Chances are, your home is one of your largest financial investments. With every financial decision, knowing the best time to sell your home is critical in order to maximize the best financial outcome. The second critical decision is to determine the best listing price for your home. These are the TOP 10 factors that will determine a successful outcome.
- An honest assessment of your current home value
- Preparing your home to sell
- Knowing your Net Numbers
- Understanding the Listing Process & Selling Process (Signage, Showings,
Open Houses, etc)
- Marketing Plan
- Understanding negotiating strategies
- Escrow Rules and what it means to you
- Home Inspections
- The Appraisal process and what you need to know
- Contract to Close (Contingencies, preparing for your move, the Closing Date, etc.)
How many seconds does it take for a first impression? The surprising result is, it takes a Buyer 3-5 seconds to form their first impression.
The first impression is when they pull up to the house. A home with good Curb Appeal, will sell for a higher price than an identical home with a poor curb appeal. A manicured lawn, maintained flower beds, clean home exterior, and freshly painted front door is what a good curb appeal entails.
TOP 10 List in Detail
1. An Honest Assessment of Your Current Value
This is incredibly important and many Sellers’ make the mistake of over-valuing their property based on emotions.
You should never base current value on Active listings. The only way to accurately estimate your home’s value is to look at comparable homes within your immediate area that has SOLD within the past 3-6 months. This is the baseline of how to determine true value.
2. Preparing Your Home To Sell
There is a lot to be considered when preparing your home to sell. Two most important things to consider when selling your home are:
- Remove all valuables from the home! Put jewelry in Safe Deposit Boxes. Anything of irreplaceable value needs to be stored away.
- Anything that is secured to the ceiling or walls that you intend to keep and are not a part of the house sale, needs to be replaced (ie: Family heirloom chandelier, Antique mirror above the bathroom sink, etc).
Once you have secured your valuables, then you can begin preparing the house itself – Room by Room. Click HERE for a Check List.
3. Knowing Your Net Numbers
There are a number of expenses that will need to be paid when you sell your home. Make sure you are aware of your net number prior to listing your home. (Gross Sale Amount – Expenses = Net Amount).
- Mortgage payoff
- Unpaid Taxes (Pro-rated)
- Michigan Transfer Tax Calculator HERE
- Title Insurance
- Seller contribution to Buyer towards closing costs
4. Understanding the Listing Process
Make sure you review and understand the Listing Agreement terms and conditions.
Review the pros and cons of having a lock box; as well as electronic lock box vs. combination lock box.
Understand the Showing Instructions Agreement with Agent. There may need to be additional instructions if a pet will be on premises during showings.
5. Marketing Plan
Having quality photos is a MUST in today’s digital world. Did you know that over 90% of homebuyers begin their home search on the internet? Did you know the TOP 4 reasons why a home doesn’t sell?
- Poor photos
- Non-attentive Agent
- Poor Marketing
6. Understanding Negotiating Strategies
Depending upon your current real estate market, there are two types of Buyers; one that needs a home and one that wants a “deal”.
Understanding the structure of an offer can help eliminate unnecessary “hurt” or “offended” feelings. The worst thing you can do as a Seller is to refuse to respond to an offer presented in writing.
- Never negotiate a Verbal Offer.
- If you receive a “low-ball” offer, respond with a full price counter offer. No emotions. You don’t want any Buyer to get the best or worst of you.
7. Escrow Rules
Escrow deposit (Earnest Money Deposit) is Good Faith intentions to purchase a property, in the form of a monetary deposit; subject to specific conditions/performances that are defined in the Sales Agreement. The conditions of purchasing a home are called Contingencies, such as: Home Inspection, Financing, Title Commitment Review, Title Insurance Review, Attorney Review, etc. Each Contingency has a specific period of time for performance. THIS IS CRITICAL. ALL CONTINGENCIES MUST BE INCLUDED IN THE ORIGINAL SALES AGREEMENT.
IMPORTANT! An Escrow Deposit is the one of the most misunderstood clauses of the Purchase Agreement. Currently, there is no dollar amount required, or percentage stipulated by law, for an Earnest Money Deposit (EMD). With this said, it is recommended as a Seller, to request as much as possible to ensure Buyer performance. BUT, keep in mind, this is not the Seller’s money to keep UNLESS the Buyer breaches the terms of the contract. Even if there is a Breach of Contract, both the Buyer and Seller must sign a “Release” in order to payout the held deposit. The only time the EMD is released without signatures is at the time of closing when the EMD is provided as part of the Buyer’s down payment.
8. Home Inspections
It is recommended the Seller conduct a home inspection prior to listing the home for sale. This will prevent “surprises” that could cause a Buyer to walk away or to request a price reduction for unforeseen inspection problems. A well maintained home will sell for more than a home in need of repairs.
9. The Appraisal
Since 2008, the financial industry has been plagued by very strict Federal Regulations. Although the current real estate market is a Seller’s market, the Appraisals are monitored differently. This has caused a tremendous amount of problems for Sellers. In order to combat this issue, it is important that ALL improvements be documented, along with cost of improvements and provided to the Appraiser at the time of the Appraisal. There will be no other time the owner or Agent will be able to speak to the Appraiser. It is recommended the Agent provide the Appraiser with pre-determined comparables to support the Sales Agreement price.
10. Contract to Close
Although this is a real estate term, the entire process needs to be followed by everyone involved in the transaction; from the home inspection, to the lender, to the day of closing. Timelines and contingency due dates need to be adhered to, and contingencies need to be removed or extended in writing. Every step in the contract needs to be performed on a timely basis. This is when details are critically important to ensure everyone is ready to close. This is also one of the biggest stressors in a real estate transaction. Missed contingency deadlines can and will put the closing at risk.