What Is The Process For Selling My House?
The Selling Process:
There are many different steps in a successful real estate transaction!
Setting the Price
Setting the price is the most important decision you will make in marketing your house. When your house hits the market, the buyers that see if first are “seasoned.” They know the area because they have been looking and unable to find anything yet. They know where it should be priced and if it is overpriced, they will wait some more. On the other hand, you also don’t want to under price it or you could lose money. Pricing your house is an important decision you will make and we will provide all the information you so we can set the price at an appropriate rate.
Comparative Market Analysis
We will develop a comparative market analysis specific to your house. This analysis will describe homes in your area that have recently sold in the area and may compare specific features of your home to others–the value of a corner lot, a city view, or an extra bedroom, for example. Regardless of what you originally paid for your home and the cost of improvements you have made, the only price that matters is what the market will bear at the time you decide to sell. The CMA allows us to compare your home to other homes that have sold in the area and within the last 3 months. This paints an accurate picture of where to price your home so you can take advantage of the seasoned buyers.
Once you’ve decided on a price range, we will help you calculate an estimated amount you might net from the sale. If you have owned your home for several years, you may have built up sizable equity. Equity is the difference between the value of your home and the balance on your mortgage. After subtracting what you owe on your mortgage and your estimated closing costs, this will give you your net proceeds. The closing costs you can incur may include title fees, taxes, a penalty for prepaying your mortgage, brokerage commission, attorney fees, and charges for preparing and recording documents. Finally, ask your tax adviser or attorney about the tax implications of your proposed sale.
Signing a Listing Agreement
After you choose a REALTOR®, you will most likely sign a listing agreement–a contract in which you agree to allow a REALTOR® to sell your home during a given period and pay the REALTOR® a fee when your home sells. Most REALTORS® are independent contractors who work for a company operated by a licensed real estate broker.
The amount of compensation you pay a broker is negotiable, but the REALTOR® will generally follow the company’s policy regarding compensation. The amount of the fee will be spelled out in the listing agreement. Make sure you understand how the fee will be paid before signing.
Length of Listing
The listing agreement will specify how long you agree to list your house with a company. You want a period that’s long enough to motivate your REALTOR® to advertise your home and respond to buyers, yet short enough to allow you to change to a different company if you become unhappy with the REALTOR®’s service.
Remember that the listing agreement is a contract. You should get a copy for your records. Your REALTOR® is bound to the terms just as you are. You can expect the REALTOR® to keep appropriate information confidential and effectively market your property.
MARKETING YOUR PROPERTY
Preparing your home
In preparing your home for viewing by prospective buyers, remember that people buy on emotions. Your home has to feel right, or buyers will look elsewhere. We will provide a detailed punch list of items we recommend completing prior to listing. We will objectively look at your home together with you and suggest ways to make your home more inviting and sellable. Consider both the exterior and interior. Since you will be appealing to buyers’ feelings, you need to pay attention to detail.
Clean your home thoroughly and make minor repairs such as tightening towel racks and gluing wallpaper edges. For larger repairs, ask us as to whether repairing the item will generate a good return on the sale. Repainting the woodwork may be worth it, but replacing the carpet may not.
Honesty and candor
If your home has a major problem you don’t intend to correct, be candid about it. Don’t paint over the water marks on the ceiling to hide a leaky roof. Buyers will find out about the problems anyway, especially if they are smart shoppers and hire a professional to inspect your home. It pays to be open about everything.
As part of our overall marketing strategy, we will have your house photographed and you can select using a professional photographer. We highly recommend using a professional photographer because once we put your house is in the MLS, it will spread to over 4000 local real estate sites and great photos allow for great daydreams by our potential buyer. We can also spread the word of your house through social media so let us know what you love most about your home and we will help you spread the word.
When the showings begin, keep your home clean and ready. We will try to give you advance warning before showing your home but be prepared anyway. Open the blinds, get rid of any distinct odors and be absent when the buyers come with their Realtor®. It is best if you aren’t there. Many buyers feel like intruders if the owner is present. Leaving allows them to relax and go at their own pace.
REALTORS® are required by law to make your property available to all persons without regard to race, color, religion, national origin, sex, disability, or familial status. Your REALTOR® will not discuss any matter that may potentially discriminate against any person.
When a buyer makes an offer on your home, we will contact you promptly. We will review it with you carefully and answer your questions. The written offer lays out all the terms of the proposed transaction–the price the buyer is willing to pay and the financing terms–and becomes a binding contract if you sign it.
The offer may be contingent on the buyer selling a home first or obtaining an inspection. Ask your REALTOR® how these terms affect you and whether the offer is in line with the market. The offer describes the property, states who pays for which closing costs, and specifies dates of closing and possession. Along with making the offer, the buyer may place some earnest money with the escrow agent as a sign of good faith. The earnest money will be kept in an escrow account and applied to the buyer’s down payment or closing costs when the sale closes.
In reviewing the offer, you have three options: accept, reject, or make a counteroffer. A counteroffer is a rejection of a buyer’s offer with a simultaneous offer from you to the buyer. Carefully review the figures compiled earlier to determine your net proceeds–closing costs may be quite different from earlier calculations. Discuss the possibilities with your REALTOR®, your attorney, and a tax adviser. This is one of the opportunities where we can negotiate for you and come to terms that will help you move to the next stage of your move.
In most residential sales, Colorado law requires that the seller deliver a seller’s disclosure notice to the buyer on or before the effective date of purchase. This document provides important information about the seller’s knowledge of the condition of the property. Complete the notice to the best of your knowledge and belief. We will ask that you complete the notice at the time the listing is first taken. Copies of the completed notice will be made available to those looking at your property.
Lead-based paint disclosure
If your property was built before 1978, federal law requires that before a buyer is obligated under a contract to buy the property, the seller shall: 1) provide the buyer with a lead hazard information pamphlet (as prescribed by EPA); 2) disclose the presence of any known lead-based paint or hazard; 3) provide the buyer with a lead hazard evaluation report or records available to the seller; and 4) permit the buyer to conduct a risk assessment or inspection for the presence of lead-based paint or hazards. A contract for the sale of property built before 1978 must contain a statutorily prescribed Lead Warning Statement to the buyer. We will will provide you with the forms necessary to comply with the law and will suggest procedures to follow in order to comply.
Accepting the Offer
Once you and the buyer agree on terms and sign the contract, the ball starts rolling. We will monitor the loan process, which could last several weeks. During this time, we will also coordinate other arrangements to prepare for the final sale.
As part of the process, the title company may order a survey of your property and research the title to your home, making sure the chain of title is clear. Clearing the title may require paying off liens–that is, any monetary claims against your property. Examples are: mechanic’s liens, unpaid state and federal tax liens, court judgments, and probate considerations (if a co-owner has died). The product of the title search can be in the form of title insurance, abstract of title, or certificate of title, depending on what is specified in the Contract to Buy and Sell.
Inspection and Repair
If the buyer requires it, we can coordinate an inspection of your home. The buyer may hire an inspector to review many items in the property such as the structural components, mechanical items, electrical systems, and plumbing systems. The inspector will report to the buyer the items that the inspector finds to be in need of repair. Most likely, the buyer will provide a copy of the inspection report to you and may ask you to complete certain repairs. Don’t be surprised if the inspection notes some items in need of repair. An inspector is trained to see items and defects that are not obvious to you and your REALTOR®. No matter how new or well-maintained a home is, an inspector may find some items in need of repair. This is another area where we will negotiate for you.
Closing the Deal
The sale formally ends at the closing table. In most transactions, the closing lasts less than an hour and often occurs at the title company office. A title company officer or escrow agent will preside and the buyers, buyers’ agent and of course your Realtor can all be present. Be sure to bring your driver’s license to the closing.
The sale actually consists of two transactions: 1) transferring the property to the buyer, and 2) paying off the existing mortgage on your home (or allowing the buyer to assume your mortgage). To transfer the property, the title company will present documents proving that you have the title. Proceeds of the sale may be disbursed at closing or shortly thereafter, once all the paperwork and verifications have been processed. When you give your house key to the new owners, the sale is complete.