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Reasons to Sell |
Getting Financially Organized |
Preparing to Sell |
Your Real Estate Team |
Listing Contracts and Commissions |
Marketing Your Home |
Closing the Deal |
After You Sell
Marketing Your Home
Maximizing Your Chances, Pricing Incentives, Right Price, Advertising That Works, Strategies, Open Houses, Preparing Your Home, Financing, Appraiser's Inspection
Maximizing Your Chances
Today's market is incredibly fast paced. Most activity happens within the first four to six weeks. Any listing that has not sold in 45 days will be reassessed by your agent with regards to price and condition. Among the most important factors that influence salability are:
Your agent will use certain methods to insure that your home is appropriately priced. A comparative market analysis of homes in your area will be used to price your home. If your home has been listed and not yet sold, your agent will review all comparable sales since the listing date. Have other properties come on the market and sold since your listing was taken? If so, there will be no support for your current price when the appraiser does their work. Be certain that you are shown new competitive properties as they are listed. Ask to receive an updated competitive market analysis of homes recently sold.
It is in your best interest to follow your agent's advice with regard to staging your property. A change in seasons may reveal additional work that needs to be done around the property. Be sure to wash all windows inside and out, pressure wash walks and clean the roof, fertilize the lawn, trim shrubs and weed flowerbeds. Touch up or repaint interior and exterior. Store overflow from garage and closets in a mini-storage facility. Leave on interior and exterior lights during showings.
It is important that your agent has access to show your home. We highly recommend allowing your agent to use a key box. If this is not possible, be certain that your agent has good support systems in place to get keys to agents interested in showing your property. Flexibility and cooperation from you and your household will only lead to increased exposure of your home and a potentially faster selling period.
Using Pricing Incentives
In a buyers' market, the key to success is using incentives that help put a sale together.
You can increase the appeal of your home by offering buyers money in the form of special financial concessions. One or more of the following incentives may be the key to securing a deal together:
- Credits: One effective financial inducement is offering to pay a portion of your buyer's nonrecurring closing costs for such expenses as loan origination fees, title insurance, and property inspections. You may also graciously offer to pay for some or all of the repairs found by the property inspections. These payments are usually made as a credit from sellers to buyers.
- Seller financing: Financing some or all of the buyer's mortgage may get you a higher sale price, a faster sale, an attractive return on your money, and possibly a deferment on a portion of your capital gains tax.
- A home warranty: Home warranties are a valuable asset to sellers and buyers alike. By helping to alleviate buyer concerns about costly covered home repairs, home warranties make selling homes easier.
The Price has to be Right
The key to a successful sale lies in correctly pricing your home. It is proven that the first thirty days of a sale are the most important because it is the only time your home is considered "new on the market." If your home is overpriced you could miss this window of opportunity, compromising the value of your home. The following are some points to consider in order to best price your property.
- Together, we will analyze the current market, look for a window of opportunity in the price position, and place your property in a category that is most likely to succeed.
- In most instances an appraisal is required in financing a property, it is futile to price a property for more than its worth because it simply won't appraise.
- Appropriate pricing is very important-many potential buyers won't even look at an overpriced home to begin with because they think that it is out of their price range.
- An overpriced home tends to dampen the other real estate agents' attitudes, making it less likely to be shown.
- Overpricing lengthens marketing time and can result in a lower selling price than would have otherwise been obtained.
- A property left on the market for an extended period of time usually becomes "shop-worn," causing buyers to believe something is amiss.
- Most buyers are comparison shopping. Looking at your home may convince them to make an offer on a different property if yours is overpriced.
Advertising That Works
When you enlist an agent, you get our exclusive marketing programs. We give your home the attention it deserves by addressing its unique qualities. At our firm, we are proud to have been a part of the rich history of the Mid-Missouri area for many years and we look forward to helping you and your family with all of your real estate needs.
These Tools Will Assist You in Your Home Selling Process
- Listings on our web site: The World Wide Web is the most efficient marketing and communication tool because it provides instant information and imagery for home buyers. Our web site allows potential buyers to take a virtual tour of your property, including photos. Your home has tremendous exposure on the web site.
- Newspaper and Magazine Advertising: All of our advertisements include the web address, so potential buyers can access instant photos of your property.
- Multiple Listing Service: The Multiple Listing Service (MLS) is a comprehensive resource that serves as a tool to attract current buyers in the market place. The MLS does this by providing instant access to your property for all real estate agents and their buyers. It also allows agents and potential buyers to track homes that are new on the market, giving your home instant exposure from the first day it is listed. The MLS also allows agents to expose your home to new buyers as they come into the market place.
- The Home Seller and Buyer Advantage: Home sellers also have the opportunity to offer a home owner warranty as part of the sale agreement with the buyer, producing another large incentive for potential buyers. Offering a home warranty as part of the sale demonstrates a high level of trust and confidence to the potential home buyer, resulting in a major seller advantage.
As you prepare to sell your home, it is important to have a complete understanding of the items your agent will handle. Your Realtor® is dedicated to selling your home and helping you understand every part of the process. Here are just a few key things you can expect your agent to do for you, both now and in the future.
Initial marketing strategies
- Multiple Listing Service computer input (MLS)
- Listing and photos on the web site
- Advertisement in appropriate newspapers and/or publications
- Install a yard sign with contact information
- Install a key box
- Call potential prospects
- Prepare marketing and promotional materials
On-Going marketing strategies
- Follow-up with agents who have shown your home
- Inform you of any market changes or financing updates
- Inform and update agents of any price, financing, or physical changes in your property
- Handle negotiations and recommend adequate earnest money deposits
- Calculate estimated closing costs and net proceeds
- Follow-up on transaction with lender and title company
- Track contractual deadlines and closing procedures
If you hire a broker to sell your house, one of the first things your listing agent does after you've signed the listing contract is tell the local brokerage community about your property. One extremely effective way to get the word out is to schedule a brokers' open house -- a special open house exclusively for local real estate agents.
Agents generally work with at least four or five serious buyers at any given time. A brokers' open offers very targeted marketing.
Although your home may not appeal to every one of the agents' buyers, it will undoubtedly peak some interest. Well-priced, attractive properties almost always generate immediate showing requests. With the advent of cell phones, agents don't even have to wait until they get back to the office to call their clients about your property.
There are additional Open House opportunities available, including the GMAC exclusive Elegant Homes Tours as well as weekend open house tours. Contact your agent for more information.
Preparing Your Home
To ensure a successful sale, it is important to "package" your property so your home makes a good first impression on all potential buyers. Here are some suggestions on how to get your home properly prepared for sale.
Remember - First Impressions are Everything
- Look at your property objectively. Pretend you are seeing it for the first time through a potential buyer's eyes.
- Groom the grounds; keep the lawn trimmed and edged and tidy up porches and garage.
- Your front door gives a vital first impression. Be sure it is scrubbed and repainted if necessary.
- Wash windows and clean/dust window coverings.
- If any decorating is needed (especially the kitchen) now is the time to do it. Bathrooms help sell homes - make this room sparkle! A little bit of work can add up to a lot of value for you in the sale price.
- Be sure to leave lights on both inside and out when your house is being shown. Illumination is a welcome sign.
- Wash dishes, put away clothes, remove newspapers, etc.
- Make up beds with attractive spreads.
- Pack valuables now and store in a safe place.
- Many people are allergic to animals, so keep pets out of the way for showing and open houses.
- Leave the showing to the agent. The agent knows the buyer's requirements and can best emphasize the features of your home. If it's possible, we suggest leaving the property all together during this time.
- It's best not to discuss anything concerning the sale with a potential customer. Let your Realtorr discuss price, terms, possession, and other factors concerning the sale. Your Realtorr is qualified to bring negotiations to a favorable conclusion.
- Never apologize for appearance. It either distracts or accentuates a problem.
- Avoid having too many people present during showings. The potential buyer will feel like an intruder and will hurry through the house. Do not allow children to tag along on the visitors' tour.
To help expedite the sale of your home and the subsequent move into your new home in a timely fashion, it's important to discuss your options with your agent. Some examples are:
- Seller-paid help with closing costs or loan fees
- Seller-paid buy-downs on interest rates
- Identify any applicable financing programs that would expand the market (ie: FHA, VA and "Rehab" loans).
Bridge loan program
A Bridge Loan is a temporary financing arrangement provided by mortgage companies, which allows you to make the purchase of your new home before the sale of your current home is finalized. In essence, if you sign a purchase and sales agreement that is contingent upon the sale of your current home, a Bridge Loan can protect your offer from being displaced by another buyer.
Capital gains tax
The Taxpayer Relief Act of 1997 excludes home owners from capital gains on the sale of a principal residence as long as certain guidelines are met. The first is that an individual must not exceed a gains of over $250,000 on the sale of a residence; the exclusion increases to $500,000 for joint filers. Any gains incurred above these limits will be taxed at the 20% capital gains rate. To qualify for exemption you must have owned and occupied the residence for a minimum of two of the last five years from the date of the sale. Another benefit of this exclusion is that you do not have to roll the gain of your last home into another, more expensive home, allowing home owners to freely choose the type of housing they want. For further information about capital gains tax, consult with a tax consultant.
After you accept an offer to purchase your property there is one extremely important showing remaining: the inspection an appraiser makes as a condition of your buyer's loan approval. This final showing to the appraiser is critically important.
Appraisers use three basic methods to arrive at a conclusion of property value: the sales comparison approach, the cost approach and the income capitalization approach. Wherever appropriate, all three methods are used in an appraisal.
- Sales Comparison Approach
The sales comparison approach is used to compare sales of similar properties, taking into account differences among properties that may affect value. The sales comparison approach is typically the most applicable method of valuing single-family houses, townhouses and condominiums.
- Cost Approach
The cost approach is based on the current cost of replacing or reproducing a property. After estimating the cost of building the structures on a property, and deducting an amount for depreciation, the appraiser adds the estimated value of the land and arrives at an indication of value. This method is particularly useful for estimating insurable value.
- Income Capitalization Approach
The income capitalization approach is based on a property's potential rent. This method is obviously most useful for valuing income-producing properties, but it can be applied whenever rental figures from similar properties indicate what the potential rental income and other investment purposes.
The appraiser inspects your property, collects specific data about it as well as comparable properties in the same market, and analyzes general information about your neighborhood and community. Using one or more of the three methods of estimating value, the appraiser arrives at a final conclusion.
The appraiser's final estimate of value and supporting data will be presented in an appraisal report. Many single-family residential appraisals are reported on a standard form used by most lending institutions; some appraisals require detailed narrative reports supplemented with statistical data and photographs. Regardless of the report's format, the appraiser must be able to support the conclusions and explain the process clearly.