate agents should be willing to give you all documents to look over before you sign and many will give them to you up front. Ideally, you want to be given the opportunity to take any and all documents home to look them over before signing, and not just have them tossed at you with five minutes left to sign. Any agent who is not willing to show you documents is not worth hiring.
You can also ask, before any work has even begun, if the agent will show you a sample purchase agreement. Check if these agreements are exclusive or non-exclusive. Also ask to see any agency disclosures, including seller or buyer disclosures. If you are looking to sell your home, check the listing agreement to see if it has a part about your right to sell your home yourself if you choose. Also, have the agent go over all of the fees listed on the documents. If you find any fees that you do not understand, ask the agent to explain it to you. You don’t want to get stuck signing an agreement with odd or unnecessary fees.
Real estate agents often work with lots of other professionals in the housing market and should be able to refer you to these people. Having this kind of access to the best professionals in the business and in your area is advice that can prove to be invaluable, so this is something you should always you’re your real estate agent about upfront. They will be able to refer you to mortgage brokers, title companies, home appraisers, inspectors, escrow agents and contractors that they may have worked with in the past. When selling your home you could need to make multiple repairs and so, require many different contractors in many different areas of expertise so making sure that your real estate agent also knows these professionals can save you a lot of time in the long run.
In addition o getting the names of these professional, also ask about how the agent works with these other professionals. If they are ‘affiliated’ they will be receiving compensation for directing you to them, so be sure to ask. That compensation will be tacked onto your charge and that’s a fee you don’t want to have to pay.
A real estate agent’s fees will be determined one of two ways: a commission on the asking price, or a commission on the total price paid for the home. You want to work with a real estate agent that will only charge a commission based on the total price paid for the home. This way the commission remains completely fair and completely in line with the total price you receive, not the price you were hoping to receive. By choosing to work with a real estate agent that will charge commission only against the total price paid for the home, you won’t end up paying much more for the commission than you received in the sale.
In addition to just their commission, make sure that you’re also aware of any fees attached to purchase agreements and listing the home. Some agents charge extra for these while others don’t. An agent asking for these fees isn’t necessarily a bad agent, but you do want to make sure you know about it so that you’re not surprised with more fees than you thought at the end of the selling process.
A CO is a certificate showing that any construction that’s been done on the property has been approved by the town or city and that it’s safe and habitable by the standards set out by that town or city. Mortgage lenders are extremely reluctant to lend to any property that has a history of any type of construction that didn’t also carry a CO. This is important for buyers to know because they might not be able to obtain financing, but it’s also important for sellers to know before any construction or major projects are completed because after the fact there’s little that can be done about it, and it could greatly impact whether or not your home will sell.
This depends on where you are in the selling process when you decide you don’t want to sell. If the real estate agent hasn’t properly advertised your property, hasn’t had any offers or even a lot of interest in the property, and hasn’t advised you on why this is happening or what can be done to change it, sometimes you can back out of the deal without too many repercussions.
However, if the agent has done all of the work and has even found a ready, willing, and able buyer that will pay the full asking price and then you decide you don’t want to sell, you will most likely still have to pay the agent their commission.
If you get even further into the deal, such as the buyer has sold their previous home and has nowhere to go after a certain date, backing out of the deal at the last minute might make you responsible for expenses they incurred due to your decision such as hotel fees, storage fees, etc. When you decide you want to sell your home, you want to be very sure that you do in fact, want to sell your home.
This is something you have to ask your real estate agent before you start the selling process, but typically, yes you can, as long as the deal hasn’t gone too far. Once you receive an offer on your home, there are two more phases that you need to go through before the home will no longer be yours after a certain date; those are the acceptance and the written contract.
When you accept an offer it’s really just a matter of your real estate agent calling their real estate agent and letting them know that you’ve accepted the offer. This tells them that they can stop house-hunting and it gives you an offer that you’re happy with. It’s during this phase that, should a better offer come in, you can walk away from the first deal relatively painlessly. After the offer has been accepted, a contract will be drawn up that will outline all of the agreements made by both parties, inclusions and exclusions on the property, and all of the important dates you’ll both need to know throughout the rest of the process. Once this contract is signed by both parties, there’s really nothing that can be done – no matter what kind of offer comes in afterward.
However, you shouldn’t accept just any offer thinking that you have lots of time to determine if another, better offer will come in. Real estate agents want to close the deal as quickly as possible and so they usually try to get both parties to sign the contract almost immediately after the offer has been accepted by you.
The closing date is the date that all documents officially become binding, the deal is closed, and the house goes from being yours to being someone else’s. In many cases, the seller of the home also lives in the home and the closing date is also the date that they, as well as all of their belongings, need to be out of the home so that the new owner can move in. However, in some cases the seller of the home doesn’t live in the property and so, they don’t necessarily see a problem with allowing the buyer to move in a few days or even a week or two before the closing date. This can be a bad idea and can turn into a terrible situation for the seller.
There are a number of things that can go wrong between the acceptance of the offer and the closing date, and these issues can make the deal fall through. Should that happen and there be someone living in the home, you will now be the landlord of a tenant that has certain rights. Instead of cashing in on the sale of your home and excitedly moving into the next phase of your life, you might instead be deep in an eviction process that’s not only lengthy, but can also be very expensive.