BEFORE THE FOR SALE SIGN GOES UP
- Assess the Financial Impact of Selling If the property has been your primary residence for 2 of the past 5 years, you will be exempt from paying tax on the first $250,000 of capital gains or $500,000 if you are married. Verify with your lender there are no pre-payment penalties on your loan and contact your accountant.
- Timing The real estate market tends to be the most active in the spring and fall. Summer months tend to be sluggish. However, in today’s challenging market, sometimes we have to throw the normal out the window. Sellers always ask, when is the best time to sell? The answer is when no one else is!
- Fees to Sell Transfer taxes, inspection costs, and commissions range between 7-8 percent of the total sales price.
- Inspections Have termite, sewer line, and general home inspections done by qualified professionals in advance. Consider conducting a “pre-inspection”. This gives the homeowner opportunity to correct items that will come up on the report. The less that is on the report, the better. Some repairs are worth completing in advance to avoid a long list of to do’s, the less repairs/action items that need to be addressed, the more a home will sell for!
- Preparing Your Property Remember what they say about first impressions. Whatever you spend preparing your home for sale, you should double your investment on the return. An agent with a great designer/stager should guide you on what’s important to buyers and items to focus on. Again, the “turn key” homes with little to do sell for the most.
- Paint Fresh paint has a tremendous impact on overall appearance and is one of the best investments you can make. Let your stager chose the colors for the broadest appeal with today’s buyers.
- Landscaping Remove overgrown shrubs, trim trees, plant flowers to enhance curb appeal.
- Moving Begin packing, sorting, and making your moving plans. The majority of sellers make arrangements to move out prior to their house going on the market. This allows sufficient time (and least hassle) for painting, staging, and preparing the home for sale properly. If the home is unoccupied when listed for sale (97% in Oakland are) , it is of great benefit to be shown by agents to prospective buyers at a moments notice, any day at any time.
- Staging Thoughtful staging of a property sells the property faster and for a lot more money by reaching potential buyers on emotional and practical levels. Through strategic placement of furniture (showcasing the highlights and camouflaging the negatives) and the application of color, accessories, artwork and greenery, potential buyers have a stronger emotional response to a home, and can easily see themselves living there.
THE DO'S AND DON'TS OF HIRING AN AGENT
You’re paying for service – make sure you get it!
- The marketing your listing will receive varies greatly depending on whom you hire. Hiring a marketing specialist who provides a stellar presentation of your home is crucial to getting your home sold for the most money.
- Select an agent who seasoned and experienced. Selling a home is a big deal, and the agent you hire to represent you can make a huge difference in your outcome.
- Self designated claims such as “Top Producer” or #1 in your area” mean nothing. The reality is most are untrue or outdated. Hiring an “area specialist” is not a great idea, they don’t have the ability to lure buyers from other neighborhoods. Lastly, agents who service many listings are not your best choice and typically have a difficult time giving your listing the required attention.
- Many years in the business or a long client list do not guarantee satisfactory service.
- What matters most is the agents relationships/network, negotiating skills, and experience!
DON'T FALL FOR THESE TRICKS!
- The inflated price This is a lesson many sellers learn the hard way. In order to secure your listing, an agent suggests a much higher price than anyone else. Don’t be fooled in to believing they can get more for your home. Once the listing is secured, they feel they will eventually convince you to reduce the price. The buyers and the lender (not the agent) will determine your home’s value. Select an agent based on service, and decide on a list price together.
- I’ve got a buyer An agent states they have a buyer for your property that is not currently listed for sale. This is a common ploy to see if you would consider selling so they can pursue your listing. Tell them you have an agent and any offers must be presented through them. Chances are you’ll never hear from them again.
- The double end The agent you listed with writes an offer for a buyer they represent. Watch out! The agent is likely concerned about collecting the full commission (known as double ending) instead of getting you the highest price. Your agent should solicit as many offers as possible. Even though the practice of an agent representing both buyer/seller on a transaction is legal in California, in my 18 year career I have never done this and will represent only one side (buyer or seller) of a transaction.
- Clarifications to make in the listing agreement Make sure you understand all points of the listing contract and receive a copy. A term of 180 days is usually sufficient for a home in the current market.
- A reputable agent will provide in writing: You may cancel the listing with no further obligation if you are not satisfied.
- Brokers’ open house An open house should be scheduled for the Realtor® community. This exposure is critical and gives the agents a change to preview the home for their potential qualified buyers.
- Sunday open houses Make it convenient for people to view your home who are otherwise unavailable during the week. Remember, open houses don’t sell houses – agents do!
- Lockbox A lockbox enables the buyer’s agent access to your home without having to make an appointment with the listing agent. The benefit is having your home available for showing anytime and at a moments notice. Each entry is recorded for follow up and security measures.
PRICING FOR SUCCESS
- Your property is worth what a buyer is willing to pay for it. If your property is priced unrealistically, the best marketing and exposure will not overcome that. The price you select will determine the length of time it will be on the market. Overpriced houses often linger on the market, ignored by buyers and agents who have moved on to the excitement of newer listings and reasonable sellers.
- A smart seller knows realistically pricing from the beginning yields greater results. Chasing buyers with price reductions weakens your position in negotiations.
- How do you know if you are priced right? Lack of activity most often stems the price. Buyers won’t bother to see or make offers on property they believe is unrealistically priced. It is important to know what your competition is and whether you are positioned appropriately relative to other listings and sales in the area. The price you paid for your home or the proceeds you want from the sale have no effect on the value of your home. Bottom line – you will sell for what a buyer (and lender) are willing to give you!
AVOIDING LEGAL TROUBLE
The devil is in the details.
- Never show your own home to a buyer It is entirely possible to misrepresent or over-state something that could get you into trouble. We are in a litigious world these days – you have to be CAREFUL what is said and how!!
- The Transfer Disclosure Statement and Seller Property Questionnaire. You must disclose anything you are aware of that could materially affect the decision to buy your home. To limit your chances of a lawsuit DISCLOSE, DISCLOSE, DISCLOSE, including past repairs. Don’t cover up anything and be honest about the condition and any problems with the property. Sellers often feel many disclosures will scare buyers off. The truth is buyers are more comfortable dealing with an honest seller.
- Natural Hazard Disclosure Report. This report is prepared by an outside company and discloses possible natural hazards such as landslides, fires and earthquakes.
- Preliminary Title Report The Title Company provides this report which identifies potential problems include liens, unpaid taxes or additional property owners. Everyone on title must sign all contracts unless power of attorney has been granted to someone else.
- Provide Reports Up Front In Oakland and surrounding area, it is customary to provide potential home buyers a home inspection, title report, termite report, sewer lateral report and all seller disclosures. This detailed information package gives buyers a great idea of what your home really is and also greatly reduces the chances of them coming back and saying that you didn’t disclose something. This standard also alleviates an additional re-negotiation of price to cover the costs for repairs needed.
CHARACTERISTICS OF A STRONG OFFER
- Before an offer is accepted, insist on: Down payment and closing funds verification Full loan approval and personal contact with lender All decision makers have seen the property
- Terms are as important as price. A more qualified buyer is sometimes the better choice even if the offer is lower. A buyer willing to offer a higher price may intend not be a committed buyer and will end up canceling escrow. Negotiate the time frame for each contingency as short as possible to know quickly if the escrow will proceed and close. A smart agent will have a sense of the buyer and their level of motivation.
- Offers are confidential. The sales price is not made public until after the close of escrow.
ESCROW AND CONTINGENCIES
- Inspections The more inspections and information provided to the buyer up front, the less likely they are to come back and claim they weren’t aware of a problem or ask for credits for previously undisclosed repairs.
- Appraisal and Loan If the buyer is securing a loan, keep contingencies as short as possible. Your home must appraise for at least the purchase price, if not can be re-negotiated with the buyer.
- Retrofitting Various governments impose requirements that must be met prior to transferring real estate. These include strapping the water heater, functioning smoke and carbon dioxide detectors, sewer lateral compliance, etc.
- What stays Unless specific items are excluded, you must leave window treatments and hardware, light fixtures, doorknobs, built-in appliances or cabinetry, and anything fastened to the wall. If you are planning on excluding any items, let buyers know before they become attached to it. Clarify in writing all items during negotiations to be sure there are no misunderstandings.
- If escrow is cancelled Make every reasonable effort to resolve issues with the buyer to prevent the cancellation of escrow. Starting the process over doesn’t guarantee you will have an easier time the second time around. If the buyer cancels after the contingencies are removed in writing, you may be entitled to their deposit.
BRINGING BUYERS TO YOUR DOORSTEP
Whatever the market conditions, a thorough multi-media marketing campaign with professional photography is crucial. Many agents claim to have a “unique” marketing strategy. There is no secret strategy to getting a home sold. Agents can all do the same things to market your home. The question is “will they”? The listing agent pays for advertising up front. The most effective marketing tools are:
- Internet Exposure 98% of buyers utilize the internet when searching for a home. In our ever-changing real estate market, the convergence of world-class photography, stylish presentation, and wide spread internet distribution will equate to the highest sales price possible.
- The Multiple Listing Service Your listings should be featured in the local MLS and, as well as on the Greater Bay Area MLS system accessed by real estate agents from San Francisco to Monterey.
- Presentation of Property It is essential to have your home portrayed in its best light. Some homeowners spend several thousand dollars to prepare their home for sale with minimal effect because of inadequate marketing strategies, limited exposure, or mediocre presentation.
- Networking Directly networking with other agents, company executives from various industries, business owners and others is very effective. The days of putting a sign up front, placing the listing in the MLS and having it sell within the first week are a thing of the past, at least for now.
- Common Advertising Mistakes Be sure to list all the important features buyers would be intrigued by in order to get them excited about seeing your home. This doesn’t mean overstating your home! This sets buyers up for disappointment – your home is what it is and it’s and not what it’s not!