Home Selling Steps
Selling your home is a big decision and to maximize your gain, you have to be sure that your house is top condition. If it is less than the best it can be, it is unlikely you will receive the Best Value possible. Of course, that is your decision. There is a lot you should do to prepare prior to marketing your property. Perhaps the most important tip is that you should try to emotionally detach yourself from the home you have known.
No two home sales are exactly alike so you need to do all you can to prepare for your experience. HomeSmart Reports has outlined some major steps that occur in a sale for a seller. Yours will be different than what’s written here but most of the steps will be very similar. Our aim is to help provide you an understanding of what you might expect during the sales process and we hope you’ll find the information useful.
- 1. Making the decision to sell
2. Cleaning up the clutter
3. Using a real estate company?
4. Setting the price
5. Marketing your home
6. Selling your home
7. Escrow period
8. Moving
Step 1: Making the decision to sell
At the point you choose to sell, your house has essentially become a financial asset you are moving away from for some good reason. You have determined that it is time to sell and you want to maximize your gain. People sell homes for many reasons and they are entitled to earn their fair share of equity on the sale of a property. Spending some time on the preparation of selling your home will be time well invested.
Take a hard look at your property as if you were seeing it for the first time. What attributes appealed to you? Do they look as good now as they did back then? Is your house in a good state of repair or are there things you should do before you market it? The first few weeks of the listing period are often the most hectic, with everyone (buyers and agents) trying to see if it is right for them or their clients. There’s an old saying “you don’t get a second chance to make a first impression”. For you, that means trying to be as objective about the condition of your property as possible and getting your house into top condition.
Step 2: Cleaning up the clutter
As you prepare to sell your home, clean up any clutter you may have. This serves a double purpose. If you are planning to take various tools, yard equipment and other things you use in maintaining your home with you, start to use only those things you’ll need while it’s on the market. Packing up the other things will help clean up the clutter and result in fewer things to pack when it comes time to move. Planning your move is a very important thing in the home selling process. Cleaning up the clutter will make your home more appealing and give you one less thing to think about as your escrow draws to a close.
If you have trees that need trimming, lawn that needs mowing, sprinklers that need fixing, trim that needs painting, get it done before you market your home. Home inspectors see nearly all of these things and you may be faced with fixing them anyway, so why wait? A home in good repair demonstrates pride of ownership and this type of home is likely to command a higher price than those that aren’t in top shape.
Step 3: Using a real estate company
If you are planning on using a real estate company, it is a good idea to interview several. They should prepare competitive market analyses, provide you with a resume of accomplishments, their experience in the business and successes they’ve had in selling homes. You might ask an agent, “What is the most difficult situation you’ve encountered in real estate sales?” This type of question will give you an idea as to how they perform under pressure. It will also give you an idea of how well they deal with certain situations.
There’s always a great debate among “For sale by owner” sellers, and that is, can they save the commission paid to a real estate brokerage? We not proposing to answer that question as results will vary depending on the owner, the effort they are willing to put into selling their house, the amount of time they have to sell, how much they’ll spend on marketing, current market conditions and other intangibles. These days a 5-6% commission rate is fairly normal among “full service” brokerages. On a $300,000 home that’s about $18,000. As the price moves higher, more and more commission money is at stake.
If you sell “by owner,” here are some things you face:
- You’ll need to spend money on advertising in the paper and on the internet.
- Coming face-to-face with prospects and having to listen to their comments about your home. They’ll most always be negative because buyers don’t want to overpay for your home. Don’t take offense, just understand that they aren’t going to say great things about your home (in most cases) when they are about to negotiate with you.
- Brokers will try to steer clients away from your street since they don’t want their client to see a for-sale-by-owner sign.
- Get ready to do open houses and make yourself available most any time a buyer wants to see it. If you are too restrictive about times to see they home, you’ll cut down on your list of potential buyers. Most sellers aren’t prepared for this “home-showing” intensity.
- If you successfully negotiate a sale of your home, you’ll need to note all of the particulars in an agreement and then open escrow so that each party’s needs are handled during the course of the transaction.
- You should have a process by which you validate or “qualify” buyers. Sometimes “buyers” aren’t really buyers at all and may want an appointment to case your home for a future burglary, so stay alert to this situation.
These are just a few of the issues you could encounter and the important thing is to have a plan in place to deal with them if selling “by owner”. In the end, you need to determine if all of the issues above, and more, are the things you want to tackle to save a commission.
Lastly, both parties can’t save the commission. If a buyer sees a for-sale-by-owner, they are also thinking “I wonder if we can save some of the commission as well…let’s offer a slightly lower price.” These are all natural thoughts and should be considered in your sales plan.
Using a real estate company will generally produce a different set of results than for-sale-by-owner marketing. Individual real estate companies very often have a substantial number of buyers waiting in the wings to find the right home. When this is extended to Multiple Listing Service (MLS) member companies, the number of potential buyers increases dramatically.
When you list a property, there is “action” generally within the first week, and you’ll experience a number of showings of your home. There will likely be a brokers’ open house so that 25-100 agents and brokers will see your property on a weekly caravan of homes that have been newly listed. Astute listing agents will ask the other brokers for a critique of the condition of your home and the listing price. In this manner, they get constructive feedback as to how well your home is priced in the current market climate.
Take all of this information in the manner that it is intended, which is to help you sell your home in an efficient and timely manner. Make no mistake that listing with a real estate company will nearly always bring more activity on your home than if you list it yourself. Using a real estate company will allow you the freedom to prepare for a move and to go on about your daily life in a more normal manner. For example, if you need to do errands and the home is about to be shown, you can take off while the agent shows your home. Otherwise, you’ll have to wait for a buyer (who may or may not show), and that can disrupt your daily routine.
Weigh the pros and cons of selling by owner and using a real estate company as you plan for your move and all of the details it involves. Either way may work well, depending on the market, your patience and your overall willingness to throw yourself into the job of selling your home.
Step 4: Setting the price
Selling a home requires a lot of thought and setting the price of your home is one of the most critical. Setting the price too high will nearly always reduce the number of interested buyers you will get to see the home. In real estate, it’s a numbers game. The more qualified people you have come through your home, the more likely you are to find an interested buyer ready to make an offer. Conversely, the fewer people you have come through, the less likely you are to receive an offer. If the price is too high and the home is on the market too long, people begin to wonder “what’s wrong with the home…why hasn’t it sold”. This type of doubt can create a negative “feel” for the home in the buyers’ mind. This is basic common sense, but the number you pick (the price of your home) will largely determine your prospect pool of buyers.
In setting the price, get feedback from real estate companies. Even if you don’t use them, they are in the market every day and have a very good idea as to values. At the very least, you will have a good understanding of the range of values. By visiting www.homesmartreports.com you can easily gain an estimate of value for a small report fee and you may not have to get as many additional opinions of value. So, using an automated result saves you time as well. The HomeSmart Value Report is a solid benchmark in setting your price and you’ll be able to compare it against what real estate agents tell you.
If you set your home price too low, you may find a crush of activity and be in a situation of 1) having left money on the table or 2) be faced with multiple buyers at the same time in which case, you need to pick the right one to ensure closure of your transaction. Setting the price, or more specifically the “right” price is an essential part of your overall marketing and sales plan for your home and should be taken very seriously. Smart buyers will recognize ridiculous pricing quickly and they will also recognize a great buy.
Step 5: Marketing your home
You have done a lot to get to the point of marketing your home. A number of decisions have been made about your future plans, the condition of your home, any repairs you’ve made and the price at which you’ll offer your house. There are many aspects of marketing and you need to do all you can to do your part. If you list with a real estate brokerage, the best thing you can do is always have your home ready for a showing. This isn’t easy because you have to live there while it is on the market. Little things, such as not using a particular room as much, mean you won’t have to do extra clean up prior to showing. If your home is being shown again and again, cleaning rooms gets tedious.
Your home will never get a second chance to make a first impression on a potential buyer. If selling by owner or through a brokerage, try to avoid “drop in” showings by prospects. They usually catch you at a bad time, the home may not be picked up, and even if they say “Oh, I don’t care how it looks now”, do your best to keep them away until the home is more orderly. Marketing your home is a combination of exposing it to potential buyers, enticing them to view the home and for them to see the home in the best possible condition. Don’t squander those showing opportunities as they can be few and far between.
If you are selling by-owner, you’ll also need to plan for a series of newspaper advertisements for the buying public to review. Advertise only when you know you will be available to show the home. Buyers who are in buying mode become very “mission-oriented” and typically want to find a home very quickly and get frustrated if a for-sale-by-owner property isn’t available for showing. The home search process is generally very objective-oriented, and finding a home can be a consuming event for a buyer. When they want to find a home, they are very focused and you can’t afford to miss those opportunities as a seller, so make sure that you advertise and that you’re available for showings.
Marketing your home may take days, weeks, or months to find the right and qualified buyer. You have to be consistent in marketing, your property ads need to appear regularly, and you must be available to do your part of showing the home. Real estate brokers are a huge help at this juncture, if you use one, because they do that work for you with their personal, and MLS network connections. They allow you the freedom to lead a more normal life than if you are selling your home by owner. Again, control what you can, such as condition and orderliness of your home, and let the real estate professionals do what they do best, which is to attract an interested group of buyers.
Step 6: Selling your home
Everything you have done to get to the point of actually selling your home has meant a lot of effort on your part, whether selling through a brokerage or by yourself. If selling by owner, and you find an interested party wanting to make an offer, you’ll need to find a way to execute a contract that is binding on the parties. You can find various types of contracts for sale on the Internet that are moderately priced. You need to read them and make sure that both you and the buyer can agree to the terms of the sale. You’ll have to negotiate terms such as the escrow period, the moving date; personal property involved in the sale and of course, the price of the home. You may also need to use an attorney to protect your interests.
Make no mistake, selling your home without a broker is not an easy task. You have a buyer who wants the best value, you want the best value, neither of you wants to pay the commission and each of you has to make your way through an agreement with acceptable terms and conditions. You need to be patient and to take the emotion out of the process to the best of your ability. It is important to be methodical and for each party to focus on the task of getting an agreement negotiated.
This is one of the essential values of a real estate broker at this point. If you have qualified your broker well, she or he will begin to serve you as a negotiator, or a go-between, and act to get you the best value possible for your home. The same is true of the buyer’s agent but each broker has motivation to successfully conclude the transaction. Having a buffer between yourself and a buyer can be absolutely essential if there are many terms and conditions. If brokers are skilled, they are very capable of helping you reach successful closure of the deal.
This point of negotiation is often lost on the real estate agents themselves. The value they present in being a buffer and a negotiator can mean the difference in closing a sale or not. In a sense, you are giving them the opportunity to mentor you in the sales process and helping you navigate the negotiation. Assuming the negotiation is successfully concluded, it will be followed by an escrow period where all the terms of the negotiated sale have been met by both buyer and seller and you’ll all be relatively satisfied in the end.
Step 7: Escrow period
After you have successfully negotiated an agreement, your sale moves to the next phase when the buyers need to qualify for the loan, a home inspection and the appraisal occur and any necessary repair work on your home needs to be done takes place. The earlier you can get these things done, the better. Escrow periods are generally 30-45 days, and the time seems to fly by. As the seller, you need to comply with everything you’ve agreed to in the sales contract, and also start to pack up your belongings and arrange for a move date.
There are uncertainties about whether the buyer will qualify, or the home will appraise for the right price and whether all the conditions of sale can be met during the escrow period. Again, this is a time when a real estate broker can be of immense help to you. The agent and their assistant will keep you abreast of the things that have been completed in the transaction and those that need to be completed. Some will require your attention and others are left to the buyer and agents to complete. Stay on top of every thing you need to do. One particularly nice touch is providing the new owners with a list of neighborhood services you have used, your favorite restaurants as well as other essential details they’ll need to know.
Note: It is not uncommon to wonder up until the last of days of the escrow period whether a home will close. You need to stay in touch with moving companies or truck rental companies so they can plan accordingly. You don’t want a mover to show up if the home doesn’t close, but your contract terms only allow so much time to vacate the property once it’s sold. Communications with all parties becomes absolutely essential at this point. A successful escrow closing is your goal and the broker or agent will do a lot to help you attain the objective of “closing” the sale. Once that’s done, it’s time to Move!
Step 8: Moving
Planning your move is very important from a coordination standpoint. Leading up to and during the escrow period, you should have been packing non-essential living items, labeling them and getting them ready for transport. Few people can imagine the number of personal items they’ve accumulated over the years. During the overall sales process, you may want to pack up certain things you seldom use and donate them to a favorite charity. It will help others and also, quite literally, lighten your load when it comes time to move. You may also want to have yard sale to generate a little extra cash.
Moving takes a lot of effort and by having a checklist of things that need to be accomplished, it will happen in a relatively orderly manner. It will help you be as systematic and orderly as possible in a very hectic few days. The more advanced preparation you can do, the better it will be for both yourselves and the new owners of your home.
If you are moving to another home you have purchased, coordination of these escrow closings is particularly critical. If the home you are selling closes and the home you are buying has not closed, you had better have an alternative plan to be able to store your belongings for a period of time, such as a hotel or temporary living facility. Moving is stressful enough without having to do it twice. Be mindful of this as you are negotiating the sale of your property sale. Try to allow enough time to accommodate all parties. You’ve been through a fairly stressful few months and you don’t need to compound it by not having properly planned for your move.
