Seller's Resources
Selling a house is a very difficult job. You want to sell your home as quickly as possible and at its full value. You must also be aware of state & federal laws and how they affect your sale.This involves a lot of time, effort, and patience, as well as specialized skills and knowledge. That is why most people turn to a Real Estate Agent for help.
When you sell your home, the Real Estate Agent will work for you as a client. You sign a contract with the agent, called a listing contract. The agent then works for you and receives an agreed commission when the house is sold.In a seller/client relationship, the agent guides you throughout the real estate transaction, providing information on such issues as pricing your home, which purchase offers are fair, and how to structure a purchase contract to your advantage. It is the business of the Real Estate Agent to help you sell your home with minimum delay and to help you realize every dollar it is worth.
Although the Real Estate Agent works for you and owes you additional services, the Real Estate Agent must also treat his or her buyer customers fairly. The buyer is generally the customer. There is no contract between the buyer and the Real Estate Agent. Today, however, many home buyers use a buyer's agent – a specialized Real Estate Agent who is the home buyer's client and works for the interests of the buyer. This makes it even more important for you to have an expert on your side looking out for your best interests. Please contact me for more information if you have any questions or want a free current market analysis.
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Selling Your Home: Where to Begin?
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First Impressions
Remember what first attracted you to your house when you bought it? What excited you about it most? When deciding how best to present your home for sale, it is helpful to try to get back into that buyer’s frame of mind.
A spruced-up house makes a great first impression on potential buyers. An attractive property grabs their attention and makes them excited about finding a house that looks and feels well cared for. Because buyers believe they’ll encounter fewer problems if they buy it, your house becomes more appealing and stands out from the competition. So if you prepare your home correctly, you’ll save time selling it when it’s on the market.
A good first impression makes an impact on a number of levels. It’s not just the way your house looks to potential buyers, but how it feels and smells to them, how their friends and family will react, how they imagine it would be to live there.
With simple improvements throughout your house, you can grab the attention of potential buyers and help them see why your house is right for them.
Plan Ahead
Create a plan to enhance your property. Keep a notebook, and as you stroll through your home and yard, make a list of what needs to be done. Consider what your property looks like to people driving by or walking through your door. What will they like or dislike? What needs fixing, painting, cleaning? What can you improve? Whether you paint your house or fix up the yard, your efforts don’t need to be costly; even inexpensive improvements and minor repairs go far towards attracting serious buyers. But remember, those seemingly insignificant problems you’ve learned to live with can actually discourage potential buyers.
Here are some ideas for increasing your home’s appeal in order to sell it quickly at the best price:
Interior
Clean Everything
Buyers expect a spotless house, inside and out, so clean everything, especially your windows and window sills. Scrub walls and floors, tile and ceilings, cupboards and drawers, kitchen and bathrooms. Wash scuff marks from doors and entryways, clean light fixtures and the fireplace. Don’t forget the laundry room. And put away your clothes.
Cut the Clutter
People are turned off by rooms that look and feel cluttered. Remember, potential buyers are buying your house, not your furniture, so help them picture themselves and their possessions in your home by making your rooms feel large, light, neutral, and airy. As you clean, pack away your personal items, such as pictures, valuables, and collectibles, and store or get rid of surplus books, magazines, videotapes, extra furniture, rugs, blankets, etc. Consider renting a storage unit to eliminate clutter in your garage and attic.
It’s hard to get rid of possessions, but cleaning and clearing out the clutter can really pay off in the end. Packing away your clutter also gets you started packing for your next move. Make your garage and basement as tidy as the rest of your house. Simple little tasks such as storing your tools and neatly rolling up your garden hose suggest that you take good care of your house. Don’t let anything detract from making your best first impression.
Closets
They’re an important consideration to many buyers. By storing clothing you won’t use soon, you’ll make closets look more spacious.
Paint
A new coat of paint cleans up your living space and makes it look bright and new. To make rooms look larger, choose light, neutral colors that will appeal to the most people possible, such as beige or white.
Carpet
Check its condition. If it’s worn, consider replacing it. It’s an easy and affordable way to help sell your home faster. Again, light, neutral colors, such as beige, are best. If you don’t replace it, you can suggest to potential buyers that they could select new carpet and you’ll reduce your price; buyers like to hear they’re getting a deal. At the very least, have your carpet cleaned.
Repairs and Renovations
It’s best to avoid making major renovations just to sell the house since you’re unlikely to recoup those costs in your selling price. Make minor repairs to items such as leaky faucets, slow drains, torn screens, damaged gutters, loose doorknobs, and broken windows. Make sure repairs are well done; buyers won’t take you seriously if your home improvement efforts look messy, shoddy, or amateurish.
Leaks and Moisture
Water stains on ceilings or in the basement alert buyers to potential problems. Don’t try to cosmetically cover up stains caused by leaks. If you’ve fixed the water problem, repair the damage and disclose in writing to the buyer what repairs were made.
Exterior
Curb Appeal
The "Wow" factor — that first visual, high-impact impression your home makes on potential buyers — can turn a looker into a buyer. To determine your property’s curb appeal, drive through your neighborhood and note other properties; then approach your own house as if you were a potential buyer. How does it look? Does it "wow" you? Will its curb appeal attract buyers? Note what needs improving, such as trimming trees, planting shrubs, or painting gutters. Little things convey that you’ve cared for your home, and this is your opportunity to sell that important message to buyers who are shopping from the street, simply cruising neighborhoods looking for houses for sale. To get them through your door, do what you can to make your property look like someone’s dream home.
Paint/Stain
If it’s peeling or blistering and you can’t remember the last time you painted it, your house needs some attention. That also goes for stain that is significantly faded. A newly painted or stained exterior will help sell your house faster, and whether you do it yourself or hire someone, you’ll also increase your home’s value.
In the Yard
Grab people’s attention by enhancing your yard and landscaping. If your house looks inviting and well-maintained from the street, people will imagine that it’s attractive on the inside, too.
- Prune bushes and hedges; trim trees.
- Keep your lawn looking healthy and green by mowing it often, fertilizing it, and keeping it edged and trimmed.
- Clean up and dispose of pet mess.
- Weed your gardens; add fertilizer and mulch and plant colorful flowers.
- In winter, keep your driveway and sidewalks shoveled, de-iced, and well-lit.
- Stack firewood, clean out birdbaths, repair and paint fences.
The Front Door
An attractive entry catches a buyer’s eye and says, "Welcome," so highlight this area of your house with decorative touches, such as a wreath on the door or new shrubs and flowers around the steps. For an even grander entry, clean and paint your front door, or replace it with a new one for a few hundred dollars. Don’t forget to fix and polish doorknobs, repair torn screens, and then put out that new welcome mat.
Cleaning and Maintenance Checklist:
- Windows, sills, and screens
- Walls and floor
- Tile
- Ceilings
- Cupboards and drawers
- Kitchen
- Bathrooms
- Light fixtures
- Ceiling fans
- Carpet and rugs
- Mirrors
- Garage
- Attic
- Basement
- Laundry room
- Yard
- Gutters
- Replace furnace filter
- Dust furniture, TV and computer screens
- Closets
- Remove clutter
- Pack personal items
Repair
- Leaky faucets and plumbing
- Torn screens
- Slow drains
- Gutters
- Loose doorknobs
- Deck boards
- Broken windows
- Electrical fixtures
- Water stain damage
- Broken appliances
- Damaged walls and ceilings
- Worn carpet and rugs
- Damaged sidewalks and steps
Improvements
- Stain or paint deck
- Store tools
- Roll up garden hose
- Paint or stain exterior
- Prune bushes and hedges
- Trim trees
- Mow lawn, fertilize, edge, and trim
- Weed gardens, plant flowers
- Shovel driveways, de-ice
- Stack firewood
- Clean out birdbaths
- Caulk windows and doors
- Repair and paint fences
- Seal asphalt driveway
- Make sure doors close properly
- Enhance entryway
- Replace welcome mat
These elements are no secret – selling anything is about presenting it as favorably as possible, and a home is no exception. With the right Realtor® and the right presentation, you may find that selling your home is a painless, quick, profitable process!
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Understanding Short Sales
There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale."
Should you find yourself in a serious financial problem, no longer able to afford to make your mortgage payments, you might want to consider attempting to do a short sale. If you're allowed to execute a short sale, your mortgage lender has agreed to accept an amount less than the full outstanding balance of your loan as payment in full. As a better alternative to bankruptcy or foreclosure, a short sale may or may not be possible. Your mortgage lender must approve your request, after you've submitted a number of documents to them.
As foreclosure rates hit record levels, more sellers are turning to short sales as a way to avoid foreclosure. So, how does it work? In a short sale, the seller arranges with their mortgage lender to accept a price that's less than the amount they owe on the property. As part of this arrangement, the lender typically agrees to forgive the rest of the loan. As a result, the seller doesn't have to go though a foreclosure, the buyer picks up a property at a discount, and the lender avoids taking on the burden of unloading the property.
Sounds good right? Well, sellers need to know that a short sale may damage their credit, though probably not as much as a foreclosure. Also, lenders generally will only agree to a short sale if the seller is many payments behind and has received a default notice. Buyers may get a great property at a discount, but they also will need to go through some extra paperwork too. Not to mention, they also need to be prepared to roll up their sleeves if that new property needs fixing up.
Summary: In a short sale, a seller facing potential foreclosure strikes a deal with their lender to accept less than they owe on the property, in exchange for avoiding foreclosure.
A short sale in real estate is not always a pleasant transaction.
When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales.
If you are considering buying a short sale, there could be drawbacks. For your protection, I suggest that all borrowers:
- Obtain legal advice from a competent real estate lawyer
- Call an accountant to discuss short sale tax ramifications
As a real estate agent, I am not licensed as a lawyer nor a CPA and cannot advise on those consequences. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. could consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. A lawyer can determine whether your loan qualifies for a deficiency judgment or claim.
Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.
- Call the Lender
You may need to make a half dozen phone calls before you find the person responsible for handling short sales. You do not want to talk to the "real estate short sale" or "work out" department, you want the supervisor's name, the name of the individual capable of making a decision.
- Submit Letter of Authorization
Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:
- Property Address
- Loan Reference Number
- Your Name
- The Date
- Your Agent's Name & Contact Information
- Preliminary Net Sheet
This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale.
- Hardship Letter
The sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
- Proof of Income and Assets
It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
- Copies of Bank Statements
If your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it's probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.
- Comparative Market Analysis
Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes:
- Active on the market
- Pending sales
- Solds from the past six months.
- Purchase Agreement & Listing Agreement
When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to pay for certain items such as home protection plans or termite inspections.
Now, if everything goes well, the lender will approve your short sale. As part of the negotiation, you might ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request. Credit report status is not always negotiable.
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