COMMON QUESTIONS FOR THOSE SELLING THEIR HOME
Selling your home is a big step. It’s an exciting process but it does take some work. You should make time to fix all the problems you’ve ignored. You also need to decide if you’re going to sell your home on your own (For Sale By Owner/FSBO) or use a real estate broker for their help.
Below are a few frequently asked questions about selling a home.
When is the best time to sell my home?
House sell all the time. The time of year you choose to sell your home can make a difference in the amount of time it takes and the final selling price. Typically, the real estate market starts to get busy in early spring and starts to slow down towards the end of summer. The end of July through August are often the slowest months for real estate.
The supply of homes on the market shrinks in the Fall because people are preparing for the holidays. There are still buyers in the market place, but now there is less inventory for them to choose from which can in turn support housing prices depending on the level of demand.
What’s most important to consider when selling a home?
Two most important factors are price and condition of a home. The first step is to price it properly. Then, go through the house to see if there are any cosmetic defects that can be repaired.
Another factor is the exposure it gets from marketing efforts. It’s important the home gets exposure through marketing efforts such as open houses, broker open houses, advertising, visible signage, and listing on the local multiple listing service (MLS), as well as the internet.
How much is my home worth?
A couple of ways people use to determine their homes value, is to have an appraisal done and conduct a CMA (comparative market analysis).
Appraisals average around $300-$400 for an average single family home and cost more to have done on multi-family housing. Appraisers consider various factors and base finings on recent sales of comparable properties, location, square footage, quality of fixtures and materials, land/lots size, views, and features such as garages, patios, number of bathrooms, and so on.
Your realtor can conduct a CMA which is an estimate of the market value of your home. CMAs are based on sales and listings that compete with your property. The comps (comparables) are homes similar in size, style and location.
What are some things I need to do to get my house ready to sell?
First step is to "declutter" counter tops, walls and rooms. You want prospective buyers to imagine their possessions in your rooms. Clean all rooms, furnishings, floors, walls and ceilings. It's especially important that the bathrooms and kitchen are very clean. Organize closets and get rid of clutter. Make sure basic appliances and fixtures work properly. Fix leaks. Create a pleasant atmosphere for open house guests such as making sure your house smells good and there is soft music playing in the back ground.
Another important thing is "curb appeal." You want your home to make a good first impression. People driving by will judge your home from outside, and decide right then if they want to spend the time to see the inside.
Other questions
Should I make repairs?
Conduct minor repairs if you have the ability to do so before putting the house on the market as doing so may lead to a better sales price. Buyers often include an "inspection clause" as a contingency in the sales contract. This contingency allows them to back out if numerous defects are found during the inspection and if they decide they do not want to deal with the repair, or the defect is such that they don’t feel safe purchasing the home.
Once problems are found, buyers can negotiate repairs or ask for a lower price from the seller. Any known problems that are not repaired must be revealed as a defect in the disclosure. You don’t have to repair the problem, only reveal it and the house should be appropriately priced for that defect. Another thing you can do is offer a concession at closing to the buyer in the amount the repair is estimated to cost. Consult several contractors and get quotes for the repair.
What are my obligations to disclose?
Items sellers often disclose include: HOA (homeowners association) dues, if there are any issues that violate building codes and permits, the presence of neighborhood nuisances or noises, any restrictions on the use of property (especially usage that is limited to zoning ordinances or association rules).
Ask questions if you are unsure or if something of a concern is not noted in the seller’s disclosure.
Must I disclose the terms of other offers?
No, sellers do not have to disclose the details of other offers to potential buyers. You can disclose that other offers have been made, so that all parties are aware that they should be submitting their best offer.
Are there standard contingencies in an offer?
Two basic contingencies in a sales contract are financing and inspections. Another important contingency is the length of closing.
What do I do if my house isn't getting offers or activity is low?
If your home is not getting offers or the activity it needs in order to sell it could be because it’s overpriced. One thing you can do is lower the price. Make sure there is nothing about the house that is turning off potential buyers.
The next step is to make sure that the home is getting the right exposure through marketing efforts, open houses, broker open houses, advertising, good signage and listing on the MLS (multiple listing service) and internet.
Another option is to take the home off the market and wait for overall housing conditions to improve and catch up to the price you want.
What is a short sale?
If a seller needs to sell their home but they owe the lender more than the home is worth according to current market conditions (a condition known as being upside down on a mortgage/underwater), then the seller may need to conduct a short sale.
If the seller is experiencing a hardship, then sometimes home owners can negotiate with their lender and split the difference between the sale price and loan amount, which still must be paid.
If the mortgage has been sold into the secondary market, the lender will have to get permission from Fannie Mae or Freddie Mac to negotiate a short sale. Fannie Mae has a policy of examining each loan individually. If the loan was a low-down-payment mortgage with PMI (private mortgage insurance), the lender needs to involve the mortgage insurance company that insured the low-down loan. Once these issues are resolved or negotiated, the house may be sold.
Will a foreclosure affect my credit?
Yes, foreclosure will have an effect on your credit report for a number of years, typically 7-10 years.
Before you consider foreclosure, speak to your lender as they might provide specific answers regarding possible courses of action available to you. They will also be able to tell you the effects certain actions might have on your credit.
A ‘deed in lieu of foreclosure’ or a ‘short sale’ will negatively impact your credit but not as drastically as foreclosure.
How long do foreclosures stay on credit reports?
Typically they stay on a credit report for 7 to 10 years. There are some lenders who will consider an applicant who went through a foreclosure, as long as good credit has been reestablished. Another factor lenders will consider is the nature of the foreclosure. Lenders will consider if the buyer went into foreclosure due to a hardship not of their own doing (difficulties with health, job layoff, etc.), or did the buyer go through foreclosure because they were over leveraged?