Elleston’s Guide to Selling Your Home!
For most families, their home is their largest financial asset, and deciding to sell it is a big decision that involves a lot of preparation and work. When you’re ready to sell it’s important to have an experienced real estate professional handle the details involved in the successful sale of a home for top dollar.
As an experienced professional who has helped many Las Vegas residents sell their homes, I know how to handle every aspect of the sales process – from strategically marketing and showcasing your home to making sure everything’s signed, sealed and delivered by the closing date.
The Basics of Marketing Your Home
Your REALTOR®’s marketing efforts and considerations will include advertising, showing the property, how long the house has been on the market and whether you’re buying another home. Your home should be listed, whenever possible, through a Multiple Listing Service (MLS).
Advertising and Promotion
Properties are commonly advertised through real estate agent Web sites, Internet home search/listing services, classified advertising and real estate guides. Promotion efforts through office and MLS tours are a good way of getting other buyer agents to view your home and to promote it to the buyers they are working with.
Even with all these advertising avenues, ” For Sale” signs on front lawns are still remarkably effective. Many REALTORS® promote their Web sites on the sign and use brochure boxes with the signs to market the property. When appropriate, and with your permission, your REALTOR® may send a mailing about your property to neighbors. Sometimes one of them has a friend or relative who always wanted to live near them. You never know how far reaching the benefits of word-of-mouth advertising by friends, relatives and neighbors can be.
Showings and Open Houses
To prepare your home for viewing, make it as bright, clean, cheerful and serene as possible. Always look at your home from the buyer’s point of view. Your REALTOR® will probably find a tactful way to suggest that you be absent while the house is being shown to prospective buyers, because your presence will inhibit their actions and conversations. They won’t feel free to open closets and cabinets, test out the plumbing and discuss their observations objectively as they walk through the house. It goes without saying that your children and pets should not be on the premises either.
If your REALTOR® has scheduled an open house, you may want to notify the neighbors, and assure them that they’ll be welcome. They’ll jump at the chance to poke around in your house, and sometimes they can turn up a buyer among their friends.
Quick tips for showings and open houses:
- Clean or replace dirty or worn carpets.
- Open all curtains and blinds.
- Replace any burned out light bulbs and turn on all lights.
- Clear all clutter.
- Clear all countertops.
- Wash and put away any dirty dishes.
- Set the dining room or kitchen table if you have particularly nice linen or china.
- Simmer a few drops of vanilla on the stove.
- Put on soft music.
- Burn wood in the fireplace on cold days, otherwise, clean the fireplace.
- Put fresh towels in the bathroom.
- Take any laundry out of the washer and dryer.
- Leave the house so your REALTOR® is free to deal with prospective buyers in a professional manner.
- Put pets in cages or take them to a neighbor.
How Long Has Your House Been on the Market?
Professional appraisers sum up their entire body of knowledge in three words: ” Buyers Make Value.” Your home is worth as much as a buyer will pay for it.
If your home has been on the market for months, it’s a clear message that the property may not be worth what you’re asking for it. This is particularly true if there haven’t been many prospects coming to see it. What you do at that point depends on whether you really need to sell, and whether you’re working with a time limit.
If you’re not really motivated to move soon, you can always wait – years if necessary – and hope inflation will catch up with the price you want. The problem is that in that time, your home begins to feel shopworn. Buyers become suspicious of a house that’s been for sale for a long time.
If you really do need to sell, with your REALTOR® discuss a schedule for gradually dropping your price until you find a level that attracts buyers. There’s no point in saying, “We simply can’t sell our house.” Anything will sell if the price is right.
If You’re Buying Another Home
You may wonder what will happen when you’re selling one home and buying another – how will all the details work out? This is a common situation and REALTORS®, lawyers, and title and escrow companies have plenty of experience in arranging contracts and loans so that the two transactions dovetail smoothly.
And should you sell your home first then buy or buy first then sell? Ideally, it’s best to find a home you like and make an offer subject to selling your current home. This generally works in a normal market. However, in a “hot” market most sellers will not accept a “subject to sale” offer. In this case you need to sell your home first and then buy a new home in the interim period between selling and vacating your house.
If you find that you need to buy the next house before you’ve received the proceeds from the present one, lending institutions can sometimes make you a short-term ” bridge” loan to tide you over between the two transactions. Make sure you fully understand the exposure and emotional investment before proceeding with this type of loan.
How to Set a List Price for Your Home
Setting the list price for your home involves evaluating various market conditions and financial factors. During this phase of the home selling process, your REALTOR® will help you set your list price based on:
- pricing considerations
- comparable sales
- market conditions
- offering incentives
- estimated net proceeds
Pricing Considerations – Find a Balance Between Too High and Too Low
When setting a list price for your home, you should be aware of a buyer’s frame of mind. Consider the following pricing factors:
If you set the price too high, your house won’t be picked for viewing, even though it may be much nicer than other homes on the street. You may have told your REALTOR® to “Bring me any offer. Frankly, I’d take less.” But compared to other houses for sale, your home simply looks too expensive to be considered.
If you price too low, you’ll short-change yourself. Your house will sell promptly, yes, but you may make less on the sale than if you had set a higher price and waited for a buyer who was willing to pay it.
TIP: Never say “asking” price, which implies you don’t expect to get it.
Price Against Comparable Sales in Your Neighborhood
No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market.
Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood. Your REALTOR® can furnish data on sales figures for those comparable sales and analyze them to help you come up with a suggested listing price. The decision about how much to ask, though, is always yours.
Competitive Market Analysis (CMA): The list of comparable sales a REALTOR® brings to you, along with data about other houses in your neighborhood that are presently on the market, is used for a “Comparative Market Analysis” (CMA). To help in estimating a possible sales price for your house, the analysis will also include data on nearby houses that failed to sell in the past few months, along with their list prices.
A CMA differs from a formal appraisal in several ways. One major difference is that an appraisal will be based only on past sales. Also, an appraisal is done for a fee while the CMA is provided by your REALTOR® and may include properties currently listed for sale and those currently pending sale. For the average home sale, a CMA probably gives enough information to help you set a proper price.
Formal Written Appraisal: A formal written appraisal (which may cost a few hundred dollars) can be useful if you have unique property, if there hasn’t been much activity in your area recently, if co-owners disagree about price or if there is any other circumstance that makes it difficult to put a value on your home.
TIP: If you do order a market value appraisal, make it clear you don’t need an elaborate, or full narrative report, i.e., the kind that’s complete with photos of the house and neighborhood. Floor plans and a site map is sufficient in most cases.
Market Conditions – Is it a Buyer’s Market or a Seller’s Market?
A CMA often includes a Days on the Market (DOM) value for each comparable house sold. When real estate is booming and prices are rising, houses may sell in a few days. Conversely, when the market slows down, average DOM can run into many months.
Your REALTOR® can tell you whether your area is currently in a buyer’s market or a seller’s market. In a seller’s market, you can price a bit beyond what you really expect, just to see what the reaction will be. In a buyer’s market, if you really need to sell promptly, offer an attractive bargain price.
If You Price High, Set a Schedule for Lowering the Price
Some sellers list at the rock-bottom price they’d really take, because they hate bargaining. Others add on thousands to the estimated market value “just to see what happens.” If you want to try that, and if you have the luxury of enough time to feel out the market, sit down with your REALTOR® and work out an advance schedule for lowering the price if need be.
If there haven’t been many prospects viewing your home after three weeks, you may need to lower your list price. If that doesn’t bring any prospective buyers, you may need to lower your list price again. Plan on doing that regularly until you find a level that attracts buyers. Make a written schedule in advance, before emotion takes over and you’re tempted to dig your heels in.
Offering Incentives to Hasten a Sale
Sometimes cash incentives are as effective as lowering the price, especially in the lower price range where buyers may be “cash poor.” You may offer to pay some or all of a buyer’s closing costs and discount points required by the buyer’s lending institution.
If you haven’t had much traffic through your house and you’re in a hurry to sell, you may want to add the offer of a bonus to the selling broker, in addition to their commission. An example of the wording for such an offer may be “to the broker who brings a successful offer before Christmas.”
Estimating Net Proceeds
Once you’ve been given an estimate of market value by your REALTOR®, you can get a rough idea of how much cash you might walk away with when the sale is completed. This can be particularly useful when you start looking for another home to buy.
To estimate your net proceeds, from the estimated sales amount, subtract the applicable costs in the three sections outlined below: seller’s costs, buyer’s/seller’s costs and closing costs.
Seller’s Costs: Subtract the following costs as applicable.
- payoff figure on your present loan(s)
- broker’s commission
- prepayment penalty on your mortgage
- attorney’s fees
- unpaid property taxes
Buyer’s/Seller’s Costs: Additionally, your REALTOR® can tell you whether local customs or rules dictate whether the buyer or seller pays for the items listed below. Subtract the following costs, as applicable.
- title insurance premium
- transfer taxes
- survey fees
- inspections and repairs for termites, etc.
- recording fees
- Homeowner Association transfer fees and document preparation
- home protection plan
- natural hazard disclosure report
Closing Costs: As far as closing costs are concerned, you and your eventual buyer may agree on any arrangement that suits you, no matter what local practice dictates. Your REALTOR® will assist you in estimating what your final closing costs will be.
WANNA LEARN MORE ABOUT SELLING? Check out my “Quick Tips.” Please Click on the Link to view my posts on the following: