FAQs for First-Time Home Sellers
Selling a home is a complicated process, especially if you are new to it. Let’s relieve any anxiety with answers to some common FAQs.
Q: Do I need a real estate agent to sell my home?
It may be tempting to try to sell your house yourself to save on commissions, but listing with an agent provides some significant benefits and steers you clear of potential pitfalls.
First, an agent is a home marketing specialist. He’ll offer valuable help in establishing a good offering price, then list your home on the Multiple Listing Service (MLS), which is available only to licensed agents. The agent will also list your home on his website, home-shopping sites and social media. The agent will arrange for professional photography and perhaps staging of your home and will conduct an open house. Having an agent also gives you more control over the timing of showings; without one, buyers may show up on your doorstep with no advance notice wanting to see your home.
Your agent helps you negotiate with buyers to achieve the best sales price. She knows how to handle contingencies that a buyer and/or his agent may throw into the negotiation. After you’ve signed a contract, an agent is trained to handle the scores of details and steps that follow. Getting the earnest money to the escrow company, managing through the option period, arranging for an inspection and appraisal, answering repair questions, handling closing documents…all of these details can overwhelm a seller who doesn’t have professional help.
And selling without an agent doesn’t always mean you’ll pay no commission. If the buyer of your home has an agent, you’ll be asked to pay a commission to that agent.
Q: When is the best time of year to sell my home?
Homes can sell any time of the year, and each region of the country has its own best period for sales. But generally, the conventional wisdom is true: The prime season for selling single-family home runs between spring and late summer. The weather is nicer and families with children prefer to move before the start of the school year.
This seasonal demand drives up housing prices, a boon to sellers. As more houses sell, comparable prices rise, driving prices even higher throughout the selling season. Of course, the flip side of these advantages is that your home will have more competition if you list in the spring or summer.
Off-season, selling activity slows, but that doesn’t mean opportunities don’t exist. In early fall, sellers will still benefit from the higher sales prices of the summer months. Plus, there are fewer competing homes listed, and some of the leftover listings from the summer may be left over for a reason.
Since the prime buyers for condos or townhomes are singles or empty nesters, sales of these properties are not as affected by the need to complete a deal before school starts.
Q: How should I prepare my home for listing?
Begin by thoroughly decluttering and cleaning. Sell, donate or trash to make your home seem open and livable. Hire a professional cleaning service to make the place shine, and have the carpets cleaned. Address any pet or smoking odors, as offensive smells are an instant turnoff for buyers.
Clear outdoor clutter and mow and trim the landscape to give the house curb appeal. If your front door is faded, paint or restain it. Consider touching up paint that is faded or peeling. The front of your house gives buyers their first impression of your home, and it needs to be a good one.
Make minor repairs and discuss with your agent whether to make bigger repairs or wait to see what a buyer wants.
Have your home professionally staged. Don’t be offended if your decorations are removed and replaced. Remove personal family pictures so that buyers can envision the house as theirs, not yours.
Q: How do I determine how much my home is worth?
It’s important to set an appropriate asking price for your home. Set the price too high and your home could languish on the market; too low and you may end up leaving money on the table.
Your agent can help you determine the right price by preparing a comparative market analysis (CMA) that includes sales prices of comparable homes (similar size, floor plan, and lot size) in your area that have sold in the last six months. Upgrades you’ve made may add value to your home or at least make it easier to sell. In addition to the prices of the comparables, the agent should provide the number of days it took to sell these homes. The agent should also know what buyers are currently looking for in a home so she can spot qualities of your house that will help or hurt your pricing.
Based on the comparables, set the price at what you reasonably think the market will bear. Also, decide how much you are willing to negotiate. What is the lowest offer you’d accept?
Keep in mind that the buyer’s lender will have a professional appraiser establish an official value of your home after the sales contract is signed. The appraiser will also depend heavily on comparable sales. If the sales price is too high above the appraisal, the lender will require the buyer to put more cash down or ask you to bring the sales price down in line with the appraisal. This problem can sink a sale, so avoid it by pricing correctly from the beginning.
Q: How does the home inspection process work?
Most states’ real estate contracts allow for an option or due diligence period immediately after the contract is signed during which the buyer can terminate for any reason without loss of earnest money. A smart buyer will have the home inspected during this period so that if any serious concerns are uncovered, he can either negotiate a price concession or exit the deal.
The inspector will examine the roof, the foundation, the appliances and all major systems of the house, such as heating and air conditioning, plumbing and electrical. It’s the inspector’s job to flag even minor issues. The buyer will decide what is worth negotiating for repair and what isn’t. Your agent will help you decide how to respond.
Q: How should I respond to a lowball offer?
It’s normal to be disappointed, even offended, when a buyer’s offer comes in significantly below what you are asking, but resist the urge to instruct your agent to fire off a nasty rejection note.
Instead, talk with your agent about how best to proceed. One option is to make a counteroffer. Often it takes several counteroffers from both sides to reach an agreement. One strategy for sellers is to counter back with your current asking price or something just below it to signal that you will only entertain reasonable offers. This could bring the buyer back to reality or cause them to move on immediately. Another strategy is to counter with your lowest acceptable price, which the buyer could either accept or walk away from. The risk here is that by not countering at an interim price, you may miss the chance to sell at something higher than your lowest acceptable price.
Keep in mind that price isn’t the only consideration when mulling over an offer. Is the buyer offering cash with a quick closing date? How much is it worth to have your home sold in two weeks as opposed to sitting on the market and waiting for another offer? If you’re facing two mortgages or a temporary move, accepting a lower price might actually be a better deal. Alternatively, you could stick to your original price but offer to convey appliances, pay some of the buyer’s closing costs, make requested repairs or close at a time of the buyer’s choosing.