Knowing why you are selling your home is the first mental step towards actually selling your home. If you have an understanding of why you are selling, then it is easier for you to set the right plan of action to get what it is that you want. The reason for selling is the most important factor in developing a strategy to market your home. Many homeowners think the sales price is the biggest factor to consider when selling a home, however it is only one piece of the puzzle. The terms of the contract are actually more important than price as there are more moving parts to consider which could cause the most amount of turbulence.
Although it is not required, there are times when homeowners find it helpful to obtain an appraisal for their home prior to placing it on the market. Your real estate professional may suggest an appraisal due to the limited number of homes sold within the last three to six months, as not all homes are created equal, especially in areas where your home is not exactly like others within a community. An appraisal will assist in establishing a price to ensure it is not over or under priced, it will also provide insight if there are any repairs that would be necessary to repair that could be issues with an underwriter and lastly, but more importantly, it could aid in the negotiating process as if an low offer were to be submitted. The cost of an appraisal is between $500 and $700, typically dependent on age, size, type and location of home.
A pre-inspection initiated by the seller is optional, however, it highly recommended for homes with a hefty amount of repairs or deferred maintenance as it can shorten the on market time or could reduce the potential for unnecessary chaos or emotions in the transaction due to property condition. A home inspection allows the seller to understand potential repairs that could be concerning to the buyer and but better yet it provides the seller an opportunity to have deficient items repaired before placing the home on the market. By being one step ahead of the buyer, it will give the buyer less to pick on when they are ready to negotiate repairs. Additionally, it always seems, that homes that have been pre-inspected sell faster than homes that haven’t been inspected at all.
Clean and beautifully staged homes that are free of deferred maintenance generally sell for higher prices than homes that are thrown on he market with very little planning. It is a wise idea to walk around the home and envision if you were buying the home, not selling the home. Ask yourself as a buyer, what would you focus on in terms of repairs and deferred maintenance. Your answers are the issues, whether glaringly obvious or not, are generally the same issues the buyer or the buyer agent will focus on while touring your home. Sometimes very minor items in need of repair translates into dollar signs double or triple the price through a buyers lens. A little sweat equity or a few dollars goes a long way in order to boost your potential bottom line at the end of the day.
If you are a homeowner who lives in the Austin city limits, who pays Austin Energy (City of Austin) utilities, who has not completed any energy efficient updates resulting in at least a $500 rebate and your home is older than 10 years old – you may need to have an energy efficiency audit completed on your home and deliver it to the buyer prior to closing. The intention is to disclose the efficiency of your home to any potential buyer so they are able to make an educated decision about purchasing your home. An ECAD audit costs anywhere between $300 and $500 depending on the company hired to complete the audit. The ordinance states the audit must be done prior to closing and disclosed to the buyer. Currently, there are not any mandatory requirements for the seller to make repairs to non-energy efficient items. However, the audit can/will be reviewed by the buyer and the buyer has the right to request the seller to make repairs in order to proceed with the purchase of the home. Before having a company come to your home to complete this audit, please speak with your chosen real estate professional as there are ways for sellers to be exempt from the audit.
Setting the Price
The price is the first thing buyers will notice about the property. Setting the price too high can alienate buyers from the beginning. The asking price you offer reflects how serious you are about selling the home. One of the key factors in selling the home is finding the right price. It seems when you homes are overpriced, buyers see all of the defects in the home and if you are priced at or below market, buyers see the homes attributes and feel comfortable making a reasonable offer.
Factors to Consider
There are several factors to consider when selling a home. The first and foremost is recent and comparable sales in your area (more specifically your subdivision). The market has been constantly shifting so often lately that it is important to look at the last two to three months in order to get a true sense of where the market is headed compared to the previous two to three months. Is the location, condition and presentation of your home hindering or helping your chances of netting an offer? The number of competitive properties currently for sale in your area, days on market and price reductions for competing properties are all analytics to review to make sure you are the most attractive property listed. The price difference ratios between original asking price and the sale price and comparable withdrawn and expired listings and why they didn’t sell should all be analyzed. Lastly under contract properties and their days on market as this is the best analytic a seller or sellers agent could watch as it demonstrates what could be replicated.
Once a list price has been established, several formal documents are required to be signed to place the home on the market. This set paperwork encompasses representation agreements, disclosures and brokerage required documentation.
When reviewing an offer made on the home, keep in mind that you are out to the best price AND the best terms for you. If you focus solely on price, you may overlook terms. This will be accomplished by reviewing and interpreting offers (both price AND terms), extensively vetting the buyers mortgage professional and the soundness of their approval, reviewing both the pros and cons of the offer. Lastly, your agent should be advising how to negotiate and providing suggestions on countering the buyers offer, if it is necessary to do so.
Once a buyers offer is chosen and becomes a binding contract, the real estate professionals job is far from over. The buyer still has their inspection/option period to inspect the property and they have a right to negotiate repairs. As a seller, you have a right to review and respond to the request in one of three ways:
Agree to everything the buyer requests
Agree to some of the buyer requests
Agree to none of the buyers requests
Your real estate professional should discuss pros and cons of each as it relates to your transaction and situation, including if any of the buyers request is out of the ordinary. The real estate professional will have consistent communication with the buyer’s agent, the lender and the title company to ensure all deadlines are met in order to ensure a flawless process through closing.