What First Time Home Sellers Can Expect From the Process
(Seller Confidence Comes From Knowledge)
Finding a listing agent is the first major step in the home selling process. The general rule of thumb is you should interview three agents before making the decision. I whole-heartedly support that thought. You want an agent that knows the market, the area that your house is in, and is good at marketing.
How Much is Your Home Worth?
Determining your home value on the current market is at the top of the list of questions that I’m asked. There are many elements that go into an accurate Comparable Market Analysis (CMA). The details about your specific home are at the center the analysis. This includes everything from the size of your home, to the year it was built, to the neighborhood it is located in, and much more. It will also include improvements and maintenance on the house. You can sell your house “as-is” but there are simple things that you can do to increase the value for very little cost or work on your part. One of the most important is improving the curb appeal.
You want to avoid overpricing. This is one of the biggest errors that first time sellers make. It’s natural to think that by setting the price a little high, you’ll have room to negotiate and still get the full value. There are serious drawbacks to that strategy. Among the downfalls of overpricing is that it helps sell other homes in the neighborhood that are priced correctly. It also leads to less showings and offers. When buyers see a substantial difference in the prices for similar homes, the less expensive one gets sold first.
There are actions you can take to maximize the selling price. Curb appeal excites prospective buyers about taking a look inside. Inside is where decluttering and some staging makes the next good impression. None of this needs to be costly. Decluttering is about showing spacious rooms that buyers are looking for. Painting a room or wall a more neutral color. Changing out some light fixtures to make it more updated. All these things do not cost a lot but can add much more appeal to your home.
Maintenance and Renovations
Next is taking care of any maintenance and repairs that might be needed. Maintenance and repairs are different from renovations. Taking care of maintenance both improves the attractiveness of your home and increases the pool of potential buyers. Although a few buyers are interested in buying a house needing some maintenance for a slightly reduced price, what most of today’s buyers want are known as “turn key” homes. Homes in good condition and ready for them to move in.
As a seller, you probably don’t want to do major renovations or improvements shortly before you sell because these aren’t always a wise investment. Sure, a newly remodeled kitchen is highly appealing but also costly. A fresh coat of paint and clean carpets can be a better investment of your time and money. Still, some renovations make more financial sense than others do. A new front door is both relatively inexpensive and adds greatly to the curb appeal.
Inspections and Appraisals
When you and a buyer agree on price and terms for the sale of your home, there are a few more steps in the process before the sale is completed. Two of the most important are the professional home inspection and the appraisal. A home inspection gives the buyer confidence that there are no unexpected problems with the house. A home inspection does not usually need to cause anxiety for a seller. A professional home inspector does not issue a “pass or fail” report. Every house, even brand new construction, has at least a few minor imperfections. A home inspection deals mainly with major components of the home this includes the foundation, roof, HVAC, electrical, plumbing, windows, etc. Once an inspection is complete a buyer will send you a list of repair items, they want fixed. Then you, as the seller, decide with you agent what repairs you would do, if any. You are not obligated to do any repairs but generally the sellers do some repairs.
The appraisal is different from the inspection. The appraisal is for the benefit of the lender that will fund the buyer’s mortgage. The lender wants a third party opinion on the value of the house to be sure they aren’t lending more than it is actually worth. In some ways, it is similar to the comparable market analysis that your agent prepares to help you determine the listing price, but an appraisal is much more formal and detailed.
Closing Process for Sellers
This is the day and part of the process when the sale becomes final. This is the day that you collect the money from the sale. All of us want this to be a good day. The two main things that happen are signing legal documents and money changes hands. It’s important that everything be in order and prepared ahead of time.
Activities that will already have happened include a title search to assure a clean title is being transferred to the new owner. If there are any liens, claims, or judgements involving the ownership or part of the value of the house, these have to be taken care of before the transaction can be completed. Any outstanding issues should be known several days or weeks before the closing date.
Other things will also have already been completed. If there were any agreements or actions required from the home inspection, these need to have been completed. Also, anything else that was agreed to in the purchase agreement. For the buyer, the big one is usually having final loan approval. The buyer may ask for a final walk through a few days before closing.
On closing day, there will be a lot of legal paperwork involved that you will need to sign. You have every right to asks questions and have an attorney present or review the paperwork before you sign it. You usually don’t need to bring much to the closing. Typically, all you need is government-issued photo ID, the keys to the property, and any final documents that your attorney or escrow agent instructs you to bring.
The other thing that usually needs to occur on closing day is that you have moved out of the house. Your possessions and any major appliances that are not part of the sale need to have been removed. It’s also a good courtesy to leave the house clean and in the condition you would like to find it. There can be exceptions to when you move and remove your possessions but any exception needs to be part of the sales contract.
Of course, the money is probably the most important part of the closing process for you, as the seller. Typically, the seller does not need to bring any money to the closing process. The seller does have some costs but these are usually paid out of the proceeds from the sale (no cash required). Exactly how the money will be distributed and whom it goes to is detailed on the Settlement Statement at closing. You want to pay close attention and understand the closing paperwork, but the Settlement Statement is of extra importance because it determines how money will be distributed.
I hope you found this information useful about the basic process for selling a home. The process can be stressful at times, that is why it is important that you have the right professionals involved. Having the right professionals involved makes your selling experience and closing day go smoothly and is reason for you to celebrate the next phase in your life.
If you need more information or have questions, please contact us. You can also reach us by calling at (678) 570-8123. We'll be glad to help you!