GUIDE FOR SELLERS
1. Know the Value of Your Home
Call a realtor for a Comparative Market Analysis. You should call one who is experienced. You will be entering into an important and personal partnership in marketing your home. At the first meeting the realtor will discuss agency with you. An Agency Disclosure Form is required. A Market Analysis is a free service, if the seller is thinking of possibly selling. The process is similar to an appraisal done by an appraiser, but the licenses are different. The realtor will meet with you at your home, and carefully go through each room, and check out all of the systems. Then he or she will research similar properties that have sold during the past 12 months, those presently under agreement, and those actively on the market. It is a subjective process, since any 2 properties are not often very similar, and it results in an educated guess based on experience. The realtor tries to be as accurate as possible in guessing what future buyers will offer because it is so important. This is true, not only for you, the seller, in making your plans, but is important to the realtor in being able to market your home successfully. The goal is to arrive at a fair market value, so that the home will sell for the highest price possible, in the shortest amount of time, with the least inconvenience to you. After meeting with you it generally takes at least a few days to do the paperwork and arrive at a selling value.
Before the realtor arrives it is helpful to have any useful paperwork available. This may include the following: the last property tax bill, a plot plan or survey, a list of when major improvements were made, such as age of roof, boiler, any additions, etc., age of appliances, information on the well, if any, and summer pictures, if it is winter.
The realtor will contact you to discuss his or her opinion of value. This will include not only the expected market value, but also an opinion of a recommended listing price. He or she will also discuss what you will need to do to best make your home as attractive as possible.
2. Preparing Your Home for Marketing
Presentation is important, and will mean more money to you.
Exterior: Make sure that the approach is as pleasing as possible. Cut the lawn, clean up the yard, trim shrubs, especially away from the house, and remove any clutter. Make sure that the exterior paint looks good. It is important to make a good first impression.
Interior: Make it as neat as possible. Remove any clutter so that rooms feel as open and orderly as possible. This will give the buyers the subliminal message that everything is in order, including the systems and what they cannot see. It will also make them feel that there is enough room for everything. Windows should be washed, and all surfaces should shine. Doors should open and close smoothly, and not squeak. The goal is open, bright and sparkling. Even the basement and garage should be neat and uncluttered.
Systems: If you have a septic system, arrange to have a Title V inspection. Your realtor can give you names of inspectors. If your system fails, it costs a lot of money, and takes months to remediate. You should know this before you negotiate an offer. The inspection is good for 24 months. Make sure that other systems are working properly.
Utilities: Get fuel consumption in gallons and electrical cost for the past 12 months. Include oil, propane and cords of wood, if you burn wood.
3. Listing Your Home
Meet with your realtor to discuss and sign paperwork. This takes at least an hour. The forms will include: an Agency Disclosure Form, the Exclusive Right to Sell Listing Form, the Seller's Statement of Property Conditions, a Lead Paint Disclosure Form (if the home is older that 1978), and information for the listing sheet. The listing contract is the Exclusive Right to Sell form, and it includes price, the length of the contract, and the commission amount, among other details. If it is an Exclusive Right to Sell contract you are not reserving the right to sell your home yourself. All arrangements will be made through your listing agent, who will be representing your interests, and get paid only if there is a closing.
Advertising and Exposure. The realtor will begin by putting a sign in front of your home. He or she will let all of the company's associates know about the new listing. Your home will be put into the Multiple Listing Service network as soon as possible, but no later than 2 days from the date of the contract. This will expose it to hundreds of realtors. We cooperate with all realtors, and part of the commission is shared with the buyer's agency. It will be put on other web sites, since buyers depend mostly on the internet to learn about what is on the market. Newspaper ads take about a week to begin to appear. The "Real Estate Book", a colored pamphlet, comes out once per month.
4. Showing Your Home
Your realtor will call you to arrange for showings. Normally you will have a day's notice. A realtor, although not always your listing agent, will be present for showings. The key will be kept in a lockbox, which is a little safe with a combination, hung on a door knob. You should never be home during a showing; it is a distraction for the buyers, and is not helpful. Before you leave, turn on all of the lights, including in the basement.
5. Considering Offers
Any offer must be in writing and given to your listing agent. He or she will be in touch with you to discuss the terms. Any and all offers must be presented to you. In general, you will have 2 days to respond. You will decide on price, closing date, and basic terms. You may either accept the offer as it was presented, reject it completely, or reject it, but give the buyer a counter-offer with terms acceptable to you. The process of counter-offering is often done verbally. Once the offer is agreed upon, it is signed and initialed. An offer is legally binding, and is followed by a Purchase and Sales Agreement (P&S), which is drawn up by the 2 attorneys. The offer is bound by an initial deposit, usually of $500. A balance of 5% is given when the P&S is signed, and put into an escrow account by the listing agency for your protection. Note that until an offer is signed and initialed the home is legally still on the market.
6. After an Offer is Accepted
Note that once you accept an offer your home is not sold; it is under agreement. Until the inspections are over, financing is obtained, and a Purchase and Sales Agreement is signed the transaction is not secure.
Inspections. The buyer has the right, at his or her expense, to inspect any aspect of the property within 14 days or 10 business days from the date of acceptance. If there is anything that he or she finds unsatisfactory, they have the right to withdraw or renegotiate the offer. Besides the septic inspection, you may be expected to test the water and inspect the home for wood boring insects. The buyer may include a radon test, a mold inspection, and a lead paint inspection. You will have to install and have tested smoke detectors. All inspections will be arranged by your realtor. Once the inspections are done, the final terms are incorporated into the Purchase and Sales Agreement, which will replace the offer.
Time Frame. A closing normally takes 6 to 8 weeks from the acceptance of an offer. It is possible to do it in 3 to 4 weeks, but this is unusual. A buyer may be concerned about the bank's interest rate, which is normally only "locked in" for 60 days.
The Purchase and Sales Agreement often takes at least 3 weeks from acceptance.
Bank commitment takes 4 to 5 weeks. The bank will give final approval only after an appraisal is done on the home. This is a cost to the buyer. Your agent will make an appointment to have your home appraised.
7. Once the Closing Date is Set.
a. Make a date with a moving company. This should be done as earlier in the process as possible.
b. Arrange to complete any repairs required by the buyer subsequent to the inspection.
c. Call utility companies. These may include: electric, gas, propane, oil, cable, and telephone. Public water and sewer is taken care of by the realtor or attorney. You will be reimbursed for any oil, propane or wood included with the property. Call your insurance company, but keep your home insured until after the closing.
d. Clean everything out. The home, basement, garage, outbuildings and grounds need to be left "broom clean." Old wood and paint, cleaning supplies, everything, needs to be out, unless the buyer agrees.
e. A "walk through" will be scheduled for the buyer by the realtors once you have moved out. You have until the closing to vacate, but logistically the walk-through may have to be arranged the day before. If you are not completely out at the time of closing, then money might have to be set aside by the buyer's attorney from the proceeds. Although possible, this is not desirable.
f. Meet with your attorney to sign all the paperwork. This can be arranged at your convenience, and often is done before the day of the closing. Closings rarely include having all of the parties present, and are done at the convenience of the attorneys and their clients. After the closing your attorney will give you a check, which will be the bottom line of a closing statement with all of the expenses, credits, and debits figured in.
Your expenses will include:
Real Estate Commission
Legal fees
Agreed upon repairs, if any
Recording fee
Wood boring insect inspection, if required of Seller
Smoke detector inspection
Tax stamps: a State tax of $4.56 per $1,000 (unavoidable)
Septic inspection, if any(Inspections and repairs may have been paid by you already before the closing.)
Call Delap Real Estate! Our experienced professionals will make selling your home as pleasant and profitable as possible.