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Along with
location and condition, the pricing of a house is a major component of the
reasons why a house will--or will not--sell quickly. Although the pricing
should not be dealt with lightly, some sellers have a tendency to put too
much emphasis on the price and not enough on the condition, ending up with
a house that is overpriced for its current condition and the overall
market. Even if you find an unaware buyer that appears willing to pay the
high price, when the buyer applies for a mortgage, the chances are good
that the lender's appraisal will force the price back down to market
value.
 Care
and time should be taken when establishing the original listing price.
If
the house is overpriced, it won't sell.
If
you overprice the house with the intention of reducing the price later
just to "see what the market will bear", when the price of the house is
lowered, it signals to buyers that it was (and still may be) overpriced.
If
the house is under priced, it most likely will sell quickly--to the
detriment of your net proceeds.
Factors that affect the price
Location:
You can't get away from this one. If your house is located in a desirable
area that is in demand, you will be able to get a higher price than you
can for the same house in a less desirable area.
Condition:
A house that has been better maintained and shows better will always sell
for more than one that has had deferred (neglected) maintenance and needs
work.
Desirable
amenities:
If a house has amenities that are currently popular in the marketplace, it
will bring a higher price.
Methods of setting the price
A comparison of similar properties in the same general area that compares
actual sold prices. We provide this information on your home through our
On-Line Home Evaluation Service so you can obtain an accurate report on
the value of your home before listing it for sale. Some of the information
you'll see includes address, sale date, price and square footage for up to
30 comparable properties in real time. Buyers: use the
On-Line Home Evaluation Service to obtain up to date values of houses
you're interested in, important Phone Numbers, Agencies, Services, and
Demographic info for the town, or street you are thinking of moving to.
Sample reports are available. Get a Home Evaluation/Report.
An estimated valuation is placed specifically on your house by a
professional appraiser. An appraisal will take into account location,
condition and sale prices of comparable properties in the neighborhood.
Selling a House - "For Sale by Owner"
With the potential
rewards that can be gained--saving $4000, $8,000, $12,000 or more (minus
your expenses) by not having to pay a Brokerage commission, many people
wonder why 20% of home sellers undertake the task of selling their houses
on their own. Possibly it has something to do with expertise. Many home
owners who consider a self sale of their house back off when they see the
level of knowledge and commitment that is needed to do an effective job.
If you decide, however, that self-selling is the best option for you, you
will find the vast majority of the information on our Web Site to be of
value. Most of what you will find here will be geared to either doing the
job yourself. The most successful home sellers are those who take an
active role in the process.
If you feel that the best route is to sell your home yourself, then having
as much information at hand is crucial..
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Advantages Of Selling A House On Your Own
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There is no Brokerage Fee (commission) to be paid. You receive all
of the proceeds. |
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You are in total control of the transaction. |
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If mistakes are made, they are your own. Who better can represent
your home then you the homeowner who has had a relationship with
that property for years. Brokers know nothing about your home.
Generally they take one quick look and cannot point out benefits
that you the homeowner can reveal to potential buyers. |
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If your equity is low, you may be able to sell your house without
having to write a check. |
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You are always available at the home for showings, answering
inquiries, etc. |
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Disadvantages Of Selling A House On Your Own
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You must rely on your own instincts, however with your customer
service rep to advise you, you’re not alone in the process. |
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All marketing and advertising costs are your own. For an economical
way of marketing your home with massive coverage 32,000 locations. |
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Without all the tools in hand, you may under price or overprice the
house. For information on getting price comparisons for your
neighborhood, visit the business directory. |
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As you approach negotiations, you must sever emotional ties with
your house. |
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Hints on Selling Your House on Your Own
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Establish an accurate value by using an Appraiser.
Familiarize yourself with
offers and contracts now--don't wait until you have one in your
hand.
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Preparing Your Home
As has been mentioned
elsewhere, the three most important factors in selling a house are
location, condition, and price. Unless you have access to a reasonable
house mover, there is little you can do about the location of your house.
If it is priced correctly, the most crucial thing you can then accomplish
is to make the preparation of your house for sale better than any of your
competition.
Even if you have been extremely conscientious in the maintenance of your
home during the time that you have owned it, putting it on the market
requires taking the next step, which is to check every aspect of your
house, repairing, freshening, or changing whatever necessary.
Preparing Your House--Exterior
The first
step in preparing the exterior of your house--a buyer's first introduction
to it--is to take a clear-headed look at the house from the street. Stand
at the curb and look at your house as a buyer might. What stands out and
catches your eye? The beautiful landscaping and the new roof? Or does
something else strike you? The faded exterior paint? The ruts in the
driveway? The 2 missing shutters? Remember, this is how your home will
"introduce" itself to a potential buyer. If the appeal isn't there, they
will likely move on to the next available house, no matter how beautiful
the interior of your house may be!
If you need major improvements or renovations to your house, do them
before you put it on the market.
The average buyer simply does not have the "vision" necessary to see the
job done (if you are planning to do the improvements prior to closing). If
you are attempting to sell the house as a "fixer-upper" be aware that even
though many buyers say that
this is what they want, when confronted with the prospect of actually
buying one, they often run for
the hills!
If you are in need of a contractor for improvements or renovations, visit
this list of contractors.
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Exterior Preparation
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Overall appearance:
Remove any junk or
clutter from the yard. This includes tree limbs and leaves, but
especially goes for junk cars or parts, lawn tractors, etc.
Overall appearance:
If the exterior of
the house is dirty or moldy, power washes it. If it is in need of
paint, get competitive bids if you can't do it yourself.
Grass:
If possible,
reseed any bare areas of the lawn.
Landscaping:
Trim all shrubbery and plantings. Trim trees if necessary,
especially dead limbs.
Driveway:
If the driveway is stone and looking lean, add a coat of gravel. If
it is asphalt, consider resealing.
Decks and porches:
Power wash and seal, stain or paint.
Gutters and downspouts:
Check gutters and downspouts to make sure they are clear and
functioning properly.
Lights:
Make sure that all
exterior lights are operational.
Landscaping:
If the season is right, plant colorful flowers where appropriate.
Landscaping:
Add mulch to
planting beds and around trees. An inexpensive but very effective
way of freshening the look of the yard.
Windows:
Make sure the exterior (and the interior) of windows is clean and
operational. |
Preparing Your House--Interior
If you get
the buyer into the house, it is important to make their visit as pleasant
as possible--and that means having the whole house ready. You want them to
be as comfortable as possible, and to linger in the home. A "turn off"
will send them scurrying quickly to the next house on their list!
One Room At A Time
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Entry |
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Must be especially
inviting for your guests (your potential buyers). Make certain it is
well lit, clean and has nothing laying around either inside or
outside. Paint the front door if it even remotely needs it. |
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If you normally
use a back or side entrance to your house, pay particular attention
to the front entry. You rarely see it but this is where the buyers
will enter! |
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Living Room or Great Room
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If possible, keep
furniture at a bare minimum so that traffic flow is easier and the
room does not appear smaller than it actually is. |
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If bookshelves,
curio cabinets, and the like are overflowing with books and
knick-knacks, remove some of them. |
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Family Room |
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If this is the
room you live in the most, make it look inviting but not overly
lived in. |
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Keep furniture at
a minimum but make the room look like a comfortable place to spend
time. |
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Kitchen |
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Clean the exterior
of all appliances. Clean the oven interior. |
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Clean or replace
the stove hood filter. This is often overlooked, usually dirty and
greasy, and looked at by a lot of buyers. |
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Clean cabinet
faces. Make them shine! |
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Remove all clutter
and unnecessary items from countertops and clean all countertops and
backsplashes thoroughly. |
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Clean vinyl or
ceramic floor. |
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If you have
ceramic tile elsewhere in the kitchen, pay particular attention to
the grout--make sure that it's clean. If it is discolored, there are
"grout whitening" products that are available.
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Bedrooms |
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Remove all
clutter. If you don't need it, store it or pitch it! |
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Arrange or remove
furniture to maintain good traffic flow through rooms. Remember,
there may be three or four people in each group that walk through
your house. |
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Bathrooms |
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Make sure all
bulbs are working and have the highest wattage available and safe
for each fixture. Brighter is better! |
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Clean all ceramic
tiles. Check the grout for cleanliness and deterioration. |
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If faucets drip,
fix them. |
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Thoroughly clean
sinks and tubs. If rust spots are on the porcelain, attempt to
remove them. |
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Remove any
evidence of mildew from the shower and bathtub. Products are
available that spray on and quickly kill the mildew. |
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Basement |
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If the basement is
damp or musty, consider a dehumidifier. |
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Give prospective
buyers room to move around. Clutter...well, you know the drill! |
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Garage |
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Remove all junk:
broken tools, old car parts, toys from the 1960's, etc. |
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If floor has oil
marks, clean it (cleaning solutions are available at most home
improvement stores and work with a normal garden hose). |
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Miscellaneous |
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Replace the
furnace filter. |
Preparing Your House--Interior
Many home sellers make the mistake of ignoring certain repair or
maintenance items in the hope that a potential buyer will either not
notice, or if they do, telling them that they (the seller) will repair or
replace the item. Most buyers do not
have vision. They are not able to look at a room that needs paint and
carpet and imagine it fresh and attractive. Telling them that something
will be cleaned, or painted, or repaired may work with some, but the
majority will not be able to envision the house after the changes have
been made and will scratch your house from their list.
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Interior Preparation
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Painting:
When it comes to preparing a house, painting gives you the best
return for money spent. Which rooms should you paint? Any that have
dirty or marked walls or any rooms that are currently painted in
dark colors. Keep it neutral--off white or antique white is the
best. |
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Carpeting:
At the very least, all carpeting needs to be steam cleaned. Any
worn, stained or foul smelling carpet should be replaced. You may be
tempted to give a "carpet allowance" and that may work. Just
remember, most buyers do not have vision. |
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Operation:
If you are not having a whole house
inspection
done, check all faucets, toilets, and electrical items for correct
operation. |
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Safety:
Make sure that your house is safe. Not only can a wobbly railing
stop a sale, it Could also cause an injury to a potential buyer who
is not familiar with your house (and is spending time looking
instead of being careful). |
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Clutter:
If an item is not necessary for your day-to-day life, box it up and
store it or throw it out! |
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Fireplace:
Have a professional fireplace or woodstove cleaning and inspection.
The buyer will most likely request it anyhow. Getting it done in
advance impresses the buyer and makes the home appear cleaner and
fresher smelling. |
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Closets:
Make sure all closets are neat, clean, and organized. See above item
on clutter. |
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Doors and Windows:
Check all for smooth operation. Replace any cracked window panes. |
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Cleaning:
Even though you may consider your house clean and tidy, a thorough
cleaning--including dusting, washing, and waxing everything--will
always make a house more appealing. |
Time To Show Your Home!
Your house has been
checked, inspected, and cleaned from top to bottom. You have priced it at
what you feel is a fair price. The marketing and advertising program is in
full swing. Now it is time to put all of the preparation into action:
showings! All of the work that you have done up to this point will only
have an effect when a buyer walks into your house for the first time.
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Showing Your House To Maximum Advantage
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Give all family
members assigned jobs in advance that will go into action when a
short-notice showing is scheduled. Everyone must know their duties and
carry them out, so that you don't end up banging into one another
trying to get everything done quickly. |
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Open every window
covering. All drapes, curtains and blinds should be positioned to let
in maximum light. Buyers like a house to be "light and bright," so
accommodate them! Turn on as many lights as possible. |
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Make sure the house
smells good. Baking
cookies, often recommended, may be overdoing it, but pet odors, smoke,
or greasy cooking odors definitely will
not work! Air out the house
just before the scheduled showing, but close the windows (unless it is
a perfect day) before they arrive. |
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Six very important
words: no clutter, no clutter, no clutter! |
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Make sure that
everything is spotless. Pay particular attention to the bathrooms and
the kitchen. In the bathrooms, towels should be fresh and clean, sinks
and baths scrubbed, and the floor freshly cleaned. In the kitchen,
make sure all dishes are put away and countertops and sinks cleaned. |
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Check the thermostat
to make sure that the house is at a comfortable temperature. |
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Remove pets from the
house, or at least, keep them outside. Pets under foot will quickly
put a damper on an otherwise positive showing. |
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Make sure Fact
Sheets are available and easily accessible. |
Home Improvements
An
important part of the ownership of a home is the preparation for its
eventual sale. A good example of this is maintaining records of any
capital improvements that you make to the house, since the value of these
add to the basis of your house. When your house has sold and all proceeds
have been collected, your capital gains will be based on the difference
between the sales prices (less any selling expenses) minus the adjusted
basis. The IRS lists the following as increases to basis:
1) Improvements
2) Additions
3) Special assessments for local improvements, and
4) Amounts you spent after a casualty to restore damaged property.
The IRS
defines improvements as those items that "add to the value of your home,
prolong its useful life, or adapt it to new uses. You add the cost of
improvements to the basis of your property."
Examples:
Putting a recreation room in your unfinished basement, adding another
bathroom or bedroom, putting up a fence, putting in new plumbing or
wiring, putting on a new roof, or paving your driveway are improvements.
The chart
below lists some other examples of improvements
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Additions |
Miscellaneous |
Plumbing |
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Bedroom
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Storm windows, doors
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Septic system
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Bathroom
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New roof
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Water heater
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Deck
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Central vacuum
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Soft water system
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Garage
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Wiring upgrades
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Filtration system
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Porch
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Satellite dish
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Interior Improvements
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Patio
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Security system
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Built-in appliances
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Lawn & Grounds |
Heating and Air Conditioning
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Kitchen
modernization |
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Landscaping
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Heating system
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Flooring
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Walkway
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Central air
conditioning |
Wall-to-wall
carpeting |
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Fence
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Furnace
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Insulation |
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Retaining wall
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Duct work
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Attic
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Sprinkler system
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Central humidifier
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Walls, floor
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Swimming pool
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Filtration system
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Pipes, duct work
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Record keeping.
You should keep records
to prove your home's adjusted basis. Ordinarily, you must keep records for
3 years after the due date for filing your return for the tax year in
which you sold your home. But if the basis of your old home affects the
basis of your new one, such as when you sold your old home before May 7,
1997, and postponed tax on any gain, you should keep those records as long
as they are needed for tax purposes.
The records you should keep suggested
by the IRS include:
1) Proof of the home's
purchase price and purchase expenses
2) Receipts and other records for all improvements, additions, and other
items that affect the home's adjusted basis
3) Any Form 2119 that you filed to postpone gain from the sale of a
previous home before May 7, 1997
4) Any worksheets you used to prepare Form 2119, such as the Adjusted
Basis of Home Sold Worksheet or the Capital Improvements Worksheet from
the Form 2119 instructions
A Pre-Listing Whole House Inspection
It is
pretty safe to assume that a buyer who contracts to buy your house will
want to have a professional whole house inspection conducted. Most sale
contracts are written with a "contingent upon an acceptable whole house
inspection" clause. So why not wait until you have a buyer who wants and
will pay for an inspection? While many sellers do wait for just this
situation, there are a few compelling reasons for you, the seller, to
invest in a professional whole house inspection
before listing your house.
1) If you were planning
to do any cosmetic repairs or remodeling before listing your house, an
inspection may reveal additional defects that your cosmetic repairs could
have masked. A pre-listing inspection gives you the opportunity to fix
possible underlying problems right the first time. This saves you the
time, trouble, and money of fixing a seemingly small repair, then finding
out there is a larger problem, forcing you to destroy your work, fix the
underlying problem, and then do the cosmetic repair all over again.
2) You will know, in
advance, of defects. You will have an opportunity to repair them before
the first potential buyer ever sees your house. Experience has shown that
when a buyer, through their own home inspection, finds a defect, they tend
to look for more.
3) A completed whole
house inspection signals to buyers that you are a conscientious seller. If
a buyer is torn between two houses--your house and another that has not
been pre-inspected--it is very possible they may feel more comfortable
with yours.
4) It removes an
"unknown" from your selling process. There are plenty of "unknowns" when
you sell a house--when will it sell? How much will it sell for? Will the
buyer's financing be approved? By discovering (and repairing) any defects
up front, you remove at least one uncertainty from the selling process.
What to look for in a
professional inspector and inspection.
NOTE: Doing a
pre-listing whole house inspection does not guarantee that a buyer will
not opt to have another done at the time of the contract. Nor does it
guarantee that the second inspector will not find items that first did not
discover (or think important enough to note). What it does guarantee,
though, is evidence that you have spent the time (and the money) to make
sure that the
house is without defect. In addition, if you get into a contract squabble
over repairs at contract time, you will have evidence backing up your
position.
Yard Sales
Many home
sellers have a "moving sale"--they hold a yard or garage sale after their
home has been sold, right before they move. It is a much better idea to
hold your sale before you
even put your house on the market. If you have visited any of the other
pages on this Site, you probably know how important it is to not have any
clutter, excess furniture, or just plain junk anywhere in your house when
it is on the market. A perfect opportunity to get this accomplished is to
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Have a yard sale as soon as you decide to list your house to sell any
excess items.
Hints for a
successful yard sale |
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Plan at least 2
weeks in advance so you can schedule advertising. |
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Organize everything
that you will be selling. Keep like items together from the beginning. |
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Prepare signs to be
put up the night before the sale. Locate areas where signs can
effectively (and legally) be placed. |
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Put prices on
everything before the sale. It will save you a lot of time answering
questions and buyers will feel more comfortable. But, be prepared to
negotiate! |
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Have as many tables
available as possible to place items for sale on. |
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Have $25 or $30 in
small bills and coins for change. |
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The day of the sale
get up early and prepare. Your first customers will probably be early! |
Offers
All the
decisions have been made. The house has been prepared like a model.
Advertising and marketing has begun. The listing is in the MLS and the
showings are in full swing. Now it is time for the reason that all the
work has been done: an offer.
An offer in Real Estate is a bit different than it is in many businesses.
If a buyer asks a shopkeeper "could I buy this for $10?" and the
shopkeeper accepts the offer, the buyer can still change their mind and
walk away. Not so when you are dealing in Real Estate. When a buyer makes
an offer, it is in the form of a legal contract. If you, as the seller,
accept the offer, the house is sold. If you counter-offer, negotiations
may continue. It is important to understand that all of the offer and
counter-offer activity that you will engage in is framed legally.
This is why it is so important that a seller
never gets involved in oral
offers and negotiation. If you have a house listed at $175,000 and the
buyer asks "would you sell the house for $165,000?" almost any response
you make--short of "put it in writing"--can cause problems. If you
verbally accept the offer, not only does the buyer have no obligation to
actually buy the house, many will say to themselves, "gee, that was
easy....I wonder if $150,000 would work?" This is why an Agent will never
deal in verbal offers. If you are selling on your own, it is very good
advice!
Some important points regarding offers
1) If you
intend to accept an offer (or make a counter-offer), do it as soon as
possible. At any time prior to your acceptance or counter-offer, a buyer
can withdraw their offer.
EXAMPLE: Seller Jones
receives an offer from Buyer Brown. The acceptance date on the contract is
the next day at 6:00 PM. Seller Jones knows that he is going to
counter-offer at a price just a bit over Buyer Brown's offer. At noon the
next day, Buyer Brown, in a cold sweat, withdraws the offer. Seller Jones
is out of luck.
2) Any changes made on the contract require written approval of all
parties for the contract to be enforceable. Even seemingly minor changes
open the door for either the seller or buyer to change their mind.
EXAMPLE: Seller Smith
receives an offer on his house. He accepts all of the conditions of the
offer (selling price, financing agreements, etc.) except for one. He
changes the occupancy date from July 31st at 12:00 noon to July 31st at
6:00 PM, wanting to give himself a bit more time for moving. If the buyers
agree (in writing), there is no problem and the contract is valid. If the
buyers change their mind about buying the house, however, the contract is
not enforceable. There has been a change (the occupancy time) that has
been approved by only one party to the contract.
What about low offers?
No matter
how well you have prepared your house and how certain you are that it is
priced at fair market value, there is always the possibility of receiving
a low offer. It could be simply a shot in the dark, or it could be due to
a limit in the buyer's mortgage qualification ability. No matter what the
case is, though, the most important thing to remember is do not take it
personally. Many home negotiations, if they had just been allowed to run
their course, very well may have come together acceptably for all
concerned if the negotiations hadn't fallen into a "grudge match". Yes, it
is your home, and yes, you have put a great deal of love and effort into
it, but taking a low offer as a personal affront solves no purpose. Reject
the offer or counter-offer it and move on.
If you do get a low offer, it is far more important to try to get as much
information as you can relative to the offer.
Why was it at the price that
it was? What was the motivation of the offer? (Be aware, though, that if
the offer has come from a Buyer's Agent, the information you receive will
only be as much as the Buyer's Agent wants you to know. They owe their
loyalty to the buyer and cannot disclose any information that may put
their client at a disadvantage.) There still may be information that will
be revealed to you, which will help you as you structure a counter-offer.
Sales Contracts
Becoming familiar with
the components of a contract before you have one presented to you puts you
in a better position when it comes time to negotiate one.
What
are the Components of a Contract
Although there will be
some variance based on the location of your residence, most Real Estate
contracts contain most or all of the following items:
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The Sales Contract: What It Includes
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What:
A legal description of the property as well as the street address. |
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