A Guide For Home Sellers

Timeline of a Home Sale

Step 1: Hire a licensed real estate salesperson
Step 2: Assess your home’s value using market knowledge and prices of competing homes to set the list price
Step 3: Get your home ready for photography and showing
Step 4: Begin marketing the home
Step 5: Showings—Buyers will tour the home and determine if it’s right for them
Step 6: Negotiate Offers—Evaluate and negotiate offers on your home
Step 7: Manage Closing—Work with the buyer’s agent, lawyers and title to finish the sale

Housing Market and Home Pricing
Your home’s market value reflects its features, condition, location and level of competition in its local area.

When the inventory of homes is low, home prices tend to be high and demand tends to be high. This is great news for home sellers as it enables them to get a strong return on their investment. However, even in this environment, there are still homes that sit on the market for weeks and months, waiting for an offer. During this time, owners are still making payments on their mortgages without getting the equity out of their homes.

What do buyers and buyer agents think about homes that have been on the market for a long time? The first impression a buyer gets about a property that has been listed for a long time in a hot market is “Something must be wrong with that home.” That thought will scare away many buyers, and it will prompt the ones who remain interested to submit low-ball offers.

Why are those homes still on the market in the first place? It’s because they are often priced “out of the market” when they should be priced “in the market”. A home must be priced competitively in order to be considered “in the market”. In addition, it must be prepared nicely in order to net the most money for its seller. Homes that are overpriced and/or are in too much disrepair show poorly and tend not to sell. Homes that are slightly overpriced or not adequately prepared to show risk staying on the market for a long period, ultimately selling for way under the initial asking price and causing their sellers a lot of time and frustration. To avoid this, I recommend listing homes at the correct price from the start.

Preparation is Key
Just as first impressions are important for people, they can also be make-or-break for a home. When potential buyers walk into your house, they will start to evaluate everything they see. Their impression will ultimately determine how much they are willing to offer on a property...or even if they’ll be interested in buying it at all.

Therefore, in order to get you the most money possible for your home, careful preparation is needed before putting it on the market. Quality preparation that will leave buyers with the best impression of your house involves three elements:

1. Repairs
There are several reasons to complete repairs on your home before you put it on the market. Ultimately, buyers will pay more for a home to avoid the work of fixing it, and they will pay faster.

Moreover, any money you invest into repairs before you list—when you have time to price-shop and to use a little bit of elbow grease—will be far less than the quote from the home inspector or the concessions for which buyers will ask.

The good news is that most repairs are merely cosmetic and fairly inexpensive. Think of the things on your to-do list: that leaky faucet and the cracked bathroom tile that were bothering you when you lived in the house; they’re going to bother the new owners, too.

2. Cleanliness
You wouldn’t want your mother to come over when your house is dirty, would you? And you’re not even trying to get her to shell out thousands of dollar for the place!

Buyers are easily distracted, and they will tend to focus on the negatives instead of the positives of each home they tour. Each dish left in the sink and each dust bunny in the corner is going to detract from the perceived value of your home, which means a lower offer amount and more time on the market for you.

3. Staging
According to a recent study by the National Association of REALTORS, 96% of buyer agents reported that staging had some effect on their client’s view of homes. They said that staging made it easier for their clients to visualize the properties as a future home and that they were more likely to over look property faults. Staging can reduce the time of a home on the market by as much as 90%.

And these effects turned into cash for sellers like you. The survey reveals that 52% of buyer clients were willing to offer more on a staged home than a similar home that was not staged—as much as 20% more than asking price!

Please note that staging is not always necessary and hiring a professional stager is not always necessary. I advise each of my clients regarding this matter according to their individual circumstances and budget. And I provide resources for excellent vendors and service people.

Managing showings
Once we’ve decided to work together and agreed on a price for your home and prepped it, you’re ready for the public to see your home.

What is a showing?
A showing takes place either at an open house, which is a scheduled session when anyone can come by, sometimes without an appointment, or during a private appointment scheduled with me as your listing agent.

How do I prepare my house for a showing?
I will advise you on the specifics for your home preparations so that your house is positioned competitively in the market. Preparations will likely include two phases. During phase one, before photos are taken and before the first showing, you should:

Clean deeply
Clean or replace carpets
Eliminate odors (clean the fireplace, remove musty rugs and litter boxes, etc.)
Do minor repairs such as caulking tubs and windows
Make major repairs — if needed and in your budget— such as replacing your counters or appliances
Remove excessive decorations and furniture
Remove personal items such as family photos
Remove clutter from every surface and storage space
Reorganize and clean your closets and pack excess items
Replace outdated ceiling fixtures and clean lighting fixtures
Upgrade your lighting or light bulbs to make your rooms brighter
Paint some or all of your house, inside, including walls, trim and ceilings
Add a color scheme with rugs or pillows to warm up your home, if needed
Stage your furniture to showcase your home’s best features
Spruce up the landscaping to boost curb appeal. Keep things tidy and trimmed.
Power-wash your decks and sidewalks, if needed
Wash or paint the exterior of the house
Freshen the front door
Apply a fresh coat of paint or stain to wooden fences

What Can I Expect When Showing My House?
Three important things you can do to help get your house sold are:

Leave when your house is being shown. Buyers prefer to look at homes when they can move around freely and the owners aren’t there.
Make your house as available as possible. While it may be inconvenient to show your home at dinnertime or on weekends, buyers who can’t see a property when they’re eager may cross it off their list.
Listen to any feedback from buyers or agents about ways you can make your home more appealing.

Review offers
Once I have notified you that you have an offer on your home, you need to evaluate that offer and decide how to respond.

What is an offer?
An offer to buy your home is a purchase agreement signed by the potential buyer that includes:

The amount of the offer
An explanation of how the buyers will pay, such as cash or a pre-approval for financing
The terms—such as a request for closing cost help or contingencies such as the sale of the buyer’s house, a final mortgage approval, a satisfactory home inspection and an appraisal
A target date for closing
An earnest money deposit
A time limit for the offer

How do I evaluate each offer?
When you receive an offer to buy your home, I will review it and consider whether you would want to accept it. Whether you have one offer or several, your and I will look at:

The amount offered
Whether the buyer has included or waived contingencies
Where the funds are coming from, such as all-cash, a reputable local lender, a well-known online lender, or an unknown out-of-town lender
The proposed closing date and date of possession of the house to see if it aligns with your needs
Any special requests for items to convey or for special inspections

What happens if I receive multiple offers?
If you receive multiple offers, I will advise you on one of these options:

Accept the best offer. If one offer stands out above the rest, you can accept that one right away. but be careful not to be swayed by a high offer if the financing seems uncertain or if the buyer hasn’t explained a plan for a possible low appraisal.
Counter all the offers to get a better price and terms. You can ask all potential buyers to give you their best offer by a certain deadline.
Counter one offer that’s close to what you want. If you like one offer but think the buyers could do a little better, you can send them a counteroffer to see if they’ll accept it.

You and the buyers can negotiate until you both agree on the final contract. I will be your best ally during the negotiations because I am equipped with the data and knowledge to guide you.

Prepare for inspection
Most buyers request a home inspection as a condition of their offer. While a home inspector will dig more deeply into your home than a buyer, the preparation you made before your first showing should help you get ready for the inspection. I will also advise you regarding this.

What is a home inspection?
A home inspection is a thorough review of your home’s structure and systems by a professional home inspector. Buyers can use the inspection report to decide to rescind their offer if a major issue is uncovered or to request repairs if the contract is contingent on a satisfactory report. In some cases, a home inspection is solely for the buyers’ information and can’t be used to negotiate.

What is looked at during a home inspection?
The inspector will check:

Structural conditions such as the foundation, beams and floors
Roof condition
Mechanical systems such as heat and air conditioning
Appliances – to make sure they’re working, although some inspectors skip appliances that are not built-in
Plumbing – for leaks, rust and water pressure
Electrical systems such as grounded outlets and code violations
Safety issues such as stairs, handrails, mold or chimney maintenance

What’s not looked at during a home inspection?
The inspector won’t check some items that are unusual or inaccessible, such as:

Septic systems
Wells
Underground pipes and sprinkler systems
Swimming pools and spas
Playground equipment

How should I prepare for an inspection?
Before the home inspector arrives, you should:

Clean your house
Remove or crate your pets
Make sure all your light bulbs work
Empty your washing machine, dryer, oven, and dishwasher – in case they are inspected
Make sure everything is accessible, including your attic, a crawlspace, your garage and any sheds
Leave a note if anything doesn’t work and explain that you’re getting it fixed
Provide documents about maintenance and repairs
Leave your cell phone number for the inspector
Leave the house

What happens now?
Once the inspection report has been generated, we can discuss how to handle any possible issues the buyers mention. You can negotiate with the buyers, decide to fix an item, provide money for the buyers to fix it themselves or provide documentation that the problem has already been addressed. I will help you handle any inspection issues.

Prepare for appraisal
As you near the end of your home sale journey, you will need to pass one more test: an appraisal. I will help you gather materials and prepare for the appraiser’s visit.

What is an appraisal?
An appraisal is an objective valuation of your property that serves as a safeguard for the buyer and the buyer’s lender. Although the buyer pays for an appraisal, the appraiser actually works for the lender. While an appraiser may look at some of the same things as a home inspector, the result is an appraised value of your property rather than a condition report.

How is my house appraised?
Appraisers use as many measurable pieces of data available to provide an accurate value of your property, including:

Comparable properties in your area that are of similar size, age and condition
The condition of your home’s systems and structure
The square feet of your property
The number of bedrooms and bathrooms
Your location
The quality of your flooring, plumbing and electrical systems

Appraisers include research about other properties and neighborhood values, as well as an in-person visit for their evaluation of your home.

How should I prepare for an appraisal?
Preparing for an appraisal is similar to prepping for an inspection. You should:

Provide a list of all major improvements to the home and the age and condition of your roof, heating and air conditioning system, and appliances
Provide any permits required for home improvements
Clean your house
Provide full access to all rooms and spaces, including the garage, sheds, attic and crawlspace
Remove or crate your pets
Leave the house, or at least stay out of the appraiser’s way

How can an appraisal affect my home sale?
An appraisal could require a renegotiation if the property value comes in lower than the sales price. The appraised value dictates the maximum amount the lender will allow the buyers to borrow, minus their down payment. Depending on how the contract was written, if the appraisal is low, you can:

Ask the buyer to come up with extra cash to make up the difference between the loan amount and the purchase price
Reduce your price to the appraised value
Split the difference with the buyer
Cancel the contract

I will advise you on your options in the context of the contract and market conditions.

Closing
Closing is the final step in transferring property ownership from the seller to the buyer. An attorney, “closer” or escrow officer reviews the contract to determine payment responsibilities, prepares the necessary documents, and oversees the actual closing. During this time, all outstanding debts are cleared, the buyer’s title is recorded, and any payments due are received by the appropriate parties.

What should you do before closing?
Before the closing day, you’ll need to:

Take care of repairs required by the contract
Keep all receipts and invoices and before-and-after photos of repairs
Gather all appliance manuals and warranties for your buyers
Hire a mover
Cancel all utilities for the day after you move
Cancel all utilities for the day after you move
Change your address
Review all settlement documents, especially the settlement statement
Check the property survey to be sure it’s correct
Clean the house
Prepare for the buyer’s final walk-through

What should you bring to the closing?

A government issued photo i.d.
House keys
Garage door opener
Mailbox keys and any other spare keys
Completed Seller’s Disclosure
Copy of survey of the property

What can you expect when closing?
Sellers may or may not attend the closing, so you should consult me and the settlement company to decide what’s best. You, the seller, can sign all documents before the official closing. Seller’s expenses, which are deducted from the proceeds of the sale, include:

Final balance on the mortgage and penalties, if applicable
Real estate commissions
Pro-rated property taxes, utility bills, homeowner’s insurance, and homeowners association dues
any claims against the property (unpaid assessments)
title insurance policy
home warranty

If you can’t move before the closing, you’ll need to arrange a rent-back from the buyers. I will help you complete appropriate paperwork for a rent-back. If you are moving, the buyers will do a walk-through of your home within 24 hours before the closing to check that the property is in good condition. If the buyers find something that needs to be fixed, I can help you decide how to handle it. Whether or not you attend the closing, you’ll need to provide house keys to your buyers, along with all alarm codes, remote controls for the garage, and mailbox or gate keys.

What’s next?
After the closing, you’ll:

Receive the proceeds from the sale, usually by wire transfer.
Cancel your homeowner’s insurance “post-close” – to make sure you’re covered on that day.
Save your closing documents and home improvement records for taxes.

Congratulations! You’ve successfully sold your home!