Selling your home is one of the most significant steps in your life. Here are some essential tips you must know...
For most people, selling their home means cashing in their biggest asset. In other words, it must be handled with immense care if you desire to protect and capitalize on your property. These Helpful Tips were written with one objective in mind: to give you the information you need to maximize your profits, retain control, and reduce the anxiety that comes with the home-selling process.
The reason you look closely at why you want to sell is because your motivations play an important part in the process. They influence everything from setting a price to determining how much time and money you'll invest in getting your property ready for sale. For example, what do you feel is more important to you: the profit you walk away with, or the length of time your property is on the market? If your aim is a quick sale, that can dictate one kind of approach. If your desire is to maximize your profit, the sales process will usually take longer.
Your reasons for selling will influence the way in which you negotiate the sale of your home, but they shouldn't be given as ammunition to the person who may be a potential purchaser. For example, a prospective buyer who perceives that you must move quickly has the upper hand in the negotiation process. When questioned, simply state that your housing needs have changed. Your reasons are of no one's concern but your own.
Deciding what price your property should be listed at should take careful consideration. Once you have set your price, you have told prospective purchasers the absolute maximum they will have to pay for your property. The objective for the sales representative is to get a selling price as close to the offering price as possible. If you begin by pricing too high, you might not be taken seriously by prospective purchasers and their agents. Starting too low, can result in selling for much less than market value. Setting your home's sale price can be reasonably easy. If you live in a subdivision consisting of homes with similar or identical floor plans, built around the same time, all you should have to do is average out the asking prices for the recent resales in the neighbourhood and that should give you a good starting point. This could pose a problem for people who live in older neighbourhoods that have changed quite a bit over the years. Every home in your neighbourhood may be different in insignificant or substantial ways - the house next door may have added an office, for example, or the one across the street might have been built recently to occupy a vacant lot. As a neighborhood evolves over the years, you may find that there are less and less homes that are truly comparable to your own. If you choose to sell your home on your own, the most common way to set a value is to look at homes that have sold in your neighbourhood within the past 3 to 12 months, as well as those presently listed for sale. That's unquestionably how prospective buyers will assess the worth of your home. It is common to learn what homes have sold for in your neighbourhood by making a quick trip to City Hall; home sale information is public record in most communities (but not all). If you would rather not risk a possible negative conclusion, you may decide to hire a Realtor. Your Realtor will do all the market research and provide you with comparisons showing where your home should be priced to best meet your goals - a fast sell, maximum profit, etc. Keep in mind a great Realtor is attuned to certain market conditions that may not be evident from comparable sales and listings.
One of the most informative ways to get to know your competition is by viewing other homes on the market and trying to identify features that are popular and to discover what turns buyers off. Plan on spending a couple of weekends touring other homes on the market to learn what other sellers are asking. Be sure to make note of the floor plan, condition, appearance, size of lot, location and other features. While you visit these homes, be observant to the details (and what other 'buyers' are saying), this will help you acquire a good understanding of how different features affect pricing. It is at this point that you can apply what you've learned to the task of setting your price. It is important to include in your equation what homes are actually selling for, not just simply what people are asking. And remember, if you're serious about selling your home quickly, don't be more expensive than your neighbour.
You may find that sometimes you can use a good appraisal to benefit you in the marketing of your home or property. And if you get a certified appraisal, you can use it to let potential purchasers know what amount can be financed. However, you must determine whether the costs are worth it or not. Also keep in mind that it has a limited life.
In some cases people look to their tax assessments to assist them in determining a value. There are a number of things wrong with this approach, for example assessments are based on criteria unrelated to property values, so they often don't reflect the true value of your home. It is quite common to find two identical homes in the same neighbourhood with drastically different tax assessment values because one was purchased more recently than the other.
Almost two-thirds of the people who try to sell their own homes say they wouldn't do it themselves again, according to research by the National Association of REALTORS®. People surveyed found that there were difficulties in determining a price, limited marketing approaches and avenues. As well there is a liability concern among the primary reasons they would turn to a Realtor next time. And quite often selling a home privately takes up more time and effort than you might have initially expected. Many top REALTORS® are more than willing to assist do-it-yourself sellers with some of the paperwork, contracts, etc.. Plus you'll have built up a relationship with an agent if problems do arise that require professional assistance. If you decide to work with a Realtor, contact two or three. Explain to each that you're thinking about putting your home on the market and you'd like to meet to talk about pricing and marketing. By having this group “evaluation” done, you should end up with a fairly good price range to assist you in your decision. If a Realtor's price is substantially higher or lower than the average price range, you should ask him or her to justify the estimate. Just as you should be concerned with a price that is too low, beware of agents who gives you the highest price — they may be trying to buy your listing. Educated REALTORS® know the market, and your neighbourhood in particular. They will supply you with information on past sales, current listings, a marketing plan, something on their own background, and references from past clients. Take the time to carefully evaluate candidates on the basis of their sales experience, negotiating abilities, qualifications, enthusiasm and personality. One of the most important factors is to make sure the person you choose is going to put in a lot of hard work on your behalf.
It is important to make sure you leave yourself enough room in which to bargain. If what you ask for is unacceptable to the buyer, and their first offer is unacceptable to you, then you had better make sure you have some negotiating room. Start with the absolute minimum price you would accept, then pick the price you'd get if the world were perfect. This gives you your range to keep in mind when working with your Realtor to negotiate the sale. In setting your asking price, review your priorities. Do you want to maximize your profit or sell quickly? You will price high if you want to maximize your profits, or close to market value if you want to sell quickly.
Each year, corporate North America spends billions of dollars on product and packaging design. The lesson here is that appearance is critical—and it would be foolish to ignore this when selling your home. You may not be able to change your home's location or its floor plan, but you can do a lot to improve its appearance. And you should. The look and “feel” of your home generates a greater emotional response than any other factor. You may price your home to sell, but a prospective buyer reacts to what they see, hear, feel and smell.
The key to effective marketing is knowing your product's good and bad points. In the case of your home, accentuating the good can mean a faster sale for more money; failing to deal with the bad can mean months on the market and a lower-than-desired sale price. One of the biggest mistakes you can make is to rely solely on your own judgement and personal feelings. Remember this is YOUR HOME, a place of fond memories. There are bound to be emotional and personal issues that can impair your ability to make an honest assessment of your home's strengths and weaknesses. In assessing what improvements you can make, you should ask others for their opinions. It is important that the person gives an honest answer; some may try to spare your feelings, and that is just what you don't need. Fortunately, your Realtor won't be shy in discussing what should be done to make your home more marketable.
The step that squeaks, the light switch that doesn't work, the crack in the drywall —they might be minor irritations to you, but they can also be deal-killers. The problem here is that you never know what will turn a buyer off. And even something minor that's gone unattended can suggest that perhaps there are bigger, less visible problems present as well.
If you have ever toured someone else's home, you may have felt uncomfortable. You probably felt that way because you saw, heard or otherwise sensed something that made you feel like you were intruding into someone's life. The last thing you want others to feel in visiting your home is that same sense of discomfort. You can avoid this by making your home as neutral as possible. Anything that interferes with a potential buyer's ability to see themselves living in your home must be eliminated. A few carefully chosen knickknacks and family portraits may add warmth and character to the home, but too many are a distraction. Avoid unique or trendy colour schemes — paint and carpet in neutral shades of white or beige.
While personal items can detract, other small touches can help make your house a home to buyers. A well-placed vase of flowers, accent pieces of sculpture, potpourri in the bathroom — all can enhance the attractiveness of your home in a subtle, soft-spoken way. You may get more helpful tips in home magazines.
All traces of food, pet and smoking odours must be eliminated. Even when you’re not there, don’t encourage prospective buyers to imagine things. If they know you’re a smoker or that you have a dog, they’ll start smelling odours and seeing stains that may not even exist. Be safe — don’t leave any clues.
Smart sellers proactively go above and beyond the laws to disclose all known defects to their buyers —in writing. If the buyer knows about a problem, he or she can’t come back with a lawsuit later on.
Marketing strategies specifically designed for the client can maximize your home’s marketability, and this will increase your chances of attracting more than one prospective buyer. Why is this better? Because several buyers competing for the same home will not only increase the sale price, but they can effect closing dates and your home may even sell quicker.
The limit of most people’s experience in the art of negotiation begins and ends at their local auto dealership. And we all have unpleasant memories of haggling with car salesmen. It is important that you let go of the emotional side of the negotiations and approach the negotiations in a detached, businesslike manner. Then you will find the process to be a lot less painful. In fact, you might even enjoy it — and you’ll definitely have an advantage over prospective buyers who get caught up in the emotion of the situation.
In the negotiation process, your objective is to control the pace and set the duration. And the better you know your buyer, the more easily you can maintain control. As a rule, buyers want the best property they can afford for the least amount of money. But knowing specifically what motivates your buyer enables you to negotiate more effectively. Maybe your buyer needs to move quickly. Or the maximum amount he can spend is just a little below your asking price. Knowing this information puts you in a better bargaining position.
When a buyer would 'like' to close is often when they 'need' to close. Knowing this gives you his deadline for completing negotiations —again, an advantage in negotiations.
If at all possible you should avoid closing a deal on your new home before your present home is sold. The reason for this is that you (in the eyes of the buyer) then turn yourself into a seller who is eager (or desperate) for the first deal that comes along.
Studies have shown that it is more difficult to sell a home that is vacant —it looks forlorn, forgotten, simply not appealing. It could even cost you thousands. If you move, you’re also telling buyers that you have a new home and are probably motivated to sell.
Forcing yourself to sell by a certain date adds unnecessary pressure and puts you at a serious disadvantage in negotiations.
The first offer is almost always well below what both parties know the buyer will end up paying for your property. Don’t get angry or feel insulted; evaluate the offer objectively. Make sure it spells out the offering price, amount of down payment, mortgage amount, a closing date and any special conditions or special requests. This now gives you a point from which you can negotiate.
If you feel an offer is far too low, this would be a good time to make sure the buyer has been qualified to carry a mortgage of this size (if you haven’t learned this already). Ask how they arrived at their figure, then suggest to their agent that they use comparables to establish what homes are selling for in your neighbourhood.
Any unacceptably low offer should not be taken personally or seriously. Rather, it should be countered, even with the slightest of reductions in your asking price. This lets a buyer know that his or her first offer isn’t seen as a very serious one.
The best way to avoid problems is to make sure that all terms, costs and responsibilities and conditions are spelled out in the Agreement of Purchase/Sale. A contract should include the date it was made, the names of the parties involved in the transaction, the address of the property being sold, the purchase price, where deposit monies will be held, the date for loan approval, the date and place of closing, type of deed, any contingencies that remain to be settled, and whether there’s any personal property included (or not) in the sale, among other things.
Resist the temptation to deviate from the contract. For example, if the buyer asks to move in prior to closing, just say no. Now is not the time to take any chances of the deal falling through. If this all sounds like a lot of work, it is. But it’s to be expected when you’re selling anything of such great value. And you’ll thank yourself for all the expense and hard work when the outcome works to your satisfaction.