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The Listing and Selling Process: Facts to consider
Are you considering selling your property? Are you selling for the right reasons, at the right time, and under the right circumstances? Do you need to sell, or just want to sell, or just “testing the market?” Are you serious about selling? Are you prepared to deal with the myriad of preparation, documentation, interactions, negotiations, legalities, and other potentially stressful, risky, or costly factors? Have you put your motivation, emotions, needs, wants, expectations, and goals in their proper places? Are you positioned to realize the best possible result from the process and to obtain the best possible proceeds from a sale with the most favorable terms?
If done correctly, the selling process can be smooth, predictable and controlled, and can result in a timely sale that accommodates your needs while yielding the best possible results, both financially and contractually. Done incorrectly, it can become a nightmare, and possibly even prove to be risky or costly. Be sure to enlist the services of experts in their fields as you need them in the process, and a critical central figure in coordinating this process (and in protecting your interests) is your Realtor® from the [HOLT] group.
For Sellers, it is important to deal from a position of strength where possible, by presenting a property that's attractive, desirable, and free of any negative implications, and by projecting an image that portrays the Seller as a credible, informed, willing, able, and cooperative party with whom Buyers would likely interact on a reasonable, business-like basis.
When selling your house, price, condition and exposure are usually the three most important factors (aside from the familiar “location, location, location” axiom.
Price
A home is ultimately worth what someone is willing to pay for it, not necessarily what a Seller wants for it. Everything else beyond that is just an estimate or opinion of value. Your asking price is typically based on a Comparative Market Analysis (CMA), and may also be based on an appraisal, both of which represent estimates of the value of your house at a given time and under specific circumstances, using different but related information sources. As an optional step, you may elect to have a certified appraiser perform an appraisal. When estimating your home's value, they take into account many factors, including square footage, construction type, style & quality, the year the house was built, the design and floor plan, the neighborhood, availability of transportation, local shopping, schools, lot size, topography, view, landscaping, and any additions, updates& upgrades. Appraisal costs will typically be a few hundred dollars, involving many hours to research and complete, but usually with just an hour or two actually on the premises.
Typically, your [HOLT] Group Realtor® will perform a comparative market analysis (CMA), usually when you list your house with them. They obtain current/recent data for several homes in your area with comparable square footage, land area & characteristics, features and amenities. This correlates your house to other very similar homes that have sold in your area. This is a free service as part of the listing process, providing you with a frame of reference with respect to properly pricing your home.
It's important to note that an agent for a buyer who may be interested in your house would perform a similar CMA for that buyer (most likely using the very same MLS data), and based on its results, would advise their buyer/client as to (a) whether the property appears to be overvalued, undervalued, or appropriately priced, and (b) ranges of values within which offers to purchase might be reasonable, well-received and successful, based on the buyer's own needs and circumstances, on the buyer's and their agent's interpretation of the seller's situation, needs & motivation, and on property status & condition.
When determining the listing price for your property, your Holt Group Realtor® can help you to view your property as buyers (and their agents) would. Regardless of property location, condition or features, you'll want to foster an overall impression in the buyer's mind that your property represents a “good value”. Overpricing tends to discourage many buyers from making any offer at all, because they feel it would be a “waste of time” or “insulting to the seller” to offer what they think the property is really worth. This could easily cost you a sale that may have materialized if the buyer had felt more inclined to “go for it”. Conversely, under-pricing can invite “low ball” offers, since buyers may presume (a) that there may be significant problems associated with the property, such as major repairs needed, infestation, contamination or environmental concerns, neighborhood/location issues, etc., or (b) the seller is highly motivated, possibly even “anxious” or “desperate”, and vulnerable to any offer that “gets them out”. But worse, under-pricing leaves money on the table that should be in your pocket!
The market is always changing, so it's important that your asking price is based on a recent appraisal and/or comparative market analysis. Your Holt Group Realtor® can help you price your house so that (a) it will be attractive to the broadest possible range of ready, willing & able buyers, (b) it will bring offers that closely reflect actual market value, (c) it will be competitive with other similar properties currently on the market, and (d) it will yield the best possible proceeds from the sale.
As a final note, if you are evaluating more than one real estate agent for listing your property, be aware that you may receive some unexpectedly high “estimates of value” and corresponding “suggested list prices” from overly zealous agents who either (a) don't understand the market and its dynamics, or worse, (b) want to “buy” your listing by leading you to believe that they can get a higher price for you than the competition can. This latter tactic is intended to get you to “sign on the dotted line”, creating a binding & irrevocable listing contract between you and that agent's firm. Then, after weeks or months of little or no interest/activity, you are asked to reduce the price to something closer to the actual market value (where it should have been priced in the first place). However, this typically means that you would have lost the “window of opportunity” as a new listing on the market; other agents would already have disregarded your “overpriced” property, and would not necessarily be inclined to show it to their buyers. Unless you're prepared to wait for the market to “catch up” to your elevated price, don't fall into the overpricing trap; while you're waiting, your expenses and mortgage payments continue, and the price of your next house may be escalating beyond your reach…
Condition
Correcting minor/cosmetic defects before showing your house can help avoid losing buyers who might be unduly influenced by such details. In a buyer's market (when inventory is high and/or buyer competition is low), buyers feel free to be more discriminating & selective, and can be quickly “turned off” by things that could have been easily corrected by simple repairs. The better the condition of your house in relation to your asking price, the greater buyer interest and appeal it will have, the faster it will sell, and the more likely it will be that it sells at or very near your asking price. Don't discount the potential impact of “negative perceived condition”. While a property that's immaculately clean, meticulously maintained, tastefully decorated and loaded with upgrades & amenities certainly bolsters appeal and perceived value, even the slightest negative factors (dirt, stains, offensive odors, leaks, broken items, chipped/peeling paint, neglected landscaping, etc) can significantly influence a buyer's assessment of acceptability and value, quickly negating many of the “positives” your property has to offer. Something as minor as dirty windows or overgrown foliage inhibiting the impact of a spectacular view could subliminally diminish an offer (if there is one) by thousands of dollars, when a few cents worth of window cleaner or a little trimming effort could have preserved/reinforced the perceived value.
Exposure
Once your house is correctly priced and in its best presentable condition, it's time to tell the world about it. You might have the most beautiful home at the best price in town, but if no one knows about it, or if it's not marketed effectively, neither price nor condition will matter! Your Holt Group Realtor® can broadly expose your home through advertising, promoting in area specific real estate publications, by listing it on MLS (multiple listing service) & through the RE/MAX.net strong internet presence. These techniques coupled with expert understanding of local area, are just part of the service and benefit derived from having your own personal professional Holt Group Realtor®. Your Holt Group Realtor® has another significant “exposure advantage” that other area agents can only envy. Due to an integrate network of contacts we are able to enlist the service of hundreds of real estate agents through out both northern and southern California , as well as Las Vegas. Because we offer a very attractive referral fee to these agents we are able to touch the largest and most qualified group moving into the greater Phoenix area. When these people are ready to either move to or invest in the Phoenix market they are directed to The Holt Group. We can then introduce them directly to your home provided it is what will meet their needs. A final word about “Service Level”… Remember that real estate firms are businesses just like any other, complete with expenses, cash flow, P&L, license fees, insurance, and many other familiar operating considerations. Although ongoing costs such as advertising, for example, take big bites out of operating budgets, the sole income source is sales commissions (with a percentage to listing or selling agents, and a percentage to “the house”). Marketing, transaction management, and client service can consume significant resources (time and money), and we strive to provide the highest levels of professionalism and client support & service in return for commissions we earn. In short, you get what you pay for, and we always deliver, meet your needs and exceed your expectations! Why use a Realtor®?
Can you actually be losing money when you think you're saving money? Yes, and it typically happens because FSBO (For Sale by Owner) sellers unknowingly “leave money on the table”… equivalent to “giving it away”. This unfortunate scenario can take many forms, but is frequently caused by sellers (a) having underestimated their property's value, and selling below fair market value (b) having overpriced their property and squandering time & money trying to find someone willing to pay above fair market value (which rarely happens), (c) not having access to massive pools of potential buyers via mechanisms like MLS (Multiple Listing Service), and Realtor ® referral networks, (d) lacking the marketing expertise and/or exposure mechanisms needed to let the world know you exist, or (e) lacking the necessary negotiation skills to establish the best possible contractual terms for all parties while obtaining the best possible price for the seller. There are many more ways in which FSBO sellers have notoriously given their buyers “cash gifts” at closing, but suffice it to say that it's the rule rather than the exception, by far, and the sad part is that they usually don't even know it happened, or how much was sacrificed. We've all heard stories about lucky homeowners placing a “For Sale” sign in the yard, opening their front door on a Sunday afternoon and receiving a full-price offer at the end of the day. If you're thinking of selling your home, you might be lured by these successful FSBO stories. After all, you reason, why pay commission to a Realtor®, when you could keep the profits all to yourself? But the reality of the FSBO process is far less rosy than you might think:
Advertising works best when it's run frequently over a period of time. Most FSBO sellers, however, try to cut costs by running a single ad here and there, usually not often enough to attract the attention of many buyers. The Holt Group Realtor®, on the other hand, advertises their listings often in print media, in electronic media, and in the MLS, which is only available to licensed Realtors® and brokers
Most homeowners believe their house is worth more than it really is. Even if you study comparable homes and try to discern the value of yours, it's still a time-consuming process and an amateur's guess. If it's not competitively priced, many prospects will simply bypass your home. If you later lower the price, you'll have to advertise again, at more cost to you.
Over the years, we can become accustomed to our home's imperfections, to the point where we're not really aware of them anymore. A Realtor® can see a house the way a prospective buyer would. He or she may suggest some minor improvements, like fresh paint, new flooring, some minor but very visible repairs, or furniture arrangements that could help your home sell faster and for more money.
Realtors® will qualify prospects before showing them a home. A FSBO seller is at the mercy of everyone who calls or knocks on the door. You may spend valuable time giving free tours to curiosity seekers or prospects who cannot afford your house. Worse yet, you could be making yourself and your property vulnerable to possible hidden motives. This is not the place to convey such horror stories, but they are more commonplace than you might think.
Prospects often shy away from FSBO homes. Some fear legal problems because of the intricate paperwork involved. Some may worry the seller is not disclosing everything about the home's condition. Others may simply feel uncomfortable negotiating directly with the owner. FSBO sellers face the same disclosure requirements as everyone else. Working directly with buyers (bypassing Realtors®) does not remove any obligations, risks or potential liability; the courts won't care whether you were a FSBO seller or not.
Many FSBO stories, unfortunately, don't have happy endings. After a considerable outlay of time and money, sellers often list with an agent in order to get their house sold. Unless you have a sure buyer – a cousin or coworker, for instance – consider listing your house with a Holt Group Realtor® right away before it grows market-weary, and before you expend time & money that can never be recovered.
It's really a pretty simple concept. Anyone can put something up for sale, and anyone can get someone to buy it. But with the complexity and legal ramifications involved in real estate transactions today, few have the training, skills, expertise, and experience needed to (a) market effectively, (b) tap into large buyer pools, (c) motivate/excite buyers, (d) negotiate and close, (e) protect the interests of their client, (f) manage the overall transaction process, from listing to closing, (g) foresee, recognize and avoid risks, errors & pitfalls, (h) assure that all current legal & contractual requirements & considerations are addressed, and (i) yield the best possible result (contractually and financially) for the seller.
That's what The Holt Group Realtors® do. We do it every day, and do it well. And we've invested hundreds of hours and thousands of dollars in formal training (and licensing) to be qualified and proficient. We’re also required to continue this educational process (an ongoing time & financial burden) in order to retain our licenses and to keep abreast of the ever-changing laws & requirements related to real estate. This enables The Holt Group Realtors® to provide an extremely valuable service, without which sellers (and buyers) can be at significant risk and/or may consummate a “deal” that is not in the best interest of either or both parties. To use a Realtor® or not… the decision is not about money… it's all about risk management.
The Offer
Once a buyer makes an offer and you've accepted it, you have imposed specific contractual responsibilities and obligations on each other. There are two standard contingencies that ensure both parties are covered: Financing – This makes the sale dependent upon the buyer's ability to obtain a loan. If they cannot, the buyer can be released from the contract, and the seller is free to consider & accept offers from other buyers.
Inspection – This entitles the buyer to conduct independent, professional inspections and evaluations of the property to their satisfaction. During the agreed inspection period, the buyer may back out of the deal without penalty based on certain inspection findings, but once this period elapses, the buyer may forfeit any earnest deposit if they back out of the deal for any reason not stipulated/permitted in the contract.
The Purchase Agreement
The purchase agreement also includes the seller's responsibilities, such as passing clear title, maintaining the property in its present or better condition until closing, and making the agreed upon repairs to the property prior to the buyer's assuming possession. Most sellers prefer to make necessary minor repairs prior to putting their house on the market, which can help justify their asking price. Most purchase agreements include the buyer inspection contingency, whereby a buyer can back out if there are numerous and/or unacceptable defects found. It can be in a seller's best interest to make the repairs before listing the house because buyers frequently use “needed repairs” situations to negotiate a lower price.
The “Contract”
All of the documents involved in the transaction collectively represent the terms of a “contract”, legally binding on all involved/named parties (principals). Together, with the Real Estate Purchase Contract (the primary “offer” and “acceptance” document), all required Disclosures, various Addenda, possible “counter-offers” and their attachments, and other related supporting documents, a “contract” can exceed 25 pages of fine print and boilerplate legalese language, with your initials and/or signature required in many places throughout. Although it's all designed to protect the interests of all principals, most people are not equipped to cope with its complexity, and it's possible that important details can be overlooked, resulting in costly mistakes or legal liability. Your Holt Group Realtor® is trained to deal with all of it, and is insured against errors and omissions (which you are not). This consideration alone is sufficient cause to regard sales commissions as being “the best insurance you can buy!”
Disclosures
We've all heard the old saying, “Buyer beware.” But in today's litigious climate, sellers can't afford to take a purely passive approach to real estate defects. Even an “as-is” contract won't protect you if you knowingly conceal information from a potential buyer. If you're aware of a problem with your property, you have an obligation to disclose it, or face the possibility of costly legal claims, months or even years down the road! What kinds of problems should be disclosed? Anything that's “material”… that is, anything that might make a difference to the buyer, with respect to their “buy” decision, value determination, or intended use of the property, to name just a few. Be sure to disclose in writing such items as:
Plumbing, electrical or other “systems” defects
Safety concerns or potentially hazardous conditions, such as abandoned wells, lead-based paint, aluminum wiring, asbestos insulation or ceilings, mold or mildew, etc
Additions, renovations, or alterations made without building permits
Encroachments, walls, fences, structures, and other items not within property boundaries or within required setbacks
Structural issues, such as foundation/slab cracking, settling, sagging, etc
Water/moisture issues, such as roof leaks, basement flooding, faulty grading/drainage, etc
Ask your Holt Group Realtor® about other legally required disclosures in this area. Remember that your best protection against future claims is always a full and honest disclosure, and be sure that all disclosures are in writing, even if you also verbally discuss a matter with the buyer in person. Your High Valley Realtor® can assist you by providing appropriate disclosure forms as part of the listing process, assuring compliance with applicable codes, regulations, statutes and documentation requirements.
Preparation
First impressions are extremely important when you're trying to sell your property. A first impression is exactly that… a one-time opportunity… there's no such thing as a second first impression. You want a good impression to greet and persist with potential buyers, not just from the street, but also throughout your property. There are many quick, easy and inexpensive things you can do to assure that a buyer's perceived value will match or exceed actual market value, and/or support your asking price, resulting in a timely sale. Your Holt Group Realtor ® can provide you with guidance & recommendations for things you can easily do (usually at little or no cost) to greatly enhance the all-important “first impression”, overall appeal, and the ultimate salability of your home
Have your lawn, foliage, plants and landscaping well-groomed, making the property appealing and inviting. Mowing, pruning, weeding, and trimming cost virtually nothing, but can contribute significantly to the overall impression that a well-maintained yard & landscape implies that the same is true for the house as well.
Eliminating/repairing peeling & chipped paint also contributes to good impressions. If your house was built before 1978, federal law requires that the seller complete a lead-based paint disclosure statement for the buyer. You may or may not know if such paint exists on your property, but you could choose to have an inspection done beforehand, and provide the results to the buyer, which would help to assure them that no such “surprises” await them. Such voluntary “up-front” disclosures can boost a buyer's trust in the seller and confidence level in the property's status/condition, further increasing the likelihood that an offer may result. Making sure that your house is clean & tidy before showings can make all the difference in the world. Pay special attention to all windows (inside and out), and everything in the kitchen and all bathrooms, since these are areas where buyers tend to make significant value and acceptability judgments.
Establish an inviting and comfortable ambiance. Soothing, pleasant but light aromas can help make a house feel more like a home. The sense of smell can greatly influence a home's appeal, with stimuli such as cooking and baking, fresh, clean air, floral scents, mild incense, potpourri, and other subtle aromatic items. Avoid harsh chemical & medicinal smells, eliminate offensive odors (pets, tobacco, etc) and pay special attention to bathrooms. Also, soft background music can subliminally influence a buyer's “comfort” level, making it feel warm, cozy, secure and “homey”. These small touches can make a big difference!
Disconnect Your Emotions
You'll often find that when Realtors® talk about “buying”, they'll refer to the purchase as a "home." Yet when selling, they'll refer to it as a "house." The reason is that buying real estate is often an emotional decision, whereas selling requires you to remove emotion from the equation. Think of your house as a marketable commodity. Property. Real estate. Your goal is to get others to see it as their potential home, not yours. Failing to recognize this distinction can create a situation where it takes longer to sell your property. Make Your Home Anonymous
Consider a new subdivision with many new homes being offered by a volume builder. What you'll typically find are some tastefully furnished models that anyone could live in. They are “generic” or “anonymous”, with nothing that feels like “personal” items. There may be "personality", but no person. You’ll want to make your home "anonymous" so that buyers will feel that they've walked into their potential home, not visiting or intruding into someone else's personal space. Minimize your own expression of “self” by putting away family photos, sports trophies, collectible items, knick-knacks, souvenirs and the like, all of which can be distractions from what you want them to really see… the home itself. Don't just stash such items in a closet or storage space, because another important part of preparing a house for sale is to minimize "clutter.”
Dealing with Clutter
This issue can be difficult for sellers because of emotional attachment to virtually everything in the house. Years of living in the same home allows clutter to accumulate in ways not obvious or objectionable to sellers, but it can dramatically affect how buyers perceive the home. Over time, clutter collects everywhere… in drawers, closets cabinets, garages, attics, basements, storage spaces, sheds & barns, porches, workshops, on shelves, counter tops, floors & walls, tabletops, window sills, stairways, to name just a few. It can consist of excess or tightly arranged furniture, accumulations of personal memorabilia, souvenirs, knick-knacks, or simply miscellaneous “stuff”.
To minimize any sense of confinement and promote a sense of openness & spaciousness, you'll want as much clear/open space as possible, which means eliminating many such items. Be objective, and let your holt Group Realtor® assist you in seeing and evaluating your home as buyers will. Here are some examples of areas where you should address the “clutter” issue:
Kitchen
Clear the counters. Everything… toasters, blenders, can openers, everything. Put all such items in cabinet & drawers and take them out only when needed. If you find that you don't have enough cabinet/drawer space to store everything, re-arrange or clear them out as needed. Dishes, pots, pans & utensils that are rarely used should be neatly relocated in a separate storage area. Why all the fuss? Buyers will open your cabinets and drawers, especially in the kitchen. They'll want to see if there's enough room for their "stuff." If your cabinets, pantries & drawers seem jammed full, it creates a negative impression, diminishing any sense plentiful storage space. If you have a "junk drawer," eliminate the junk. Do this with every cabinet, drawer & kitchen space. Let buyers find an abundance of extra space for “their stuff”.
If you have large amounts of foodstuffs crammed into the shelves or pantry, begin using them – especially canned goods – they're heavy and you don't want to be lugging them to a new house anyway – or paying a mover to do so.
Under the sink is important too. Make sure this area is as empty (and clean) as possible. If there are any tell-tale signs of water leakage, take care if it now.
Closets
Closets are very efficient clutter gatherers – boxes full of “stuff”, rarely worn clothes & shoes, you name it. Do without these items while marketing/showing your property, as they can create the illusion that “the closets are too small”, or “there isn't enough closet space in this house”. Furniture
It's common to have too much furniture in certain rooms – perhaps not too much for your own lifestyle, but enough to diminish the illusion of space that buyers want to feel. Consider re-arranging or eliminating any pieces that you can live without, with the intent to create an impression for the buyer that “there's plenty of room for our stuff here”. Storage Areas
Closets, storage rooms, garages, attics, basements, cabinets, lockers and sheds accumulate not just clutter, but junk as well. Such areas should be as empty as possible, giving buyers the impression that there's more than enough extra storage space available for their needs. Is it time for a yard sale? Other Issues
There are many places on your property that may need a little extra attention and TLC in preparation for listing, showing and selling. Every situation is different, but keep in mind that sometimes the tiniest detail can “make or break” the likelihood of getting an offer. Consider objectively evaluating (and possibly correcting or improving) the condition, appearance, impact, functionality and appeal of the following: Plumbing Fixtures – toilets, faucets, sinks, showers, tubs, sprinklers, etc
Electrical – fixtures, chandeliers, switches, outlets, bulbs, fans, etc
Environmental – heating, cooling, ventilation, air & water conditioning, etc.
Appliances – Refrigerator, dishwasher, disposal, washer/dryer, compactor, microwave, range/oven, etc.
Surfaces – ceilings, walls, art niches, steps/stairways, etc.
Floors – carpets, tiles, wood, inlays, etc
Openings – windows, doors, skylights, etc.
Interior – odors, confined/cluttered areas, dark areas, etc
Exterior – siding, roofing, landscaping, sheds, pets, foliage, trimming, etc.
Street – curb appeal, front door/entry, driveways, sidewalks, etc
Don't leave anything to chance… if it's something you would notice when looking for your new home, now is the time to acknowledge and deal with it… |
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