Home Selling Steps
Establish the Market Type
The three basic types of real estate markets are the Buyer’s Market, the Seller’s Market, or the Balanced Market. As we explained on our page “Our Approach to Home Selling”, establishing which type of market you will be selling in is extremely important, as this will determine your market approach. There are several ways to establish the market type.
You can do your own research by reading the local newspaper, or searching the Internet for real estate price trends in your area, or contacting a real estate agent familiar with your area. Of course, a good real estate agent will have this information for you. If the agent is currently active in your area they will have sold homes and have homes currently listed for sale, and this gives the agent great insight as to the direction of the market.
A note here about the kind of agent you might want to talk with: Many listing agents focus their attentions on a small neighborhood or Farm as we call it. They will spend most of their time contacting local owners and building a rapport in the hopes that when the homeowner is ready to sell, they will contact their local agent. Other agents concentrate on a much larger area, say a City or County.
Real estate markets tend to affect large areas and often the local agent may be too focused on a small area to pick up the indications of a changing market. Therefore, if you are looking for a listing agent, we recommend that you find one who concentrates on a larger area than just your neighborhood.
Create a Financing Program
Whenever possible, try to place a financing packing on your home. The easier it is for potential home buyers to qualify and afford your home, the more buyers will be interested in buying it. This process if really above the heads of most real estate agents, and you should think about adding an experienced loan officer to your team.
A loan officer may be able to create a financing package for your home without any cost to you. On the other hand, if you are selling in a Buyer’s Market, you may need to consider adding some of your selling proceeds to the financing package to increase the number of buyers who can afford your asking price. This increased demand will equate to higher profits and a faster sale for you.
Most important here is that there are many Government Financing Programs available today in select areas throughout the country. You or your agent must investigate this potential. These programs can greatly effect the value of your home. Many sellers are caught off guard by this and only find out after the sale that the buyer has found a special financing program which was available on your home.
These programs may only effect your street or even your side of the street, and not the other homes close by. This of course will make your home more desirable and therefore more valuable. If you Contact Us we can help you with this process. By the way, we have found that most of these programs are often ignored by local listing agents.
Establish a Selling Price for you Home
The most crucial part of listing a home for sell is setting the price. Too high a price will chase away buyers who have seen similar homes on the market, but those homes were selling for less. Too low a price may bring in several buyers who want to bid on your home, but the ending price is rarely as high as you could attain if your home were priced properly from the start.
There are several ways to determine a good listing price. One can drive the area and price other homes that are currently listed for sale, or check the newspapers for the price of other homes, or search the Internet for home prices, etc. It would seem that the most accurate of these would be to drive through the immediate area around your home and look for similar homes for sale and draw some conclusions about the value of your home after making adjustments for the differences of the other homes. Different lots, square feet of the home, bedrooms, baths, views, pools and the like all effect price.
This may seem like the most effective, however, the truth is that it is not the value of the homes that are currently listed that determine your home’s value as much as the sale price of those homes that have already sold. The price of other homes that have not yet sold is important information to use in you analysis, because these are the homes you will compete with. However, the buyer’s appraiser will judge the value or your home based only on comparable properties which have sold and closed escrow.
The buyer may be willing to pay you more, but if the bank will not lend enough for the buyer to qualify. The buyer will have to look for another home to purchase. While it is true that you may eventually find a buyer willing and able to pay your price, this is a long shot and it is far more likely that you will have to reduce the price later and will have lost the impact of coming onto the market with a well priced home to begin with. Many buyers will pass on price reduced homes as they feel there must be something wrong with them.
This kind of valuation is not easily accomplished by someone other that an appraiser or a licensed real estate agent who has access to the local MLS and the county tax rolls. This is the obvious reason that we recommend that you seek the help of a real estate agent to help you price your home.
Prepare Your Home for Showing
After setting the price of you home, it is time to make it presentable for showing to prospective buyers. It is sometimes difficult for a home owner to see their home as strangers do. Our tastes are often different from the tastes of others, and nothing reflects our tastes more than the home we live in.
While the home may seem very comfortable to you, potential home buyers may see only strange colors, unusual order and clutter. The problem with bold patterns and color is that home buyers, try as they might, have a tough time seeing the home as they would decorate it. The lot and layout of the home may be just perfect for them, but they just can not get past that pink carpet and black walls.
It is not usually necessary to do much to your home other than some cosmetic alterations. A good spring cleaning and resetting the colors to neutral is usually helpful. The external eye of an honest neighbor or friend might be a good way of getting an assessment of you home, however, most friends will not want to hurt your feelings by pointing out flaws in your home’s interior design.
Again, an independent real estate agent might be the only person you can trust. We spend most of our lives walking through other peoples homes and watching our home buyers expressions as they walk those same homes with us. After a few years, one gets a good feel of what will and what will not sell.
If you must do this by yourself, try leaving your home for a day or two. Take a short weekend trip or even a long vacation if possible. Upon returning to your home, park out on the street and look at your home as objectively as possible. Pay attention to colors, smells, sounds, and any unfinished projects you have left. Walk in the front door with the same objectiveness. Close the door behind you, close your eyes and take in the smells and sounds. Open your eyes and pay attention to bold patterns or colors. Walk through each room the same way. You will pick up visual impacts, sounds and smells that you have grown accustom to, however, which will be new to strangers. It is best to limit these impacts where possible.
Let the new owners visualize their furniture and family in your home, not yours. Try to be as vanilla as possible. Think of your home as a blank page on which the new buyer must paint a picture of their lives. The easier for a home buyer to visually move into your home, the quicker the sale.
Place Your Home on the Market
Finally, it is time to place your home on the market. This involves using advertising to let the whole world know that you are selling your home, but in such a way as to restrict the inquiries to only those who can afford your home and who would want to buy your home. You can certainly do this yourself if you want to do all the work and pay for all the advertising. Alternatively, you can use a licensed real estate agent to do this for you. Of course, you will have to pay the agent a commission after the home is sold, but most agents will front the money for the advertising and screen all potential buyers so you only have to open your home to those who will qualify.
The basic types of advertising include yard signs, holding open houses, introducing you home to other local real estate agents through agent caravans, listing your home in the local MLS, advertising in local papers and magazines, and of course placing your home on the Internet.
The objective here is to expose your home to as many buyers as possible. Certainly, the fastest and surest way to do this is by listing it in the MLS, and in most areas, this can only be done by a real estate agent. If you are selling your home in a Seller’s Market this may be the only advertising you need. If this is the case, you can investigate our Discount Listing Program to save money on commissions. However, this kind of program will only be effective in a true Seller’s Market. If you are selling in a Buyer’s Market or a Balanced Market, we strongly suggest the maximum exposure possible.
Now simply sit back and wait for the right buyer to come along. Sounds simple, however, actually, this involves constant evaluation and re-evaluation. Too many inquiries may indicate too low a price, too few inquiries too high a price. A good agent will be able to make quick adjustments to the advertising in order to place your listing in just the right niche.
Open Your Home to Potential Buyers
Showing your home to strangers can be a dangerous proposition. Real estate agents all over the country are constantly hearing about fellow agents being accosted by criminals or about thefts from homes which have been opened to the public. The easier it is for a buyer to come in and see your home, the quicker it will sell. However, this also increases your risks of theft and other liabilities. On the other hand, if you make it too difficult to see, fewer buyers will come by and the longer it will take to sell your home.
There are several ways to let potential buyers come in and see your home. You can place a sign in your yard and invite buyers (and non-buyers) to simply knock at your door and ask to come in. A Lock Box can be placed on your door which will give real estate agents access to your home when you are not there. Appointments can be made where only qualified buyers are allowed to come into your home, and perhaps, only when you or your agent are present. Whichever way you decide, adding an experienced real estate agent to your team and allowing them to set up the showings may make a lot of sense here.
Entertain Offers and Negotiate the Sale
Perhaps the most challenging part of the process involves negotiating with buyers and buyer’s real estate agents. Here some past experience is very helpful. If you are trying to do this yourself, you must act detached. Buyer’s will often offer to buy your home at a much lower price than you have listed.
It is difficult for most sellers to appreciate this tactic, however, most times that is just what it is; a negotiating tactic. Be patient and counter all offers until you reach a mutually acceptable price. This can best be done by a real estate professional, however if you have just the right temperament, you may be successful yourself.
Complete the Transaction
This process can very from state to state. Basically, you must complete a great deal of paperwork and give it to the closing agent or escrow officer. The closing agent will collect the deed from you and the money from the buyer and the lender. If something goes wrong before the closing, they will return the money to the buyer and the deed to you. Otherwise, at the last minute, they will give you the money, and give the buyer the deed.
This process could take 30 days if everything goes well! If you are using a real agent, they will be coordinating all this for you.
There, wasn't that easy. You just sold your home. Hopefully, you can see how nice it would be to have a good real estate agent and a good loan officer on your team. If you would like to discuss that with us, please Contact Us and we will do everything we can to make sure the entire transactions is painless and easy for you.
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