Getting Your Home Ready to Sell
If you are putting your home on the market, your main goal will be to appeal to as many buyers as possible. The housing market is competitive and you will want your home to look as good as, if not better than, your competition. I always use display homes as an example. Builders devote all of their energy into ensuring their home shows perfectly and the following suggestions are some that you will see in a display home. You will want to have all improvements done before going on the market as you will never have a second chance to make a first impression.
Here is a list of cost-effective ways to maximize the profit from your home sale:
1. Declutter – You will want to declutter as much as possible. Your home should look cozy, but not empty so you don’t want to go overboard. Make sure everything is picked up off of the floor, the bathroom vanities should be somewhat cleared, closets, basements, and garage can be filled but should be organized.
2. Neutralize – If you have loud colors or wallpaper, you will want to replace with a soft, neutral beige. When many people hear the word neutral, they decide to go white or eggshell and that tends to have a very stark and sterile effect. You will want soft and warm colors. We can provide you with paint color suggestions that are at Lowe’s or Home Depot.
3. Carpeting – Carpeting is one of the few expenses that are justified when selling a home. If you have either a colored carpet, different colored carpets in bedrooms, or very worn carpeting; you will want to replace before going on market. St. Louis Realty can provide you with an inexpensive company that will finance free of charge for 6 months. Carpeting can either completely discourage a sale or bring low offers. It is well worth having it replaced if needed. If your carpeting is dirty, it should be professionally cleaned before going on the market.
4. Clean – Make sure home is extremely clean. Once again, think of a display home when cleaning. Is the grout in the bathroom dirty? Baseboards? Windows? When the home is shown, everything should be off the floors, sink should be dish free, and all beds made.
5. Odors – If you are a smoker, DO NOT smoke in your house (or garage). I cannot stress how important this is. A non-smoker will seldom (if ever) purchase a home that has the presence of smoke. Your agent should let you know if there is a presence of pet odor and usually this can be taken care of with a good carpet cleaning.
6. Yard- All bushes should be trimmed and well manicured. Grass should always be cut. If in warmer months, a fresh coat of mulch and annuals always help the appearance.
7. Exterior of Home – Broken screens should be replaced. Check to make sure the front door does not need a new coat of paint or new hardware. If siding has mildew, it should be power washed.
8. Depersonalize – You do not have to take down all of your family photos but instead minimize anything that is specific to you. If you are a hunter, remove any mountings (deer, etc.) from walls. If you have any religious statues or items, especially if you have a room devoted to your religion, you will want to remove everything while on the market.
Now that you are planning on selling, the buyer needs to get a sense that it is his/her home and not someone else’s. Depersonalize as much as possible.
9. Miscellaneous – Make sure all light bulbs are working. Check ceilings for any signs of water stains or cracks and fix if necessary. Fix any leaky faucets. Cracked windows should be replaced.
Finally, take a final walk through your home as if you are a buyer. Take note and fix anything you see that would be of concern if you were a buyer. Once finished you are ready for market!
Pricing Your Home
The single most important factor when listing your home is the asking price. Here are a few key tips when pricing:
Abandon your personal point of view
How much will a ready, willing, and able buyer pay for your home? It is not important to a buyer how much you paid for the home, how much money you need for the down payment on your next home, or how much it will take to get you out of debt.. The only concern a buyer has is whether or not your home is at a fair price for the neighborhood and features.
Consider market conditions
Are home prices in your area moving upwards or downwards? Are homes selling quickly or languishing? Will your home be on the market in the spring or in the dead of winter? Are interest rates attractive? Is the economy hot or cold? The answers to these questions should be considered when pricing your home.
Desirability
Is there: Steep driveway? Small yard? Sloping yard backing to a busy street? Small master bedroom? No garage? Undesirable location? Small square footage? These are all examples of factors to take into consideration when pricing. If your home has undesirable features that cannot be changed, the only thing that can be changed is the pricing. When selling your home, you always have to consider the competition. If someone can get a 3 bedroom ranch that backs to common ground for the same price as a 3 bedroom ranch that backs to a busy street, they will always pick the one that is more appealing. In order to sell your home, it has to be the most appealing home in your price range.
Find a minimum of 3 comparable properties
Your Realtor should provide you with a comparative market analysis (CMA), which shows the prices of comparable homes. Comparables consist of close or same square feet, close or same style, and close or same number of bedrooms and baths. Pricing your home correctly based on comparables will provide you with the highest possible price for your home. Your agent's main goal will be to price your home so that you walk away with the highest selling price possible without overpricing and eventually getting less than you should.
What if I price my property too high?
Overpricing your home can be disastrous. The first two weeks a home is on the market are generally the most active as well as the most promising for getting top dollar. Studies prove that if you are priced too high, your home will stay on the market no matter how much exposure and advertising it gets. Agents can track how long a property has been on the market and as the days on market accumulate the perceived value of your home declines. The most common pricing mistake made is overpricing.
Listing your home
Now that your home shows beautifully, you are ready to list! When your agent meets with you, they will do a walk through to write down all of the features your home has to offer. It is always helpful to make a list beforehand of all of the updates and major improvements you have done to your home such as new HVAC, new roof, new flooring etc. A good rule of thumb for categorizing a MAJOR improvement is anything you have done within the last 5 years that exceeded $3000 in cost.
After your walk through, you will sit down with your agent to fill out paperwork. The paperwork may vary slightly with different companies and there may also be specific disclosures based upon the city you are located in.
However, the two standard forms every company in Missouri will provide are a listing contract and a seller’s disclosure. The listing contract is a pre-written form with only a few blank areas to be filled in. The blank spaces include: your name and address, the price you will be asking for your home, the amount of commission charged by the agency, and how much they will be paying out for an agent to find a buyer. Also included is the time frame for the listing agreement and any minimal payments required by the agency. (St. Louis Realty does not ask for a minimum payment. If we do not sell your home, we do not charge you). The listing form also states exactly how you will be represented by your agent.
The seller’s disclosure is also a standard form that should be filled out if you have lived in the property. The seller’s disclosure will ask you questions regarding the condition of your home. It is extremely important that you are honest when filling out the seller’s disclosure as it is a legal document and the buyer will usually have a building inspection and find out any and all issues anyway. The exact verbiage in a seller’s disclosure is “that it is complete and accurate to the best of the seller’s knowledge”. Obviously you are not going to know if there is a chipped shingle on top of your roof if you have never been on your roof, but anything you do know, you must disclose.
What to expect when you are on the market
Your agent should provide you with a sign and feature sheet box for your yard. You should also receive a sign-in sheet along with flyers to keep inside for agents as they walk through your home. There will be a lockbox on your door for agents to show your home. Most agents now use “Supra” boxes because they ensure the security of the homeowner. These boxes ensure authorized access. Licensed agents can purchase an electronic key to open the boxes. Once the key is placed inside of the Supra, it stores the name of the agent, the company they work for, and the time they opened the box to get the key. The Supra boxes can be programmed to shut off during the evening hours as an added security feature.
Our showings are set up through a showing service that will call to inform you when there is an appointment scheduled. This can be set up two ways. The first is a confirmed appointment, in which case they will call all of your registered numbers to reach you and leave messages. They will not give permission for your home to be shown until you have been contacted and confirm the showing is approved. We can also set this up as a “Call & Show” which means they will call and leave a message as to what time your home is going to be shown. The agent is then told to show the home. Unless you call back and tell them otherwise, the agent will be there at the scheduled time.
Your agent should provide feedback from your showings at least once a week. They should also keep you informed of changes in the status of homes you are in competition with. For example, if a competitive home has had a price reduction or has gone under contract, your agent should notify you of this. You will always want to be the most appealing home on the market with either better features or better price. You can only make informed decisions on pricing changes if you know exactly what the market changes have been.
*Note: Remember to have your home “show ready” everyday you are on the market. It can be difficult to ensure the home is in perfect condition on a daily basis but it will help your chances of selling quicker.
You have a Contract!
Now it is time to put your negotiation skills to work! There are a few key facts to remember:
If the first offer comes too quickly, many sellers are likely not to be as negotiable. The thought process is usually “look how quickly we received a contract! We can probably get anything we want for this house because it is obviously a sought-after home.” This is usually not the case. There are always homebuyers that have not found their perfect home and are looking on a weekly basis. When you go on the market, all of the buyers in your market that have not found a home to buy will come to see the new home on the market along with anyone that just decided to start looking. Once the first couple of weeks have gone by, everyone has been through your home and the only showings you will get will be the new people that just started looking. Even if the first offer did not come in as high as expected, the first offer is almost always the best offer you will ever get. I have seen numerous clients walk away from deals thinking something better will come along further down the road. Most often, these clients end up taking $5,000 - $10,000 less because they cannot get a better offer.
There seems to be 3 kinds of negotiators. The first has a definite price in mind and will not negotiate a penny less. They try to play hardball (only to lose the contract 99% of the time) and once again end up taking much less down the road. The second wants to give their home away at any cost so as not to have to keep up with the showings and stress associated with selling. They can get exhausted of a home sale within two weeks of being on the market and when they get a low offer they want to jump on it just to get it over with. These are the two most unfortunate types of negotiators and if they do not have a quality agent guiding them through the process, they will surely lose money. The third type of negotiator meets the buyer in the middle. The process is give and take until an agreement is made. This is the best type of negotiation possible to ensure you receive the highest possible dollar amount for your home!
Inspections and Sellers Responsibilities
One of the first questions many sellers ask is “When will I know for sure that we are closing?” The short answer is “Once we have all left the closing table.” The sales contract is written to protect the buyer so there are many loopholes that allow the buyer to walk away from the contract. The good news is that 99% of all contracts that make it through building inspections and loan commitments will end up closing. Here are the steps that will get you there:
Building Inspection
The buyer has the option to have inspections done to the property within the time frame allotted in the contract. These inspections can include: termite, radon, standard building inspection, and structural inspection. There are also miscellaneous inspections such as sewer lateral, mold, lead based paint, and pool inspection. Once the inspections are complete the buyer will submit a building inspection resolution. This resolution provides 3 options to the buyer. The first (Option A1) is to request nothing be done to property (this hardly ever happens unless your home has been marketed as an “as is” property). The second (Option A2) allows the buyer to request a list of items to be done. The last (Option A3) allows the buyer to completely walk away from the property. This is a protection clause for the buyer so if there are any issues that concern them, such as structural damage, they are allowed to walk away from the property. In this case, the buyer’s earnest money is fully refunded.
The most common request on a building inspection is option A2. The buyer will submit a list of items that he/she would like to be addressed. Once this request is made the seller will have two options.
The first (Option B1) is to do everything the seller requests. The second (Option B2) allows the seller to pick and choose what will be done out of the list requested. When negotiating a building inspection, it is important to keep in mind that the buyer can walk away if at any time you do not come to an agreement. I always suggest to my clients to put themselves in a buyers shoes. What are important issues that should be addressed? Fore example; termite and/or radon issues should almost always be addressed. When the buyer put in an offer to purchase, the wear and tear of the home is visible and the contracted price is based on that. However, items such as termite damage and radon are hidden and cannot be accounted for when putting in an offer. Many buyers will walk away from the contract if these are not addressed and once back on the market the next buyer will also request the same items to be fixed. The response to the building inspection should always be fair to both buyer and seller. Your agent should also provide guidance in negotiating the fine line between keeping both parties happy.
Appraisals and Surveys
In most cases, the buyer will also need an appraisal and could possibly request a survey. The appraiser is sent from the buyer’s bank and has the basic responsibility of making sure the home is worth what the buyer has offered as a purchase price. The survey is done to ensure the buyer is aware of any encroachments or easements on the property. Once again, if the home does not appraise or there are any encroachments the buyer is not satisfied with, the buyer can walk away with earnest money fully refunded
Inspections Seller’s responsibilities
Unless the home is an “as is” sale, the seller will have a few inspections to complete per the sale contract. In many cases, some or all of the inspections will not be required. Your agent should provide you with the specific inspections you will be required to do based on the location of the home.
Gas Inspection- The seller is required to provide a passed gas inspection. This ensures the home is safe for the buyer to move into.
Municipality Inspection – This is required by many cities to ensure the home is up to code before transferring ownership.
Fire Inspection – (Primarily required in West County and Lake St. Louis). The fire department visits your home to ensure it is safe to transfer ownership. They will check smoke alarms, exits, etc.
Once these inspections are complete you are 90% done - Time to start packing!
The final walk through
Within 72 hours before closing, the buyer has the right to do a final walk through. This allows the buyer to make sure the home is in the same condition it was when the contract was originally accepted. This is also a time to ensure that all repairs in the inspection resolution were done and that everything that was supposed to be left with home was left.
Closing Day
The day of closings we ask our clients to leave on their kitchen counter:
- Any extra keys to the home, gates, backdoor, storage shed, etc.
- Any paperwork or warranties having to deal with the home or appliances.
- The code to the garage keypad if applicable
- All garage door openers
- Any extra copies of passed Laclede Gas Inspection and/or occupancy inspections
You will want to confirm that everything associated with home has been cancelled
- All utilities have been transferred out of your name
- Cable and telephone have been cancelled
- All newspaper subscriptions have been transferred
- Mail has been forwarded to new address
- Any services you have routinely scheduled are cancelled; i.e. lawn care, pool maintenance
You will want to make sure to bring your drivers license for photo I.D. and if you have sold for less than you owe, bring a cashier’s check for the balance (The title company would have already contacted you with an exact amount).
Closing for a seller usually only takes about 15 minutes. You will be provided a HUD with all of your credits and debits associated with your home sale. At the top of the HUD you will see the amount your home has sold for and then the deductions. The basic deductions for closing a home are as follows:
- Any taxes owed on home
- Amount owed on Mortgage
- Amount owed for second mortgage (if any)
- Commission due to Real Estate Brokerage for the sale of your home
- Any concessions you might have agreed to in the original sale contract
- Title fees (usually around $300)
- Courier fees for payoff (usually $75)
There can also be misc. deductions; such as if you offered a home warranty, if you owe any past due subdivision fees, or water or sewer fees; those will also be on your final closing paperwork. You will also sign paperwork regarding the transfer of your home to the buyer and tax related forms.
That’s all there is to it… Congratulations! You have sold your home!
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