The ABCs of Selling Your Home
A. SELECTING AN AGENT
A good real estate agent will have a sound strategy for getting your home sold. She2 will help you to determine a listing price, manage showings and help you respond appropriately to showing feedback. She will coach you through offers, negotiate contract contingencies and escort you to and through closing. The above will be done with your best interests in mind at all times and without need for your constant supervision and oversight. Mindful of the qualities of a good agent, consider the following when making your selection ~
Knowledge & Experience
A good agent has tried and true selling strategies, extensive knowledge about pricing and markets and, with numerous transactions under her belt, the wisdom and business savvy to guide you from contract to closing.
Knowledge and experience are not necessarily tied to “years in the business.” A legal background is a great asset when it comes to contracts and negotiation. Marketing strategies may have been formulated in business school, or during an internship at an advertising agency. And, an agent that has closed 50 transactions a year for 4 years has a much deeper reservoir of practical experience than one who has been in the business for 15 years, but only closes a half-dozen or so deals per year.
Most agents have a geographical area (a sphere) of expertise. Familiarity with neighborhood schools, covenants, development plans, driving distances and the like can be great assets when dealing with prospective buyers. In addition, agents may have expertise with regard to certain types of property (e.g., high-end homes, ranch properties) or particular markets of buyers and sellers (e.g., military).
If you are facing foreclosure, or are upside down in your mortgage, you will want to engage an agent with expertise in distressed properties and/or short sales.
Keeping and being on time to appointments, promptly returning phone calls and e-mails, making sure you stay informed throughout the transaction and always maintaining composure are all hallmarks of a good agent.
Good agents have a network of specialists they utilize to help with the home selling process. Those specialists include inspectors, appraisers, photographers, stagers, title companies, repair people and movers.
B. PREPARING YOUR HOME
Once you have selected an agent, the sale of your home will proceed through two phases. Phase 1 begins when your listing goes active3 and continues until you accept an offer. Phase 2 begins when you go under contract and ends at closing. Phase 1 involves marketing your home (e.g., uploading to the local MLS and similar listing websites, mailing campaigns, open houses) and adjusting the price and terms of sale based on market feedback.
Current market dynamics4 are undoubtedly the largest single factor influencing the duration of phase 1. However, you can increase the probability that your phase 1 will be shorter than average if you heed the following.
Clean & Clutter-Free
Before your home becomes an active listing, it is a good idea to make minor repairs, eliminate clutter, and clean thoroughly from attic to basement. When a prospective buyer views your home, all light fixtures should have working bulbs and no buyer should find a loose hand railing on a staircase, or a broken towel rod in a bathroom. The message you want to convey is that your home is well maintained and little annoyances send the wrong message.
Clutter (whether it be knick-knacks fighting for room on end tables, boxes stacked in a closet, or photographs covering the refrigerator) takes away from a sense of spaciousness and makes it more difficult for buyers to imagine themselves and their furnishings in your home. When you are cleaning, sell or donate items you no longer need and store any excess.5 Your home need not be Spartan, but it will show better if it feels open and inviting.
Your real estate agent may suggest more substantial preparatory work – for example, professional carpet cleaning, or painting over bold colors with neutral tones. Such suggestions, though cosmetic, can significantly enhance how well your home shows. Remember, a good agent knows what sells and what the current market demands.
Some agents will encourage a “pre-inspection” of your home to uncover any latent defects. Most buyers write purchase offers with an inspection contingency. If an inspection has already been completed and items noted in the inspection report have already been addressed, a buyer may be willing to forego the contingency. A pre-inspection is an excellent strategy if there are concerns about the possibility of serious problems (e.g., septic, structural integrity), or if the market is soft and you want to avoid hitches while under contract.
Your home may need repairs or improvements that are not in your current budget (e.g., new flooring or carpeting, a new roof). It may be possible to address these issues through a price concession or a closing credit. Your agent will advise you as to the best tactics for handling such issues.6
Staging & Curb-Appeal
If you move out during the listing phase (or before), you may want to consider staging your home or engaging the services of a caretaker. If you stage, you need not furnish every room, but you will want to be attentive to key spaces, or spaces that may be difficult for buyers to fill in their mind’s eyes. If you engage a caretaker, they will furnish and live in your home. Professional caretakers understand the importance of keeping a home clean and furnishing in a way that best highlights its unique features.
When a prospective buyer arrives at your home, what is the first impression? “Curb appeal” can make or break a showing, so it is vital to keep the exterior of your home as presentable as the interior. Mow your lawn, weed your flowerbeds, and make the entryway as attractive and welcoming as possible.
Maintenance & Miscellaneous Touches
While your home is an active listing, it should remain clean at all times (avoid the trap of picking up only when you know that a showing is scheduled). Before leaving for the day, take the time to walk through and be sure that all beds are made, toilet lids are down, dishes are washed and put away, and floors are clean.
During showings, many sellers like to leave candles burning or set out diffusers for an extra-special ambiance. It is best to use a subtle and neutral fragrance if you chose to scent your home.
Sellers will often keep a property profile book available for prospective buyers. Such a book includes important information about your home and about your neighborhood (e.g., average utility charges, covenants, neighborhood statistics). Some sellers will also include a list of recent upgrades to the property. For example, if you have recently installed a new roof, or if windows have all been replaced, those are important selling features.
If your home is inviting on first approach, if the interior feels open and spacious, if fixtures and appliances are in good working order and/or backed by a warranty and if it is priced competitively, then you have done everything to maximize the likelihood of a quick offer at a great price.
C. CLOSING & BEYOND
Most home sales will close 30-45 days after going under contract. It can seem as though the days during that time (i.e., Phase 2) do not have enough hours.7 You can reduce the stress level by remembering the following ~
Important Documents & Information
Although you will be anxious to get everything in your home boxed up and ready to move, you should retain access to your files of important documents. You may have a property survey that satisfies a buyer request or a title requirement. Occasionally a paid off mortgage still shows as a lien against your property and you are asked for documentation evidencing the payoff.
Specific information that will be required at or before closing includes the bank name(s) and loan number(s) for your mortgage(s), taxpayer identification numbers8 (e.g., SSN) for all sellers and a forward mail address.
If you cannot attend closing on the day it is scheduled, you will need to arrange for either a pre-signing, or a remote signing (i.e., a “mail-out closing”). Alternatively, you may elect to have documents signed on your behalf by power of attorney. Let your agent or your title company know ahead of time about any special signing accommodations.
Mail & Utilities
You will want to arrange with your post office to forward mail to your new address and you will want to provide notice of your new address (e.g., to friends, your employer, credit card companies).
Generally, you do not want to terminate utility service to your home, as there may be costs associated with re-activation that can be avoided. However, you do want all post-closing utility fees to be the obligation of the buyer.
Your buyer will walk through your home immediately prior to closing to make sure everything is in order. At the final walk through, you should be completely moved out and the home should be clean and presentable. Closing day is often a day of excitement and high emotion for buyers (particularly first-time buyers). Meeting a buyer’s reasonable expectations related to delivery of the property is a good way to insure a smooth closing.
Bring valid identification (e.g., current driver’s license) with you to closing. Your signature on the deed transferring the property to the buyer will be notarized and the name on your ID should match your name as it appears on the deed. If it differs (e.g., you acquired title as a single person and your ID reflects your current legal name as a married person), you will need documentation to explain the variance (e.g., a marriage certificate). Ask your agent or your title company what documentation you will need.
Keys and garage door remote controls will be turned over to the purchaser immediately after closing.
The sale of a home is a significant life event. If you remember your ABCs, you will locate and hire a first rate agent, in short order you will receive and accept a good offer, you will proceed expeditiously to the closing table and you will complete your sale without drama or disappointment.
1. Unified/Stewart Title Company believes it is wise to hire a real estate agent to handle your home sale. Considerable skill is involved in listing and selling a home and data uniformly support higher prices for homes sold by real estate professionals. Of course, we acknowledge special circumstances and we know that there are property owners with the proficiency and patience to handle a sale on their own.
Your preferred agent may turn out to be a team. Teams are a fast growing segment of the agent market. Many teams simply divide players between buyers and sellers. In this case, your experience would be no different than it would be with a single agent. However, some teams divide players by expertise. For example, a team may have a listing partner (your initial point of contact), a marketing specialist who coordinates the “listing to contract” phase and a contract specialist who coordinates the “contract to closing” phase.
2. Real estate agents are an extraordinarily diverse group representing the entire spectrum of cultures, races, ages and income levels. This narrative adopts the convention of feminine pronouns. It is convention only and should not be interpreted as gender bias.
3. Your agent will add your home to the local multiple listing service (MLS) and, likely, a number of other real estate websites (e.g., Realtor.com, Zillow).
4. If regional statistics indicate that listings in your home’s price range close 100 days after going active, you can expect that phase 1 will last 60 days (contract to close is typically 30-45 days). However, a given sub-market (e.g., a city within a county, a neighborhood within a city, a subdivision within a neighborhood) may be performing far differently than the larger regional market. And always remember that even in the worst markets, people continue to buy and sell homes.
5. For owners of larger homes with lots of personal property and furniture, it may be wise to rent a storage unit until the home sells.
6. Your agent may recommend that you list and sell your home with a home warranty. A home warranty is a separate insurance policy, usually marketed as a closing incentive to prospective buyers, generally covering fixtures and appliances for a limited time-period (often the first year after sale). Home warranties give prospective buyers peace of mind that, for example, if the furnace fails during the first winter, it will be repaired or replaced at little or no personal expense.
7. Most sellers will be simultaneously packing up their current home and readying themselves to move into a new home. On top of that, there may be a new job, a life change (e.g., marriage, retirement), or some other source of stress that prompted the sale in the first place.
8. Social security numbers are required for tax reporting purposes and for ordering lender payoffs.