How To Sell Your Home (Part II)
This is a 13 step list of everything you’ll need to consider before selling your home. If you missed Part I, check my blog at?https://www.luxurypnw.com/how-to-sell-your-home-part-i
Most people who make the decision to sell have only gone through the process a couple times or sometimes not at all. It’s a journey, and if you’re anything like me, having a bullet pointed list of items to review makes life a lot easier.?
Regardless of why you’re selling, you’ll be in good hands following along through Part II below.
7. Set Your Listing Price & Review Documents & Instructions
Pricing
An agent that doesn’t bring all their expertise to developing a pricing strategy to your meeting, isn’t the right agent. Every homeowner receives general market values from various resources such as Zillow, Redfin or Realtor. Those are all estimates because they haven’t been inside your home. A full-time agent knows the area, has reviewed similar sales nearby and has an opinion on value. Every Realtor is going to differ slightly on value, just as an appraiser does. The key is to price it to move within the first 30 days or less.?
Every day, homeowners make the mistake of pricing high, then letting it sit through price reductions. Does that strategy work on a car lot??The same thought process is comparable here. Buyers smell potential desperation and the last position sellers want to be in, is desperate. When your home is priced well against the competition, it actually generates more interest, and often garners offer over asking in a stable market. Buyers agents know it’s priced well and buyers see a reasonable ask. You’re either going to excite the market with your listing, or leave them scratching their head.
One final thought is about appraisal. Unless the buyer is cash or more than 50% down, they’re likely required to have an appraisal. The lender and underwriter will review that appraisal, and if the purchase price exceeds appraisal value, a renegotiation will ensue. Reconsideration of value is an option for agents to pursue but it’s often challenging and time consuming. Set the price right, and you’ll have success on the market.?
Listing Package
Your agent will generate a package of documents which should include a listing agreement and many state mandated disclosures that accompany your agreement. You will agree on a commission, duration of listing, and complete your seller property disclosure statement. Accuracy and transparency is critically important on each document. Lastly, if your community resides inside of a homeowners association, you should review any rules or restrictions or pending assessments from your HOA.?
Showing Instructions
This is the step to discuss showing availability and how you want those showings performed. Buyers agents will be requesting appointments, and your agent should be connecting with you to confirm. Discuss important details like access, pets, alarms, showing rules, etc. Also discuss the lockbox for agent access and whether to place a sign in the yard or window. Agents should provide you with a minimum of one hour notice of showings in case you are home.
8. Listing and Go Live
Your home is ready to go live. Your agent should have every detail about your home from previous visits, and all the marketing materials ready. The marketing description should reflect your homes best attributes and evoke an emotional appeal to buyers. You purchased your home for a reason, so someone else will to. Find those best features and promote them. Photographs, video, or virtual tours should all be accurate and not project a false sense of space about the home. ?
Once the home is live to the market, be prepared for calls and texts and know that strangers will be walking through your home. Make sure your valuables are secure. Agents should be leaving business cards and will lock up before departing.?
9. Offer and Negotiation
Congratulations, you have an offer! Look to your agent to distill the important details into a simple summary for you to review. Remember, it’s more than about just price. Here are some very important considerations to think about.
A critical detail many listing agents fail to mention to sellers, is once you sign/execute a buyer’s offer and return it to the buyer’s agent, your ability to exit that agreement is nearly impossible, and at best painful and expensive if you change your mind. The buyer may even sue for specific performance if they want to force you to sell, if your plans change. Be confident in your actions and follow through on your contractual commitments.?
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10. Calculate Seller Closing Costs & Taxes
Selling your home comes with your own set of costs associated with the sale. In Washington state I tell my clients to budget 9%-10% total depending on the price of the home.?
The above costs are generally the major expenses when selling your home. Another consideration is taxes. Most sellers won’t have to pay capital gains on the sale of their primary home, if they lived in the home 2 out of the last 5 years. If you sell before that, or realize more the $250,000 in proceeds as a single person or more than $500,000 as a married couple, capital gains rules will apply. Consult your tax professional on those implications and how best to manage that.
Also at this time, the escrow officer assigned to your transaction will be reaching out to you. They will request a seller information sheet and a mortgage statement so they can order a payoff statement. They will also be in charge of HOA payoffs, taxes and any other items including utilities, propane tank and even septic docs. If your property is in a trust, the escrow officer will need a copy of the trust for title insurance purposes.
11. Repairs & Appraisal
You’ve signed the offer and the buyer has performed their home inspection (if applicable) and they deliver a repairs request form to your agent. These requests can be relatively painless or full of angst depending on the home and the buyer. If your home naturally has issues that weren’t addressed prior to listing, it shouldn’t come as a surprise a buyer will request deficiencies be addressed. As a buyers agent, I counsel my buyers on how to ask for items. Big tickets repairs such as roof, water damage, electrical can be challenging, but whether we ask for it or someone else does, it needs to be addressed. Safety items must be addressed for the sake of doing the right thing, within reason.?
Once the agreement is in place for repairs, or a repairs credit, the inspection contingency will be satisfied. A mistake many agents make is not collecting receipts for work completed. As a seller, provide those to the other agent for accounting purposes.?
The appraiser is next, and will be assigning a value to the home. The appraiser will receive a copy of the purchase agreement. Through factual means, the appraiser will work to assign a correct value to the home and meet the purchase price if possible. Their job is to find comparable sold homes within a specific time period and geographic radius, that are similar in size, scope and location to yours. They will make adjustments for rooms, lot, age, condition, build quality, and views, and likely other factors.?
If you have made significant repairs or renovations to the home in the last 5 years, provide those items, dates and costs to the appraiser for their report. It can help increase the appraisal value and educate them on your home and its features. You do not need to be present for the appraisal and most appraiser prefer to work alone. Do not give appraisers a reason to place a condition on the report, such as a repair needed. You addressed repairs ahead of listing, and potentially during the inspection process. Appraisers expect a fully functioning home, which includes all flooring, no broken windows, all smoke detectors, a stove and no visible water damage or visible roof repairs needed. The appraiser is essentially putting money in your pocket with their report, so take this process very seriously.?
Closing and Signing
Once the buyer has satisfied their contingencies, their lender will create a loan document package for them to sign. Since Washington is an escrow/title state, we do not require attorneys to close. The escrow officer will reach out to coordinate a signing appointment for you to review and sign your seller closing package. This will also be the time to review the settlement statement, confirm how you want your funds and sign all the important documents to transfer ownership once the buyer signs and wires their money into the escrow account for the transaction.?
The signing appointment for sellers is much quicker than for buyers who normally spend 45 minutes signing all the loan documents. Come prepared with your bank and routing number for a deposit and your personal identification.?
At this point you should contact utilities and schedule your last date charged and the buyer should call to have them transferred into their name the day after closing.?
Closing Day
Upon closing day, the home should be clean and vacant. If a professional cleaning was required in the contract, that would be expected, but normally “broom swept clean” is the industry standard. I tell my clients, leave the home, how you would expect someone to leave it for you. Also, as the owner, you must plan to remove any garbage, flammables, from the garage and dispose of them property. Don’t leave 20 cans of expired paint for a new owner, because your agent will be stuck having to manage the removal and proper disposal.?
A critical reminder to sellers removing a refrigerator or washer, is to properly cap those items. I had a flooded home from a refrigerator water line, and a washer line uncapped and somehow running between closing day and the date my buyers moved in, creating an enormous headache for everyone. If you don’t know how to cap it, or turn it off, hire a professional.?
Items to consider on Closing Day
Congratulations, you have sold your home and are ready to take the next step in your life.?
As always, if I can assist you in the process of buying or selling real estate in the greater Seattle/Tacoma area, please connect with me at www.luxurypnw.com