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Major mistakes made by sellers
From incorrect financing to lack of preparation, there are countless mistakes that a seller can make when putting their house on the market. This report covers some of the most common mistakes made by sellers during the property selling process.
If you're serious about selling your house, it's important that you know the facts. It seems like a simple prospect – just put your house on the market, show it to a few buyers, and make the sale – but as many sellers find out, selling a home can be a difficult, expensive and long prospect. By knowing some valuable information about the real estate industry, as well as some tips and tricks about selling your property, you'll be able to more effectively tackle today's real estate market. This report will tell you how you can:
- Avoid making mistakes when selling your home
- Make you aware of the most common mistakes home sellers make
10 Biggest Mistakes that Sellers Make
Selling your home can be a difficult job, especially since you're competing against hundreds of other properties. It's vital that you be aware of what works and doesn't work when it comes to home selling. Consider the following list of the most common mistakes made by home sellers:
Mistake 1: Setting the wrong price for your home
Experience shows the right price sells a house faster than any other factor. When the listing price is more than 5% over market value, the price alone discourages buyers. That's because an overpriced house scares away potential buyers who think they can't even afford to look. Buyers who do look at an overpriced house know they can get more house for their money elsewhere.
Mistake 2: Selling your home in ‘As-Is' condition
In today's competitive market, most buyers will not even consider a house that needs fix ups. In contrast, a sparkling showcase home gets top dollar when it comes to the bottom line. What most buyers are looking for is an inviting home in move-in condition, one that looks as good as a model home. Buyers who are willing to tackle the repairs after moving in automatically subtract the cost of needed fix-ups from the price they offer. Either way, you save nothing by putting off fix-ups and likely slow the sale of your house.
Mistake 3: Selling your home with a dull interior
A clean, bright decor is what buyers want. Probably the best dollar-for-dollar investment for selling your home fast is fresh paint. Neutral colors are best. Next to fresh paint, new carpeting--replaced for either condition or color--makes a big difference. Elbow grease can be as effective as spending cash to brighten your home. Start by ruthlessly getting rid of the junk you've accumulated. Clean each room top to bottom. Dare to make your home look better than you've ever had it looking before. Focus on the three rooms most inspected--kitchen, master bedroom and garage (if you've got one). Forget those and you may as well forget the buyer, too. In the kitchen, clear off counters and organize cupboards. Keep in mind, some prospects will judge the whole house by the cleanliness of the oven or refrigerator. In the master bedroom, move or remove furniture to create spaciousness. The ideal garage stores only cars and perhaps an orderly display of garden tools, so throw out your junk to show off room for theirs.
Mistake 4: No ‘Curb Appeal'
Your house gets only one chance to make a good first impression. That's why "curb appeal" is one of the most critical points in selling. Buyers are apt to fall in love at first sight--or not at all. If your home lacks curb appeal, chances are the first impression will not be counteracted by the most perfect floor plan or the most tasteful interior. Spruce up the view of the house from the street, including lawn, shrubs, shutters, windows, front door, mailbox. Add potted flowers out front, a wreath on the door, brass outdoor lighting fixtures--whatever will enhance your home's "buy me" look.
Mistake 5: Over-improving your home
While it's important to fix whatever needs fixing to get your home ready for sale, undertaking a major project could cost more money than you would recover from the sale. Spending too much on remodelling projects just drains money out of your pocket. If your improvements will push your home's value more than 20% over the average neighbouring home values, don't expect to recoup the entire cost. (Some major projects, however, like replacing a roof, should be done if they are needed.)
Mistake 6: Financing Incentives
The more buyers you appeal to in terms of financing, the greater your chances of selling faster. Be flexible, consider paying closing costs or points, providing a decorator's allowance or other irresistible buyer incentives.
Mistake 7: Stretching out buyer negotiations
One of the most important moves you can make is to reply immediately to an offer. When buyers make an offer they are, right then, in the mood to buy. Moods, as you know, change, and you don't want to lose a sale because you stall in replying.
Mistake 8: Being Adversarial during negotiations
No one wins if you enter negotiations with boxing gloves on. Instead, approach negotiations in a positive frame of mind, not as an adversary of the buyer. After all, you both want the same thing--a sale. Leave most of the discussion of price, terms, possession and other conditions up to your agent. We'll make it our business to get you the best deal.
Mistake 9: Not having a presentable house
The presence of your family can make prospective buyers feel like intruders. If you're at home when your home is being shown, be your usual friendly--but low-key--self and keep children and pets out from underfoot. It's the agent's job to show buyers what they need to see. Buyers can better focus on your home's advantages by viewing them than by socializing. If an open house is scheduled, plan to be away from home, but let us know how to reach you quickly. When you're not at home at other times, agents accompanying prospects will leave their business card. Please alert us afterward so we can follow up.
Mistake 10: Selling without a professional
Going it alone like General Custer could invite disaster. Without a professional advisor, you probably won't sell. Even if you do sell, surveys show self-sellers often net less from the sale than sellers who use a real estate agent. Selling a house is a team effort between you and the listing agent. You'll find agents do a lot more than most people know--from bringing qualified buyers to keeping things on track to settlement.
28 Home-Selling Tips
"...discover how to protect and capitalize on your most important investment.."
Because your home may well be your largest asset, selling it is probably one of the most important decisions you will make in your life. To better understand the home selling process, a guide has been prepared from current industry insider reports. Through these 27 tips you will discover how to protect and capitalize on your most important investment, reduce stress, be in control of your situation, and make the most profit possible.
1. Understand Why You Are Selling Your Home
Your motivation to sell is the determining factor as to how you will approach the process. It affects everything from what you set your asking price at to how much time, money and effort you're willing to invest in order to prepare your home for sale. For example, if your goal is for a quick sale, this would deter-mine one approach. If you want to maximize your profit, the sales process might take longer thus determining a different approach.
2. Keep the Reason(s) You are Selling to Yourself
The reason(s) you are selling your home will affect the way you negotiate its sale. By keeping this to yourself you don't provide ammunition to your prospective buyers. For example, should they learn that you must move quickly, you could be placed at a disadvantage in the negotiation process. When asked, simply say that your housing needs have changed. Remember, the reason( s) you are selling is only for you to know .
3. Before Setting a Price - Do Your Homework
When you set your price, you make buyers aware of the absolute maximum they have to pay for your home. As a seller, you will want to get a selling price as close to the list price as possible. If you start out by pricing too high you run the risk of not being taken seriously by buyers and their agents and pricing too low can result in selling for much less than you were hoping for.
4. Setting Your Home's Sale Price
If You Live in a Subdivision - If your home is comprised of similar or identical floor plans, built in the same period, simply look at recent sales in your neighbourhood subdivision to give you a good idea of what your home is worth.
If You Live in An Older Neighbourhood - As neighbourhoods change over time each home may be different in minor or substantial ways. Because of this you will probably find that there aren't many homes truly comparable to your own. In this case you may want to consider seeking a Real Estate Agent to help you with the pricing process.
If You Decide to Sell On Your Own - A good way to establish a value is to look at homes that have sold in your neighbourhood within the past 6 months, including those now on the market. This is how prospective buyers will assess the worth of your home. Also a trip to City Hall can provide you with home sale information in its public records, for most communities.
5. Do Some "Home Shopping" Yourself
The best way to learn about your competition and discover what turns buyers off is to check out other open houses. Note floor plans, condition, appearance, lot size, location and other features. Particularly note, not only the asking prices, but also why they are actually selling. Remember, if you're serious about getting your home sold fast, don't price it higher than your neighbour's.
6. When Getting an Appraisal is a Benefit
Sometimes a good appraisal can be a benefit in marketing your home. Getting an appraisal is a good way to let prospective buyers know that your home can be financed. However, an appraisal does cost money, has a limited life, and there's no guarantee you'll like the figure you hear.
7. Tax Assessments - What They Really Mean
Some people think that tax assessments are a way of evaluating a home. The difficulty here is that assessments are based on a number of criteria that may not be related to property values, so they may not necessarily reflect your home's true value.
8. Deciding Upon a Real Estate Agent
Nearly two-thirds of people who sell their own homes say they wouldn't do it again themselves. Primary reasons included setting a price, marketing handicaps, liability concerns, and time constraints. When deciding upon a Real Estate Agent, consider two or three. Be as wary of quotes that are too low as those that are too high.
All Real Estate Agents are not the same! A professional Real Estate Agent knows the market and has information on past sales, current listings, a marketing plan, and will provide their background and references. Evaluate each candidate carefully on the basis of his or her experience, qualifications, enthusiasm and personality. Be sure you choose someone that you trust and feel confident that they will do a good job on your behalf.
If you choose to sell on your own, you can still talk to a Real Estate Agent. Many are more than willing to help do-it-your-selfers with paperwork, contracts, etc. and should problems arise, you now have someone you can readily call upon.
9. Ensure You Have Room to Negotiate
Before settling on your asking price make sure you leave yourself enough room in which to bargain. For example, set your lowest and highest selling price. Then check your priori-ties to know if you'll price high to maximize your profit or price closer to market value if you want sell quickly.
10. Appearances Do Matter - Make them Count!
Appearance is so critical that it would be unwise to ignore this when selling your home. The look and "feel" of your home will generate a greater emotional response than any other factor. Prospective buyers react to what they see, hear, feel, and smell even though you may have priced your home to sell.
11. Invite the Honest Opinions of Others
The biggest mistake you can make at this point is to rely solely on your own judgment. Don't be shy about seeking the honest opinions of others. You need to be objective about your home's good points as well as bad. Fortunately, your Real Estate Agent will be unabashed about discussing what should be done to make your home more marketable.
12. Get it Spic n' Span Clean and Fix Everything, Even If It Seems Insignificant
Scrub, scour, tidy up, straighten, get rid of the clutter, declare war on dust, repair squeaks, the light switch that doesn't work, and the tiny crack in the bathroom mirror because these can be deal-killers and you'll never know what turns buyers off. Remember, you're not just competing with other resale homes, but brand-new ones as well.
13. Allow Prospective Buyers to Visualize Themselves in Your Home
The last thing you want prospective buyers to feel when viewing your home is that they may be intruding into someone's life. Avoid clutter such as too many knick-knacks, etc. Decorate in neutral colors, like white or beige and place a few carefully chosen items to add warmth and character. You can enhance the attractiveness of your home with a well-placed vase of flowers or potpourri in the bathroom. Home-decor magazines are great for tips.
14. Deal Killer Odours - Must Go!
You may not realize but odd smells like traces of food, pets and smoking odours can kill deals quickly. If prospective buyers know you have a dog, or that you smoke, they'll start being aware of odours and seeing stains that may not even exist. Don't leave any clues.
15. Be a Smart Seller - Disclose Everything
Smart sellers are proactive in disclosing all known defects to their buyers in writing. This can reduce liability and prevent law suits later on.
16. It's Better With More Prospects
When you maximize your home's marketability, you will most likely attract more than one prospective buyer. It is much better to have several buyers because they will compete with each other; a single buyer will end up competing with you.
17. Keep Emotions in Check During Negotiations
Let go of the emotion you've invested in your home. Be detached, using a business-like manner in your negotiations. You'll definitely have an advantage over those who get caught up emotionally in the situation.
18. Learn Why Your Buyer is Motivated
The better you know your buyers the better you can use the negotiation process to your advantage. This allows you to control the pace and duration of the process.
As a rule, buyers are looking to purchase the best affordable property for the least amount of money. Knowing what motivates them enables you to negotiate more effectively. For example, does your buyer need to move quickly? Armed with this information you are in a better position to bargain.
19. What the Buyer Can Really Pay
As soon as possible, try to learn the amount of mortgage the buyer is qualified to carry and how much his/her down payment is. If their offer is low, ask their Real Estate Agent about the buyer's ability to pay what your home is worth.
20. When the Buyer Would Like to Close
Quite often, when buyers would "like" to close is when they need to close. Knowledge of their deadlines for completing negotiations again creates a negotiating advantage for you.
21. Never Sign a Deal on Your Next Home Until You Sell Your Current Home
Beware of closing on your new home while you're still making mortgage payments on the old one or you might end up becoming a seller who is eager (even desperate) for the first deal that comes along
22. Moving Out Before You Sell Can Put You at a Disadvantage
It has been proven that it's more difficult to sell a home that is vacant because it becomes forlorn looking, forgotten, no longer an appealing sight. Buyers start getting the message that you have another home and are probably motivated to sell. This could cost you thousands of dollars.
23. Deadlines Create A Serious Disadvantage
Don't try to sell by a certain date. This adds unnecessary pressure and is a serious disadvantage in negotiations.
24. A Low Offer - Don't Take It Personally
Invariably the initial offer is below what both you and the buyer knows he'll pay for your property. Don't be upset; evaluate the offer objectively. Ensure it spells out the offering price, sufficient deposit, amount of down payment, mortgage amount, a closing date and any special requests. This can simply provide a starting point from which you can negotiate.
25. Turn That Low Offer Around
You can counter a low offer or even an offer that's just under your asking price. This lets the buyer know that the first offer isn't seen as being a serious one. Now you'll be negotiating only with buyers with serious offers.
26. Maybe the Buyer's Not Qualified
If you feel an offer is inadequate, now is the time to make sure the buyer is qualified to carry the size of mortgage the deal requires. Inquire how they arrived at their figure, and suggest they compare your price to the prices of homes for sale in your neighbourhood.
27. Ensure the Contract is Complete
To avoid problems, ensure that all terms, costs and responsibilities are spelled out in the contract of sale. It should include such items as the date it was made, names of parties involved, address of property being sold, purchase price, where deposit monies will be held, date for loan approval, date and place of closing, type of deed, including any contingencies that remain to be settled and what personal property is included (or not) in the sale.
28. Resist Deviating From the Contract
For example, if the buyer requests a move-in prior to closing, just say no, that you've been advised against it. Now is not the time to take any chances of the deal falling-through.
"... an 80% recovery at resale is still a 20% loss..."
Whether you're considering remodelling worn-out surroundings, enlarging your home for a growing family or rebelling against yesterday's standards, you have important investment choices to make. You'll want to choose home improvements that not only pay off in recovery of the money you spend, but also help you get a better price for your home when and if you sell it. Keep in mind that, considering today's market, it may be a smarter move to sell and buy again rather than endure a major construction project. After all, even an 80% recovery at resale is still a 20% loss.
Your Reasons for Home Improvement
The first piece of advice is never, ever try and renovate a part of your home, simply for the purpose of selling. You are incurring a huge risk here. The housing market can be volatile, and you never know which amenities are going to pay-off. If you renovate for yourself, you at least know you will get value simply by the enjoyment of the change. Your potential buyer may walk into the improved room, declare they don't like it, and then change it immediately. They won't care if you just sunk $30,000 into it. If you are looking to spruce up your home a little bit, before you sell, just make minor cosmetic changes, like painting. They are fast, inexpensive and there is little risk. If you know that you will be living in a home for some time, but you also know that in the future (perhaps when all of your children move out) you'll be selling it. You should try and balance, which home improvements will pay-off the most, and which ones you would most like to enjoy. For instance, there is little point in renovating the basement, if you never go down there. It's better just to leave it a blank slate for the next homeowner.
The following is a list projecting which home improvement initiatives often produce the best results upon resale value. Naturally these numbers are not rock solid. There are many factors including your local housing market and what kind of improvements you undertake.
- Kitchen Remodel (minor) - 125%
- Basement Remodel - 98%
- Bathroom Addition - 96%
- Kitchen Remodel (major) - 92%
- Bathroom Remodel - 90%
- Exterior Paint - 90%
- Master Bedroom - 86%
So, here you can see that home improvements to kitchens and bathrooms, pay excellent dividends. Not only that but they are often the most enjoyable changes for your everyday living.
Home Improvements with a Low Return:
Generally improvement of attics and basements yield a very low return, unless of course you do something radical. Then the risk is very high, but the return could be enormous. For instance, a tranquility tank is not going to appeal to many people, but if you find a buyer that is all about tranquility, you'll make your money back, and more.
1. Use Good Judgment
When do these improvements you should also use your better judgment in taste. Take a look around your neighbourhood and see what kind of home improvements others have done. You'll want your home to be consistent. Both for conformity, and also because certain improvements are popular with different people, and you'll want to conducted them to match the pulse of your community. You should also keep the original design of your home in mind. Be sure to use similar materials and building styles. A hybrid home of new and old can look daring and artistic, but most homebuyers are very conservative (it is a huge investment) and they may not share your artistic vision. No bold colors, no flamboyant design. Just be tasteful and respectful, and you'll be fine.
Your need comes first. So if you think that your will enjoy a bold flamboyant design go for it. Just try and limit the boldness and flamboyancy to the more cosmetic aspects of the home, i.e., furniture, paint, fixtures. Not windows and cabinets.
To really understand what home improvement is really going to pay-off, take a look at the following variables. They will give you a pretty good idea of what you should be considering when set out to do home improvements.
2. Kind of Improvement
As was mentioned before, kitchen and bathroom home improvements often yield the best pay back. And turning a basement into whatever yields the lowest.
3. Scope of Improvement
Often with home improvement, the small changes often add up to more than the sum of their parts. The larger the scope of the home improvement, the more risk you will incur. That said, risk could turn into a high pay-off. You really have to know who your market is and what they are looking for. The following is a list of small changes you can make, which will make a huge difference:
- Upgrade or add ceiling fans
- Add new doors
- Fresh paint
- Garden Sanded and stained deck and fence
4. Fad = Bad
What is chic today can be the stifled snicker-inducing mistake of tomorrow. Take into account shifting social values. For instance, public space is rapidly dwindling. People, more and more, are looking for space where they can casually entertain. There are no more block parties, no more picnics in the park. Take this into account. Add a deck, it is the new standard for home ownership.
Do not expect that if you put $20,000 into a renovation, you will automatically see $20,000 added to the value of your home. However, even if you only can recoup $10,000 of that, if you are there long enough you easily get $10,000 of use from a new kitchen. You should also think about doing as much of the home improving yourself as you can. Having a hands on approach will give you flexibility, and a new understanding of your home, that you can apply to other home improvement projects. It will also save you lots of cash.
6. New Windows
Not a good resale investment at all. You can tell the buyer that you just added new windows, but that doesn't really matter. Unless you can demonstrate a significant savings on your electricity and heating bill there is really no point. Therefore, replace windows if they need to be, but never just before you are selling your home.
7. Creating New Space
Whether this means taking space that was poorly used before, or adding an addition, it can be a good idea. It is often important to look at design before functionality in this case. If you are improving your basement, don't put in a bar. Instead leave the space open to interpretation. Leave it open, leave it clean. Like blank slate. The same can be said for studies, solariums and offices. Let the buyer decide.
8. To Help You Decide
Some clients are surprised to learn it may be easier to sell and buy again than to endure a major remodelling. Call for up-to-the-minute real estate market information to help you make your decision.
Your House Didn't Sell – Now What?
"... The first thing to do is take a step back and analyze the situation..."
You put your home up for sale and it simply didn't sell. Undoubtedly, this has created a lot of stress, inconvenience and anxiety for you and your family. Perhaps you already bought another home. Maybe you needed this home sold because of a job change. Regardless of the reason, it's certainly a burden! What Should You Do?
The first thing to do is to take a step back and analyze the situation. Try to assess what factors led to your home not selling. Below are the top four reasons why homes tend to languish on the market.
Reason 1: Is The Property Overpriced?
Overpricing your property is usually the number one reason it did not sell. Assuming your neighborhood or area has homes with similar features (number of bedrooms and baths, lot size, etc.) on the market for a lower price, buyers will naturally buy those properties first. The price of your property should be competitively priced with these other homes. That means if you want to sell your home, price the home at or slightly below the comparables. Your real estate agent will help you establish the best price based on the competition. Again, pricing your property above comparable properties can easily cause it to languish.
Another problem with pricing higher than competitive properties is the price reductions. Most homeowners will reduce the price once they realize their home is priced higher than the competition. When your real estate agent enters the price reduction in the MLS® System, the property is probably at or near where it should have been priced in the first place. The problem now is you missed a lot of the buyers the first round that bought comparable homes for the same price you have just reduced your home to.
To overcome this situation, you are going to have to make sure your new, reduced price is extremely competitive. If your price reduction still leaves the asking price of your home higher than any comparables, your home will probably continue to languish. Your real estate agent will help you assess the competition and help you establish an asking price that will get the home sold.
Reason 2: Condition Of The Property
All of the cosmetic things, such as paint, landscaping, window coverings and flooring should be in good shape. The house should be spotlessly clean inside and out! It's amazing how most buyers refuse to see “through” superficial, cosmetic shortcomings. To illustrate this point, most buyers can walk into a “perfect” home that is priced below market. However, if the house is cluttered, the carpet is worn, or the house has a strong pet odor, they move on to look at the next house. And making these cosmetic improvements costs little… mostly your time! To get the house sold, make a small investment in:
Landscaping: Make sure lawn is in good shape and trees and shrubs neat and trimmed. Make sure gutters are clear. If you don't have the time to do it, pay someone.
Exterior of home: Make sure there is no chipping paint, dirty windows, or clutter in the yard. Most importantly, remember that most buyers will notice the condition of the front door when they walk in.
Interior: Make sure the carpets are clean and attractive, the walls painted (if it needs it) and clean (no smudges!), the kitchen clutter-free and the windows are spotless. Also, remove excess furniture (rule of thumb is put half the furniture in storage or the basement). Excess furniture makes rooms appear much smaller. Make sure all clothes are off the floor and organized in closets. And finally, make sure the smell of the home is appealing. Vanilla scent works very well with most buyers.
Reason 3: Was Your Property Aggressively Marketed?
Another primary reason for homes languishing on the market is a simple lack of exposure. In a very hot market, a listing in the Multiple Listing Service alone should generate an adequate number of buyers. However, if your market is anything less than red-hot, the amount of inventory will increase and your home needs aggressive marketing.
Most buyers work with real estate agents. A good real estate agent will make sure your property is exposed to the active real estate agents in your areas by presenting your property to many of the area offices. Also, most active real estate agents have a strong network of other agents, and they're usually on the phone pushing the property to the other agent's buyers.
Make sure your property is advertised in home magazines. Many buyers pull these off the racks of grocery, convenience and drug stores when they are actively looking to buy a home. Most importantly, make sure your property is advertised in heavily trafficked web sites like the MLS® System. Well over 80% of buyers use the Internet to look for homes!
Reason 4: Finally, and Most Importantly, Did You Hire The “Right” Real Estate Agent?
Like any profession, there are very effective and ineffective agents. Many agents work hard and employ strong marketing techniques. Many agents have a strong network and access to buyers. Many agents work hard to get your home sold. However, many do not. Did your agent simply place the house in the MLS® System? Or, did she or he inform their network of buyers about your property? How about presenting your property at sales meetings both at her or his office and other company offices? Did she or he promote your property at the local real estate board meeting, where many agents gather to share inventory? Did she or he use aggressive advertising, including real estate magazines and heavily trafficked Internet web sites?
Ask yourself, was your agent passionate about selling your property? If not, now is the time to find the agent who will get your home sold.
How to Sell Your Home Yourself
If you ask anyone who has ever tried to sell their home themselves, they'll tell you that from the moment the "For Sale by Owner" sign goes up, the phone begins to ring. Unfortunately, many of those calls will not be from prospective buyers but rather from real estate agents looking to obtain your listing.
Obviously the idea of not having to pay a commission to a real estate agent is attractive to any home seller. But because of all the issues involved in the process, selling a home on one's own can be as challenging as many home sellers will attest to. The key is to be properly prepared. If you are not, your home could remain on the market longer than you expect because you are not attracting and getting offers from qualified buyers. This can be the point where many homeowners become frustrated and consider giving up their dream of selling their home themselves.
However, there are sellers who successfully accomplish selling their own homes. You can be one of them. This industry report has been especially prepared to assist home sellers, such as yourself, understand the elements involved so you, on your own, can sell your home quickly for the most amount of profit.
To help you prepare, here are 10 inside tips that you should be aware of before you make the decision as to whether or not this is the right approach for you.
1. Price it Right
Correctly setting your asking price is critical. Setting your price too high can be as costly as setting it too low. Home prices are determined by fluctuations in the marketplace, not by your emotional attachment or by what you feel your home is worth. In order to establish a realistic price for your home, objectively compare the price, features and condition of all similar homes in both your neighbourhood and other similar ones that have sold in recent months. It is also important for you to be familiar with the terms of each potential sale. Terms are often as important as price in today's market. Carefully budget your selling costs and prepare a net proceeds sheet to calculate your best estimate of what you will take away from your home sale. Prospective buyers may also request this kind of analysis of buying costs.
2. Prepare your Home for Sale
First impression is crucial. Make sure your home makes a positive statement by carefully inspecting all details and viewing it through the objective eyes of a buyer. Don't gloss over needed repairs and fix-ups, as your prospective buyers won't. Your job is to ensure that your home stands out favourably from the competition.
3. Prepare Yourself with all Necessary Legal Documentation
Not surprisingly, there are many important legal contracts and documents that you must assemble, complete and understand. A partial checklist of forms that you will require for prospective buyers and for legal documentation is as follows:
- Seller's Disclosure
- Buyer's Advisory
- Purchase Contract
- Preliminary Title Report
- Termite Inspection
- Mortgage Payoff
- HOA Disclosures & Restrictions
- Loan Application Forms
- Lead Based Paint Disclosures
- Property Profile Fact Sheet
- Buyer's Cost Sheet
- Home Warranty Order Forms
- Personal Property Exclusion List
- Property Survey (if applicable)
- Home Inspection Order Forms
4. Market Your Home Effectively
Beyond the sign you will put on your lawn, you should find effective ways to spread the word about your home. Local buyers can be reached through the newspaper, but this is only a small part of the market you are after. Be sure you include the many buyers who could already be working with a Real Estate Agent. To locate them, target as many top agents as possible in your market to see if the criteria of their buyers match those of your home.
Because out-of town buyers are also important targets, you should create a strategy to reach these people as well. Above all, you should be very service-minded and make it easy for pre-qualified buyers to view your home. Ensure there is always someone available to answer the phone, check messages frequently, and be ready to give qualified prospects a tour of your home as soon as possible.
5. Remain Objective During a Showing of Your Home
Keep emotion out of the sale of your home, and the best way to do this during a showing is to remain physically in the background. If a prospective buyer says something negative about your home, it is better to counter-balance this point of view by illustrating the positives rather than becoming defensive.
6. Pre-Qualify Your Prospects
Don't waste your time entertaining buyers who could never afford your home. Research their financial steadiness with respect to job security, salary, debts, liabilities and credit standing.
7. Negotiate Effectively & Knowledgeably
There will be many details to resolve before a sale can be considered final: price, terms, inspections, possession date, buyer concerns and objections. Make sure you fully understand the contract you have drawn up so you can in turn explain details and ramifications to the buyer and make any amendments to the sale that are necessary. The contract you use should be thoroughly examined by your real estate attorney. Some real estate brokers may be willing to help you do this. While this is going on, manage the buyer's interest in your home so that it doesn't wane during negotiations.
8. Know Your Buyer
Your objectives during negotiations are to control the pace and set the duration. Try to determine what your buyer's motivation is. Does he or she need to move quickly? Do they have enough money to pay your asking price? Knowing this information will give you the advantage in the negotiation because you will know up front what you will need to do in order to get what you want.
9. Don't Move Out Before You Sell
Studies have shown that it is more difficult to sell a home that is vacant. It looks forlorn, forgotten, simply not appealing. It could even cost you money. If you move, you're also telling buyers that you have a new home and are motivated to sell fast which can, of course, gives them an advantage at the negotiating table.
10. Know Why You're Selling and Keep it to Yourself
The flip side of “understanding your buyer” is to “understand yourself”. Your reasons for selling will affect everything from your list price to how much time and money you will invest in getting your home ready for sale. Your motivation will help you determine what is more important to you: the money you walk away with, the length of time your property is on the market, or both. Different goals will dictate different strategies. As someone who wants to sell without a real estate agent in an effort to save the commission, it is likely that money is one of your primary considerations (see inset box below). Whatever your reasons, however, it is very important to keep them to yourself so as not to place yourself at a disadvantage at the negotiation table. When asked, simply say your housing needs have changed.
11. How to Assess Your Net Gain
To analyze whether or not you will end up ahead by choosing to sell on your own, consider the fact that most buyers do use a real estate agent because it doesn't cost them anything for this service (i.e. the seller pays the agent's fee). Be cautious as buyers, investors and speculators who seek out For Sale by
Owners are typically those in search of a bargain. The low-ball offers from these types of buyers will often net you much lower in the long run. What you will have to judge for yourself is the following:
- Be as prepared as possible with your marketing, negotiations, evaluations, showings and all legalities.
- Consider what it will cost you to effectively market your home and assemble all necessary materials from the “for sale” sign to any contracts?
- What price will a buyer offer you as a For Sale by Owner minus the costs identified in point 2 above. Is this net price higher than the price an experienced agent could net for you minus his/her commission?
Why It Is So Important That Your Home Is Correctly Priced and Marketed Properly
"... Your home is your castle--even when it's for sale..."
Let's say your terms are competitive: your timing's clearly set. Now, what about your asking price? Without question, price is your most important sales tool. Here's why:
The period of best opportunity for selling a home at a reasonable price is the first four weeks after it is put on the market. Buyers who have seen most available listings are waiting for just the right house to come on the market. If your house is priced right from the beginning, you are in the best position to attract the maximum number of buyers able to pay the price your home is worth - and to sell your home within your timetable.
If your house is under priced, you may be swamped with lookers and perhaps get many offers. But you could lose thousands on one of your family's largest investments.
If your house is overpriced, lookers are apt to be few and far between, with little chance of any offers to pay your unrealistic price. You may lower your price later, but by that time you will have missed many of the most interested buyers.
1. How do you Set the Right Price?
Arriving at an asking price involves up-to-the-minute research and experienced judgment. Besides enlisting my help in checking out the current real estate market conditions and financing trends, the basic steps include:
Measuring your home against similar neighborhood homes that have recently been sold or are currently on the market.
Determine what features make your house stand out among others currently on the market. After all, buyers are comparison shoppers. Weighing the spending of a reasonable amount of money on cosmetic fix-ups that might enhance the marketability of your house and earn the highest possible sale price.
The right price is usually within 5% of market value (a constantly changing factor) and usually results in a fair-dollar sale within a reasonable amount of time. As we say, "price sells."
2. Why is overpricing risky?
A price more than 5% over market value may have these results:
- Buyers may resist inspecting your home because they can find better values elsewhere. (Overpriced houses tend to sell the competition first.)
- Potential buyers who can't afford the price don't bother to look--or to make offers.
- A buyer willing to pay an over market price may have difficulty getting financing. Lenders may not approve a loan if the appraisal is lower than the contract price. (The delay from a failed sale can mean missing out on the critical first 30-day marketing period.)
- Your unsold home will begin to get "stale," as the marketplace assumes there is "something wrong" with the house.
- To make up for lost time you might be inclined to lower the price below competing houses in order to move it.
3. Is it Ever Smart to Under Price?
Setting a price below market value usually isn't preferable because you may be losing money. If time is more important than money and you need a faster-than-average sale, you may consider setting a bargain price to attract the greatest number of prospects. Market value delivers the optimum number of prospects at the best price for a quick sale.
When you're ready to sell your home, take advantage of my real estate expertise to help you price your home to sell.
4. How a Market Analysis Helps Price it Right
Only a professional market analysis can give you the accurate, reliable foundation you need to price your home right. When you ask me to make a fair-market analysis of your home, here is what I do:
- Evaluate your home's location and lot size; your home's age, size and condition; the number of bedrooms, baths, total rooms; the kinds of extra feature you have (such as improvements, built-ins, garage, tool shed, spa).
- Examine the condition and appearance of your homes exterior and interior. I can help you determine what repairs or refurbishing may be needed to sell your home at its best price.
- Review the assessed value of your home, its previous sale prices, your maintenance and utility costs and your local taxes.
- Compare your home with similar area properties currently for sale or recently sold.
- Note current real estate market conditions with a practiced eye; also current interests rates and lenders' criteria.
Passing the Home Inspection – What Buyers Are Looking For
When you put your home up for sale you place it directly under the scrutiny of buyers. Superficial changes, such as new paint and resurfaced floors can do a lot to enhance your home's appeal, but when it comes to an offer, most serious buyers will seek the assistance of a professional home inspector to ensure that the house is sound beneath the surface.
During most home inspections there are over forty problem areas that will be examined for correct function and condition. It is important that you are aware of what areas buyers will examine, and what you can do to ensure that these are in proper working order. In most cases you'll be able to conduct a reasonable inspection yourself, if you know what to look for. This report will elaborate on some of the more important home inspection points, and will include information on:
- Home Inspection areas and what to look for
- How to make sure your home is as good beneath the surface as it is above
1. Home Inspection
Selling your home can be a difficult job, especially since you're competing against hundreds of other properties. It's important that you ensure that your home is in top condition, and doing a pre-inspection in anticipation of buyers doing the same is extremely important. Below are some areas that you should inspect:
Plumbing is of high priority when it comes to home inspections. Defective plumbing is classified in three ways namely leaking, clogging, and corrosion. A visual inspection will detect leaks and corrosion on pipes. Turning on all faucets in the highest bathroom and then flushing the toilet can gauge water pressure. The sound of water flowing through your pipes often indicates that the pipes are undersized. Additionally, if water coming from the pipes is dirty or contains debris, then the pipes are most likely rusting. The home inspector will evaluate all of these.
3. Damp or Wet Basement
The basement or crawl space is often the most revealing area in the building and usually provides a general picture of how the building works.
An inspector will check your walls for a powdery white mineral deposit a few inches off the floor, and will look to see if things you store right on your basement floor have suffered any moisture-related damage. Mildew odours are also a red flag for home inspectors. Difficult to eliminate, and indicative of other problems, an inspector will certainly be conscious of them.
Depending on severity and location it could cost you between $400 and $1,100 to seal a crack in your basement foundation. Another option is to add a sump pump and pit, which could cost around $750-$1,000. Finally complete waterproofing of an average 3-bedroom home could cost between $5,000 and $15,000. It's important to factor these costs into the calculation of what you want to net on the sale of you home.
4. Damp Attic Spaces
Just as detrimental to a home seller as basement dampness are mould and mildew problems in the attic. Improper ventilation, insulation and vapour barriers can cause water and moisture to accumulate in the attic. This moisture and associated mould and mildew can lead to premature wear of the roof, structure and building materials. Oftentimes costs associated with fixing this damage can be in excess of $2,500.
5. Roofing Problems
The major problem associated with roofing problems is leakage, which can occur for a variety of reasons. Physical deterioration of asphalt shingles, mechanical damage from a windstorm or ice build-up as a result of poor drainage are all common causes of roofing issues. Leaky gutters and downspouts can also damage siding and exterior walls. Remember that it is only a matter of time before external damage becomes an internal problem.
6. Rotting Wood
Rotting wood, an issue particularly prevalent in older homes, can occur in many places such as door or window frames, trim, siding, decks and fences. Building inspectors will oftentimes probe the wood to check its integrity – and are particularly sceptical of woodwork that has been freshly painted.
7. Masonry Work
Brickwork commonly succumbs to water damage, minor ground and foundation settling and a host of other time-related changes. Redoing brickwork can be expensive, but when left unattended can sag, warp or even collapse. It's particularly important to inspect your chimney for signs of moisture damage and structural integrity as problems in this area can lead to falling bricks and collapsing roof stacks.
8. Inadequate Wiring and Electrical Systems
Inadequate wiring can occur in many forms. Home inspectors will look at octopus plugs and extension cables as indications of inadequate circuits and potential fire hazards. Also your home should have a minimum of 100 amps service, and this should be clearly marked. All wiring should be copper or aluminium.
9. Unsafe or Over Fused Electrical Circuits
Unsafe electrical conditions are created when more amperage is drawn from a circuit than is intended. 15 Amp circuits are the most common in typical homes, although larger circuits are used for appliances such as stoves and dryers.
Older homes will also contain fuse panels rather than circuit breakers. Replacing a fuse panel with a circuit panel can often cost hundreds of dollars, but will be a factor that the home inspector will examine.
10. Poor Heating and Cooling Systems
A home inspector will scrutinize heating and cooling systems for efficiency and performance.
Insufficient insulation, and an inadequate or poorly functioning heating system, are the most common causes of poor heating. A home inspector will check the age of your furnace to see if it exceeds the typical life span of 15-25 years. Additionally, in a forced air gas system, the inspector will place the heat exchanger under particular scrutiny examining for cracks and damage as a potential source of carbon monoxide in your home. If the heat exchanger is damaged it must be replaced as it cannot be repaired.
Cooling systems are of equal importance. A home inspector will examine your air conditioning unit to evaluate size, installation, noisiness, dehumidification and cooling ability. A home inspector will pay particular attention to the exterior compressor/condenser units to make sure they are free of debris and have sufficient room in which to operate.
11. Adequate Security Features
A home inspector will examine your home for proper locks on windows and patio doors, dead bolts on the doors, smoke and even carbon monoxide detectors in every bedroom and on every level. Installing these components can add to your costs, but will demonstrate an adherence to basic security standards in your home. A purchased security system will also be examined.
12. Structural/Foundation Problems
An inspector will most definitely examine the underlying footing and foundation of your home. A cracked foundation or unstable footing can cost thousands in your home's value.
When Smaller is Sweeter - How to Take the Money and Run
Your house is quiet except for the hum of the refrigerator or the voices from the TV. The rooms are filled with pictures and memories, but the children have grown and gone. You spend hours each week cleaning rooms you never use. Are you an “empty nester” who needs a house for the future? Is it time to downsize or to move into another home more suitable for your retirement years? Here are some tell tale signs:
Your current home is too large for your lifestyle. Rather than close off the extra rooms or rent out the excess space, you may opt to move to a smaller home.
You are retired and your income is lower than it was during your prime working years. You may want or need to sell your current hoe and move to one with a smaller mortgage payment or less upkeep. Maybe you could live more comfortably in a lower cost-of-living area. If you have loaded up a home equity loan, selling the home could give you welcome cash to eliminate those payments.
As you approach your golden years, your wish is to have a home with hew, if any, stairs, or one which could easily converted to be handicap-accessible if the need arises.
You prefer a location where the weather is more to your year-round liking and where there are activities you like – golf, tennis, boating, or socializing with seniors – during your leisure time.
There is no capital gains tax on the sale of your principal residence. The profit on the sale of your home is tax free, which can provide you with an additional nest egg amount to use for your pleasure and leisure.
Getting it Sold
Once you have decided to sell and move, take a critical look at your current home. Even the best-maintained homes begin to show age.
Before you list your home for sale, be sure it's in “move-in” condition. Make needed repairs and replacements so the house will show at its best.
Remember, homes that sell fastest and for top dollar show like a model home and are merchandised like a model, too. How does your home compare with other homes for sale, including new homes? Do you want to undergo major renovations, or would you prefer to make price concessions to help your home compete?
Here are some specific questions to ask yourself:
- Are kitchen appliances up to date and in good working order? Does the kitchen have popular features like a microwave, or and island?
- Up-to-date homes often have a master bedroom suite. Does yours? Does the master bathroom have a spa or soaking tub or dual-shower heads?
- Do you have a home office? Is telephone wiring adequate to support an office phone, computer modem, fax machine?
- Have you built any additions – a deck, patio, carport, sunroom – without first obtaining a building permit or without passing inspection?
- Do carpets and tile need to be replaced? Will a professional cleaning make them look like new?
- What do the walls look like? Do they suffer from puppy-bite or kitty-scratch? Should old, tired wallpaper be removed? Do walls and woodwork need repainting?
- Can you make closets and counters look larger? Are there items you can pack away and do without until after you move?
- Are shrubs and trees neat and does the yard look well kept and attractive?
- How does your home compare to others currently for sale now? What can you do to make it say, “Buy me!”
Price is one answer. If you've owned your hoe for years, chances are good you've got some serious equity. Perhaps you can afford to be flexible on price in order to get it sold. After all, to get the best possible sale today, a house must be in tip-top condition in every way: price, condition, terms and exposure. That's where we come in. Give us a call.
How You Know it's Time to Move
Reason #10: When you first bought the house, you were out in the country, but now that same house is part of the city scene.
Reason #9: You can't get anything repaired because "they stopped making those parts years ago."
Reason #8: The swing set out in the backyard has grown roots.
Reason #7: The plumber's phone number is on your speed dial.
Reason #6: You're on a first-name basis with the handyman.
Reason #5: The children's rooms have all been turned into guest bedrooms.
Reason #4: The newspaper lining the guest room dresser is dated July 4th, 1976.
Reason #3: You have to move the furniture to see the carpet's original colour.
Reason #2: You can't do anything to the exterior of your home without getting approval from the "Board of Historic Places".
Reason #1: You haven't visited half the house in the last six months.