Seller's Guide
Sell A Home. Step-By-Step
Prepare The House
In order to market your home in its best light, the goal is to begin transforming it into a buyer’s dream home. Begin packing away items that you won’t use again until next year, political items, and family photos. Buyers need to envision their own family living in the home, and psychologically, they will be more drawn to your home if it is a blank canvas.
Take a look at the finishes in the home and start refreshing them. Touch up any paint blemishes, or repaint the interior if needed. Find any trim that is scratched by pets and repair or replace. Clean the light fixture covers, window sills, and vent covers. Shine up the appliance fronts. Clean the oven and the fridge. (Many buyers check inside the oven or fridge to get an idea of how well the home is normally maintained.) Clean the carpets (or be ready to do so just before listing). Tidy up and minimize inside the cabinets, pantry, and closets.
Outside: Check the siding and replace any damaged pieces. Paint any peeling window trim. Freshen up the porch and gardens with fresh blooming flowers.
Your buyers will hire an inspector to check the house out thoroughly. Taking care of all of the little things give the impression that the house has been well cared for. Make sure all of the light bulbs are working and bright. Replace any furnace and water filters that are over-due. Have the chimney cleaned. Repair anything that is broken: ceiling fans, light fixtures, door knobs, garage door opener, etc. Seed and fertilize the lawn. Replace any damaged pieces of siding.
Plan Your Strategy
A good listing agent will keep your sale running smoothly, help protect you from liability, and significantly increase your net profit. You will be entrusting your agent with the task of maximizing your investment – and it’s a big investment – so it is important to choose wisely. Do not hesitate to interview several agents – and let them all know that you are interviewing several agents.
Characteristics of a Good Real Estate Agent: They…
- Have a REALTOR membership and MLS (Multiple Listing Service) membership (Not all real estate agents belong to an MLS!)
- Are local to the area.
- Have a history of quality closings that is documented by reviews, or personal referrals. If the agent is new, they should be training/partnering with an agent who does have excellent history.
- Create a marketing plan that is tailored to your property.
- Are experienced with the type of property you are looking for: suburban, condo, vacant land, new construction, lake front, etc
- Are regularly available to coordinate showings.
- Have excellent communication and keep you in the loop
- Listen to you and Keep your needs as priority
Choose Wisely: You want the agent who is ethical, trustworthy, comfortable to work with, and will reliably make more money for you than you could make on your own.
Every agent you interview will generate a Comparative Market Analysis (CMA) for your house. To do this, they pull records of comparable homes that have sold and determine the market value of your home. In a seller’s market, the market value (the amount the home will sell for), can be significantly higher than the appraisal value (the actual value).
The CMA is to a house what a “Blue Book” value is to a truck, and it works the same.
For example, if you try and sell your truck for $6,000 over ‘blue book,’ you probably won’t sell it. If you post the truck for a little less than ‘blue book,’ your phone will start ringing off the hook.
To achieve the best results, plan to list the home at fair market value to get the best price.
Once you know the market value of your home, you can estimate that the net that you will have at the end.
You should walk away with roughly 92% of the net sale price – minus the 1) amount you still owe on your current mortgage, 2) any liens on the property, and 3) any property taxes owed.
Until you have an offer in hand, that number is an estimate only, so leave some wiggle room for yourself when planning the down payment for your next home.
Know where you are heading, and plan your course to get there. If you are planning to buy a new home, talk to your lender about options to purchase your next home before you sell your current one.
If you prefer to simultaneously close on your new home and your current house, you may want to choose your new home and get an accepted offer on it, before you list.
Talk to your agent about the options that make the most sense for your personal situation.
Time to finish up the home staging and make the home picture perfect. Show buyers how attractive life in this home can be. Use your agent and a few honest and outspoken friends to walk through and offer any last minute suggestions.
If your furniture isn’t ideal for staging the home (does the sofa have brown windmills on it from 1976?), talk to your agent about having the home professionally staged.
The Sale
Prior to listing your home for sale, your agent will complete some paperwork with you that outlines the details of your home, any disclosures you have about the property, some disclosures that the agent has for you, and the listing agreement In the listing agreement, you agree that if your agent brings a valid offer for a specific amount (or more), that you will sell the home.
Once the paperwork is signed, your agent will schedule photos, and have a lockbox and real estate sign installed, usually 1 – 2 days before the listing goes live on the Multiple Listing Service (MLS). Once it goes live, the advertising for your house will be broadcast to dozens of associated websites, and buyers will start taking notice.
Showings can be hectic and stressful the first week after listing – particularly for residential homes listed at market value.
Your agent will reach out and reserve times for buyers to see your home. Keep a calendar schedule (or ask your agent to), so that you know when buyers will be in your home.
The disruption of showings is usually very stressful to children and pets. Even friendly dogs will begin to growl at the endless stream of strangers after a day or two. If you have pets and/or kids who might be stressed by the unpredictable schedule, consider taking a trip for a few days. Consider taking them all camping somewhere where you have reception and internet so that your agent can keep you updated. Or maybe visit a hotel, or theme park, or send the kids to Grandma for a few days.
Bonus: Keeping the family and the pets out of the house will also help keep it tidy for that first rush of showings.
Your agent will begin bringing offers to you from interested buyers.
Review the terms of each offer with your agent, then decide what course of action is right for you: Accept, reject, or counter back.
Continue negotiating until an agreement is reached, or until you decide it’s time to let this one go and try again on a different home.
Inspection: Once an offer has been accepted, the buyer will schedule a general inspection. The inspection usually lasts 3-4 hours and covers everything from the rooftop to the crawlspace.
The buyers will receive a copy of the results from the inspector to review. From there, the buyers may 1) request additional inspections by licensed specialists (plumbers, electricians, roofers, etc), 2) Request repairs (or credit for repairs), 3) Accept the house condition ‘as is,’ or 4) Back out of the offer.
If the buyers back out, your agent will work to help you quickly secure a new offer, if you don’t already have a backup offer in place.
Appraisal: If your buyers are purchasing the home with a mortgage loan, their lender will order an appraisal to ensure that the buyers aren’t paying more for the home than it is actually worth.
In most cases, the appraisal value will not be a surprise to you or your agent, and you will already have a plan in place in the event that the appraisal comes back ‘low.’ (Which is common in today’s market.) Either 1) the buyers will need to come up with the difference in cash (common for high demand homes), 2) the price will need to be dropped to match the appraisal (more common in low demand homes), or 3) the offer will be cancelled by mutual agreement. In the very rare circumstance that an appraisal is clearly way off base, either party can pay to have a new appraisal completed.
After buyers sign off on the inspections, and the lender signs off on the appraisal, then it is time to proceed toward closing.
From here forward, your agent will coordinate closing with the lender, buyer’s agent, and the title and escrow companies.
There should be a clear idea on what the actual closing date will be, so it is important to finish packing and moving so that you are out of the house by that date (unless you have a different agreement with the buyers).
Closing
In most cases, the buyer will get possession of the house as soon as the title change is recorded with the county on the day of closing. Plan to be completely moved out by closing day. Discuss with your agent where to leave the keys.
During the sale process, there will be a trail of occasional papers to sign from your agent.
Then comes the final “signing” where you sign paperwork stating that you are paying off your current mortgage, and that you are transferring title to the new owners.
This final signing is usually done at the title company, and usually takes about 30 minutes. A title agent will talk you through the documents, however, if you would like to preview them in advance, let your agent know, and they will send them over.
Once you’ve signed the papers, there is a behind-the-scenes process that takes about 3/4 of a business day to complete. Finally, title will record, and the property will officially be sold!
Once all of the paperwork has been processed and the title is ready to transfer ownership, the escrow company will release the funds to you.
