Taking the First Steps
The home selling process differs from state to state, and even when laws are similar the procedures and local customs sometimes are not. But there's quite a bit of advice that can help you sell your home, no matter where you live. This series of articles will cover those topics. Before you even think about selling your home, answer this question.
Where Will You Go?
I've talked with sellers who signed a contract to sell their house before they knew they qualified to buy another. Either their financial circumstances had changed since their last purchase, and they could no longer qualify for a loan, or they weren't able to sell at a price that allowed them to buy the type of house they wanted. They ended up renting or buying something that wasn't ideal. This scenario is more of a problem with owners who have little equity in their homes, either because they haven't owned it very long or because it has not grown in value as much as other houses in the area. Before you consider selling your home, be sure you can replace it with another. Get pre-approved by a lender you trust and begin to research the housing market in the area where you wish to live.
Research the Market
Start picking up free For Sale publications outside the grocery store, or wherever you find them in your town. Search the Internet for homes for sale in your area. Read real estate ads in your local newspapers. You won't find house locations without making phone calls, but browsing the general market is a good start. Look for two types of real estate: houses that seem to match the one you'd like to buy; houses that seem similar to your current home.
Check Your Payoff
Make a call to your mortgage holder to check the payoff for your current home loan. The payoff amount will help you decide if selling makes sense.
Find a Listing Agent
You may decide to sell your house for sale by owner, but if you want to use an agent, pay attention as you research the market.
- Which agency's ads or Web sites are the most appealing?
- Which agencies consistently feature virtual tours on their Web sites?
- Do house descriptions make you want to schedule an appointment?
- Does the agency provide multiple photos of homes, and are they of good quality?
- Which agencies advertise in multiple publications? On TV?
- Was their Web site easy to find when you searched for homes for sale in your town?
- Paying attention to all of those things will help you become more familiar with the real estate agents in your area. Ask your friends for referrals, too. Have they worked with an agent who did a great job?
Once you have a list of agents, make an appointment with each one to learn more about their services. Find out if agents are willing to do a free comparative market analysis (CMA), a process that compares your home to similar homes that have sold recently. Agents use this tool to help sellers set listing prices.
- Ask agents to explain the marketing tactics that will be used to sell your house, including print, Web and other types of advertising (you'll already know much of this if you've done your research).
- Will they immediately place your house in the Multiple Listing Service (MLS)? Making your home available to every affiliated agent greatly increases the buyer pool.
- Find out if the agency belongs to more than one MLS. In some areas there's an overlap, making multiple memberships important.
- Ask their commission rate. Find out how long they want you to list with them, keeping in mind that the time is usually negotiable. What's the average length of time it takes to sell a house in your area? How long has each agent been licensed to sell real estate? What percentage of their listings sell during the initial listing contract period?
- How often can you expect to receive buyer feedback? Weekly, twice a month, after every showing? Will the feedback be written? Buyer feedback is an important tool. If everyone makes the same negative comment, you should consider working on the problem.
- Will the agent hold an open house for other real estate agents? For buyers?
- How are showings are handled? Will you receive advance notification that someone is coming? How much notice is typical? You can put restrictions on showings--certain days or times are off-limits--but that may cut down on the number of times your home is shown.
- If you have pets, make sure the agent is committed to a plan that ensures their safety. If it's a dog that bites, you will need a plan for buyer safety, too, or be present for all showings.
- Does the agency use lockboxes? Many agencies place a key inside a box that is secured to your home. Ask the agents to explain how this works. If your new home will be in the same area, ask the agent any questions you might have as a buyer. You may choose to use the same agent to buy and sell.
Ask agents to give you an estimate of seller closing costs.
Ask any other questions you think are important, but your decision to hire an agent should be based in part on a gut feeling that the two of you can work together. You don't necessarily need the biggest agency in town, the busiest agent, or the agent with the most experience. You need an agent who will market your home aggressively, to both buyers and other agents.
- Sellers' taxes.
- Attorney or other professional fees.
- How your share of property taxes for the year is calculated; your share of association dues, etc.
- The real estate commission.
- Any other expenses that sellers are expected to pay for. (surveys, inspections, certifications, etc.--because customs differ around the US.)