Selling Your House?

Selling Your House?So you are thinking about selling your house and you are wondering, “Where do I start?” In my experience there are a few important things to put at the top of your list. The first thing that most people wonder about when they are thinking about selling is, “how much is my house worth or how much can I get for it?” Now, you could do what a lot of people do and that is talk to your new neighbors and ask them what they paid for their house or ask around and see if anyone has had their house appraised lately and try to get an idea of value from that. Here are the reasons why that may not get you accurate information: 1) Neighbors very rarely tell the truth about what they actually paid for their house. Now I don’t mean to be negative, I’m sure your neighbors are very nice people and are very honest on the whole, but for some reason, people get funny when it comes to talking about big ticket items or large investments. 2) Appraisals are a relative thing. If they were refinancing their house for instance and got an appraisal the amount may be more generous depending on whether they were taking money out of their house or not. If they just purchased it and they got an appraisal when they bought it, the appraisal is for the purposes of a mortgage and may only be for the amount that they offered to buy it for and not show any value that was in it above that amount.

The best bet when you are trying to figure out exactly what your house is worth and what you might be able to sell it for is to call a local real estate agent who has access to the most current market sales data and ask them to tell you what homes in your neighborhood, that are like yours, are selling for recently. The two important components to that are: in your area and like your house. You want to make sure that when they look for comparable sales, they are searching the area that is closest to you and looking for houses that match yours as closely as you can find. You don’t want them showing you the sale of a house that is 3 miles away, 20 years older and not remodeled at all or top of the line remodeled if it doesn’t match the condition of your house. Most good real estate agents will ask you a few questions about your house or even come to see it ( that is the most accurate method) before they attempt to find houses that might match it. Once they have a good idea of what your house has in it and what condition it is in, they can peruse through all the recent sales and find you a few good comparable properties that have sold or might be recently under contract and that will give you the best idea of what you can expect. Understand that the real estate market is an ever changing animal and what your neighbors house sold for 18 months ago, may not be at all reflective of what it might sell for today. The most current data is important. The real estate market can change dramatically even within the same year. Houses typically tend to sell for more during the months of April-August than they do during December and January, so keep an eye on that as well.

Your best bet is to find a good realtor that knows the area and can give you an idea of not only what houses like yours are selling for, but how many days on the market is it taking to get them sold, what is the percentage of the list price that they are selling for, What are the features that are most popular in the area? Are buyers in this area typically asking for seller’s to pay closing costs? Are there issues in the area that are deterring sales? Radon? Traffic? The new shopping mall going in next door? Etc. You are going to want to know as much as you can and finding an agent that knows that area, makes a big difference. Now, this isn’t the only factor to consider when choosing an agent, but definitely ask the question, especially when you are discussing value.

Kitchen With Cherry Wood CabinetryOnce you have established a solid idea of what your home is worth, the next question should be “Are there things that I need to do to my house in order for it to be ready to sell?” You may need to work on your curb appeal a bit or your house may be in dire need of some touch up paint. You may have kitchen counters that are cracked, faded and leave the kitchen looking terribly dull or you may have a sliding glass door that doesn’t open correctly. Start making a list of 1) things that are a must do, broken, not working correctly, holes in the walls or items that detract substantially from the house and then 2) things that if you have the time and money, these things will help the house show better or add value overall. It is very helpful to get a realtor to come over and walk through your house with you and give you their professional opinion. Why? Well as a realtor, it is my job day in and day out to show houses to buyers, so I am very frequently in a position of looking at a house from a buyers perspective (very handy perspective to have when you are a seller) or I am walking through houses for sellers and helping them to get a house ready to sell. In other words, I do this all day long and I have a pretty keen insight into what buyers are looking for and what will and won’t add value to a house when you are selling. It also helps to have someone who is NOT EMOTIONALLY CONNECTED to your house, be the person giving the unbiased opinion. You live there, you love your aquamarine accent wall in your kitchen and you can’t see how anyone else wouldn’t love it too. You need help, admit it, seek it out and listen to it.

Now that you have your list, decide if you are hiring or doing it yourself and then get to work. Typically you want to have your work done, projects completed and the house in show ready condition when we sit down to do the paperwork. I will often get people saying things like,” Can’t I just offer a carpet allowance to the buyers if they decide they don’t like my old ratty carpet?” Well, yes, you can do that, but is it the plan of action that is going to get you the best possible price on your house? No. It is important to remember that buyers on the whole are very visual when shopping for a house. They make decisions based on what they see, not on what they have been told will happen. You can offer an allowance at closing to replace the carpets, but when the buyers walk through your house, all they see is the ratty old carpet, not the new carpet that will conceivably be there later. Often times a buyer is less likely to make a good offer on a home that with their eyes they perceive as in disrepair or “needing new carpet” and more likely to make an offer on a house if the new carpet is already in place and they can see the finished product. Very few buyers have the imagination to picture it as it will be instead of how it is.

I have attached a PDF here of a few of the things that Coldwell Banker recommends that you consider before getting ready to sell. This is a good place to start. My recommendation is that if you are expecting top dollar for you house, you need to get your house into “model home” condition. Get it as perfect, polished and clean as you can before anyone comes to see it.

I also frequently get the question, “Will remodeling my bathroom/kitchen/basement really get me more money when I sell?” The answer to that is, it depends. I know, vague, but true. Every house is different and the market, comparables and competition is going to be different on every house too. Some neighborhoods are a little more high end and it is very common for houses to have remodeled kitchens, and second bathrooms, so your house with the original formica counters and one bathroom is really going to struggle to compete. In that case, you may want to look at updating the counter tops and maybe finishing off that second bathroom in the basement and it likely will largely improve your saleability and the final sales price. But if you are in a neighborhood where most of the homes are newer, have unfinished basements and haven’t even had a chance to finish off their backyards, you likely won’t gain much from updating your bathroom that is 3 years old or putting in that theater room. While those things will certainly help you sell your house easier, they aren’t necessarily going to get you any more money than you could get without them, so don’t waste your cash.

Spacious bedroom with beamed wooden ceilingAgain, the trick is to hire someone who knows your neighborhood, knows the houses that compare to yours in the market and can tell you whether the projects you have planned are going to get you any more money when you sell or not. Many times over the years I have counseled my clients to save their money, skip a project they were planning and simply wait and see what we could get them without it. Almost every time, they were glad that they did. My job is not only to help you know what to do to get your house ready to sell, but to also help you maximize every dollar you have, even if that means stopping you from spending it on something that won’t pay you back.

Once you have spent some time finishing up the projects on your house and you feel that your house is ready for its big debut, it’s time to call your realtor and make an appointment. Get your realtor over to do a final walk through your house and assess the condition, if some of your changes have helped with increasing the value of the house and sales price and if there are any last minute de-cluttering or touch up things that you might need to do. At this point you are ready to do the paperwork and get your house listed and on the market. You realtor will come with a small collection of paperwork that needs to be filled out and sit down with you to go through everything and get it done. There are a few things that might be good for you to think about ahead of time here. One of the forms that you will need to complete is an Multiple Listing System input form. This is the form that is used to put all of the details and information about your house on the MLS which is the website that ALL of the other websites pull their information from, so it is important that you get the information correct. You want to make sure that you have all of the upgrades and improvements you have made to the home in your mind or on a list as well as a list of the big items that you are willing to leave with the house and which ones you are definitely taking with you. Things like, the refrigerator, water softener, washer and dryer, extra freezers, drapes, basketball standards, decorative mirrors in the bathroom etc are things that you may be planning on taking with you and will want to make sure that they are excluded on the MLS sheet so that when buyers are looking at your house they will know that those items do not come with the house. You can certainly include any large items like this that might add value to the house if you would like and see if any buyer is interested. Often times first time homebuyers are thrilled and willing to negotiate or pay a little more for a house if you leave the fridge behind for them. The same is true of the washer and dryer, especially if they are nice and in good condition. You also want to make your realtor aware of any energy efficient items that you may have in the house as well as the age of your furnace, water heater and roof as these are common questions from buyers.

Once you have completed the paperwork, you need to decide on things like the placement of the key box and the sign and if your house is a good candidate for open houses or not. Some houses are in areas where open houses are very successful and some areas are just not productive for open houses. You can discuss this with your realtor and decide if this is going to be part of your marketing plan. At this point you will also prepare for pictures to be taken. Personally, I like to take pictures of my listings myself. I haven’t had good luck with hiring companies to do it and have not been happy with the result, so I elected to do it myself. I have a high quality camera and I will take plenty of time to make sure that I get the light and angles correct and get good pictures of all the important rooms and features. Other agents like to hire a company to come and take pictures and if that is the case you will just need to coordinate with them for that. Understand that good pictures are crucial for a house listing. The majority of buyers do their home shopping online before they ever go out and see anything in person and they typically determine which houses they want to go see by looking at listings and their pictures online and narrowing homes down from there. If you do not have good pictures on your listing, buyers will skip right over it and never bother to come see it in person. You don’t want that to happen to your house.

Once you have gotten pictures taken, and the key box is installed, you are ready for your agent to start scheduling showings. Essentially how it works is that your agent will take all of the paperwork that you filled out with them and turn that in to create a file. They will then upload all of the information from your MLS sheet to the MLS system along with the pictures of your house. This process can take up to a day or two depending on how you do your pictures. Once all of this is uploaded your house listing will go up on the website and show as active. Now all of the agents and people out there searching for houses in your area will be able to see your house and will start calling. I have gotten calls on a new Iisting within minutes of it going live, so be prepared to get calls right way. You may not, and it may take a few days for you to get any call, but be ready either way. I think my record is selling a house within 8 hours of having it listed on the MLS. That is showing, getting an offer, presenting the offer and accepting the offer within 8 hours. It is rare, but honestly you just never know who is out there waiting to buy your house. On the other side, don’t be discouraged if things are quiet and it takes a little while to start getting showings. Every neighborhood and area is different and some just take time to get going. I usually sit down with my clients right in the beginning and discuss a marketing plan with them and we go over what to expect. If you would like to see a copy of my personal Listing Plan of Action, contact me through my website here and I will be happy to email you a copy. I have attached a few of the things that make listing with Coldwell Banker a great choice here if you are curious. There is so much to marketing a home effectively and these are just a few points. One of the more important parts of the plan is to discuss how long you are going to wait at the starting price before you decide on a price reduction. Statistics show that you have your best shot at getting a good offer within the first 2-3 weeks after listing. That is why my rule of thumb is that we see what kind of activity we get in the first two weeks and then assess from there. The numbers there are that it typically takes 8-10 showings on a house to get an offer, so if we haven’t gotten 8-10 showings in the first 2 weeks, we know that we need to make an adjustment. Unless there are some big issues that are deterring buyers from making an offer, things like bright pink carpet in the living room or the house has been a cluttered mess every time and it doesn’t show well, then the big item that needs to change and the major piece that you have control over is the price. 9 out of 10 times it is the purchase price that needs adjustment. Now, while an agent can do a market analysis and get a fairly good idea of what your house is going to sell for, every house is different and every market it different and every changing, so we aren’t always going to get it perfect every time. Often times, it takes a few adjustments and re-evaluations as we go to find the sweet spot. That is ok and pretty normal.