Friday, October 23, 2015

8 STEPS TO SELLING YOUR HOME

Step Five - Receiving an Offer


Written offers from potential buyers will not be received by you personally, instead they will be sent to your agent, who will then forward them to you. If your agent believes your home will be highly sought after they may set up a date and time for all offers to be reviewed. This allows all buyers an equal opportunity to get their bids in and reviewed. 

Your agent is required by law to show you every offer they receive, even if the offer is really low or if it comes in after you have accepted another offer. Only you can decide to accept or reject an offer, your agent does not have that power.

Once an offer, or offers, are received, your agent will sit with you and go over all the terms, which must include, but not be limited to, the following:

  1. Legal description of the property
  2. Offer price amount
  3. Down payment amount
  4. Financing arrangements
  5. Who will pay certain fees
  6. Deposit amount (not the same as a down payment)
  7. Inspection rights
  8. Method of transferring title
  9. Escrow agent who will handle closing
  10. Appliances that will stay in with the house
  11. Closing date
  12. Contingencies
Once the offer has been reviewed you have three options:

  1. Counter the offer - If there are parts of the contract you agree with, but parts you don't, you can discuss with your agents which changes you would like made and she will write up the counteroffer and send it back to the potential buyer. The buyer can then accept your offer, reject your offer, or counter your offer with a new one. Countering can go back and forth as many times as needed until an agreement is reached or one party walks away.
  2. Reject the offer - If you feel the offer is unfair or so low that there is no point in countering, or if you have better offers to choose from, you can reject the offer. However, you CAN NOT reject an offer based on the potential buyer's race, religion, sexual orientation, marriage or family status, disability, or any other form of discrimination. If the offer is at full price, and the buyer has proven he is financially capable of purchasing the home there is no reason to reject the offer (unless a better offer has been presented). Rejecting an offer based on a discrimination can lead to substantial fines and legal charges.
  3. Accept the offer - If you feel the offer is fair and no changes are necessary you can accept it as is. 
Once you sign an offer it becomes a legally binding contract, so it is very important that you understanding what you're signing. If you are uncertain or confused about any aspect of the contract be sure to ask your agent questions BEFORE signing. 

Back-up offers - If, after you sign an offer, a better offer comes in you can save it as a back-up offer if the potential buyer who sent the better offer agrees. If the original offer fails to close for any reason the back-up offer will automatically come into play. However, it the back-up offer buyer finds another home while the first contract is still active, they can terminate. 

Remember, all offers are not the same, and there are a myriad of different contingencies that can be added or removed. This post describes the most simple of contracts for Washington State. The rules for what must be in included may differ from state to state.


Wednesday, October 14, 2015

8 STEPS TO SELLING YOUR HOME

Step Four - Marketing


Now that your house is prepped and ready to sell your agent will design a marketing plan specifically for your home. A good marketing plan generally includes all or some of the following:

Internet Advertising - This includes listing your home on the MLS (Multiple Listing Service) as well as on the agent's personal website or brokerage website. Once your home is listed on these sites it will automatically appear on popular home search sites such as Zillow and Trulia. Your agent may also make ads for Facebook, or post your listing on Linkedin groups. Internet advertising is the most important aspect of marketing.

Yard Signs - The "For Sale" sign in the yard is what generally comes to mind when people think of selling a home. Yard signs are important because they often bring interest from people who might not have even been thinking about buying. However, they can also bring in a lot of looky-loos and if you're selling a high priced luxury home your agent may choose not to hang a sign. This will prevent people who aren't serious or capable of buying your home from traipsing around the property. 

Agent to Agent Marketing - It's common for agents to mass email your listing to other agents who may have buyers interested in your home. This is a very cost effective and efficient way of bringing in potential buyers that For Sale By Owner sellers don't have access to. 

Direct Mail Campaigns - This type of marketing can be costly and hit or miss. Out of every 100 people to receive a mailer about your home, maybe 1 or 2 will be interested. 

Open House - A lot of sellers believe in order to sell their home the agent must hold it open. The truth is, only 1% of homes actually sell at an open house. A more efficient marketing strategy is to hold a broker's open. This is an open house in which only other agents are invited and they're usually served drinks and a light lunch. The agents will then tell their buyers about the home and bring in a lot more traffic than an open house for the public would generate. 

Media Advertising - Advertising in newspapers or magazines typically yields the lowest results, but can come with the highest cost, so most agents no longer utilize this method. 

Photography - I personally believe your agent should always bring in a professional photographer to shoot your home. I have specific photography packages that I offer for free based on the price the house is selling at. If the seller would like additional photos they are required to pay for them, usually at $10 a photo or whatever price is set by the photography company. Some agents feel that snapping a pic with their cell phone is sufficient, but when a buyer is deciding which homes they want to look at they will almost always choose the one with the professional photos. 

How many of these methods your agents uses will depend on the price range of your home. Remember, your agent has to pay for all marketing costs in the hopes they will make the money back once your home sells. If your house is selling for $250,000 your agent probably won't do a direct mailer or media advertisement simply because the price is too high for such minor results. 

If you think your agent should be using a certain method and they are not, ask them why, but remember they probably have a good reason for doing so. Ask to discuss their marketing plan in detail before they begin so you have a firm understanding of what they will be doing. Keep in mind your agent does not want to simply bring in a lot of people, they want to bring in the most qualified buyers. 

Finally, your home should be marketed to it's strengths. If you're selling a luxury home all printed materials should appear luxurious. You can also market your home to the decade it was built (such as my favorite, Mid Century Moderns) the location it's in (urban, city dwelling, country living) or any historical significance that may be attached to it. 

Your agent's main goal should be to make your home stand out from the rest and bring in the majority of traffic within the first 3 to 6 weeks your home is on the market.  

Monday, October 5, 2015

8 STEPS TO SELLING YOUR HOME

Step Three - Preparing Your Home


When trying to sell a house, first impressions mean everything. When you have lived in your home for a long time it's easy to get used to minor imperfections, such as doors that stick or a missing section of baseboard, but potential buyers will notice immediately. 

The condition of your house can and will affect how long it takes to sell, and how much buyers are willing to offer, so let's get it in showroom condition!
  1. Clear the Clutter. Begin by packing up and removing anything you don't need to use on a daily basis, such as knick-knacks, excess books and movies, piles of mail, and anything else that causes clutter. De-cluttering kitchen and bathroom counters is especially important. You want potential buyers to be able to move freely around your house without bumping into things and you want their focus to be on the house, not the stuff on your shelves!
    2.  Remove Personal Items. Removing items such as family photos and drawings your children              made will help buyers picture their own family living in your house. People often think keeping
         family photos up will give the house a homey feel, but it actually makes buyers feel as though            they are intruding in someone's home. Take them all down and give the buyers a clean slate to            work with.

    3.  Clear the Way. Remove or rearrange furniture to create open walk ways around your home.              Pull all furniture away from windows and walls and remove anything that makes a room feel              tight. This is also important for the garage, which is often used by sellers to store their things            before moving. Buyers love looking at the garage and it always excites them to see a clean,                open space just waiting for their car and new work bench.

    4.  Make Minor Repairs. This is the time to fix all those little things around the house you've                been meaning to get to for years. Leaking faucets, doors and windows that stick, and that                    cracked tile in the bathroom are all simple and affordable fixes. Changing light switch plate                covers so they all match, replacing light bulbs, and laying out a new welcome mat will make a            huge difference in how a buyer views your home. Major renovations, such as a new kitchen, are          usually unnecessary and won't raise the value of your home by much. Keep it simple and focus            on the small things.

    5.  Paint. A fresh coat of can make a world of difference in the land of first impressions. Choose            neutral tones that are easy on the eyes and keep it simple. Buyers can be finicky and as silly as            it sounds the wrong shade of blue on your walls can turn away a potential buyer.

    6.  Garden. The front yard is usually the first thing a buyer sees, so don't forget to work on that              curb appeal! Sweep the walkway and trim back any hedges or plants that may be growing over            it. Rid your doorway of spider webs and add a nice hanging basket of seasonal flowers. If you            can, plant some flowers, add some mulch, and above anything keep the lawn mowed! The same          can be done with the backyard to create a relaxing and inviting feel. 

Your home is now ready to sell! If you don't feel up to doing some of the things on this list you may want to consider hiring professionals, such as painters, gardeners, and home stagers. Spending a little money on prepping your home will help it sell faster and may even yield you a bigger profit in the end. 

Thursday, October 1, 2015

8 STEPS TO SELLING YOUR HOME

Step Two - Name Your Price


Pricing your home is not as simple as deciding how much you want for it and slapping on a price tag. The value of your home is determined by the follow:
  • the current market
  • the condition of your house
  • what similar homes are selling for in the area
The value of your home is NOT determined by the following:
  • what you originally paid for it
  • what your neighbor, friends, co-workers say it's worth
  • what you need or want it to be worth
  • what it would cost to rebuild it today
In order to determine what your home is worth your agent will perform a Comparative Market Analysis, or CMA. To do this the agent will find a list of similar homes in and around your neighborhood that are currently for sale or that have sold in the last few months. She will then compile the data to show you a low and high price range of homes selling in your area. A good CMA will also include photos of the comparative homes as a visual example of what low end and high end homes look like. This will give you a good idea of how your home compares in the current market and will help you determine a fair asking price. 

Just like your neighbors, friends and co-workers, your agent should not decide what your home is worth simply by looking at it. It is common for agents to make an educated guess based on the current market and the condition of your home, but it is in your best interest to ask that a CMA is performed.

If you want an extremely accurate price point you can have an appraisal done on your home. This is something you would arrange with a home appraisal professional and typically costs a few hundred dollars.

The Market

The housing market fluctuates like any other market, and like any other market, this fluctuation is caused by supply and demand. 

When very few homes are on the market the supply is low and the demand will be high. This is known as a Seller's Market because the demand for homes will cause the prices to rise, thus being more profitable to the sellers. This will lead to more homeowners deciding to sell in order to reap the benefits of rising values. 

As more people begin to sell the supply begins to go up until the market becomes saturated. Now the supply is high and the demand will lower, making it a Buyer's Market. During this phase of the market the buyers get to call the shots. Sellers will be offered much lower prices for their homes because the buyers know they have plenty more options if the sellers turn their offer down. 

Pricing Too High

Pricing your home too high is one of the biggest mistakes that can be made when selling a home. Unless your home is truly unique, no one will pay above market value if they can purchase a similar home down the street for a fair price. 

Studies show that homes priced 3% above market value take longer to sell. If your home sits on the market too long buyers will begin to think something is wrong with it, and they will avoid it. This generally leads to homeowners dropping the price of the home way below market value and receiving less of a profit than they would have had they priced it fairly. 

This may seem like it would only be a problem in a buyer's market, why be worried about pricing too high in a seller's market when prices are rising anyways? In a seller's market, buyers know they will be paying a pretty penny for their home, so they are always in search of a deal. Pricing your home fairly will bring a flock of buyers to your door and could even result in a bidding war. This will have a much more beneficial outcome for you than pricing so high buyers simply walk on by.

If you are unsure about the current market and whether or not you should wait to sell, many agents will perform free CMAs to give you an idea of what your home is currently worth. Once you have that information you can determine a fair price and move on to step 3, preparing your home!