Real Estate Sellers Resources
Congratulations on making the choice to sell your home or other real estate property. If you are a first-time seller, you must be wondering, now what? On the road ahead there are many questions that will need to be asked related to selling your property. The following is information we believe will help you with the selling process.
Do You Gain Anything by Selling Your Current Property?
Be honest with yourself on this one and ask yourself what you gain by selling. Is there a bigger and better home in the future for you or does the new home fit your needs better? Even downsizing can be a great reason. If you’re current home is bigger than you need and you would like a smaller home to lower bills and taxes that is a great reason. Sometimes the reason will be money from the sale to finance something important in your life.
Coordinating Buying and Selling
You will usually have to coordinate the sale of your current home or other real estate property with the purchase of your new home or other real estate property. The timing for this can be tricky. Feel free to ask us for help with it. We can give you advice and help you with the timing and coordination. You will need to think about which avenue you should take first - buying your home or selling your home. If you need the income from the sale of your current property to help finance the purchase of your new property, then obviously, you will need to sell your property first. However if you do not need the income from the sale of your current property to finance your new real estate purchase, then you may be able to avoid some unnecessary headaches or delays by purchasing your new property before your current property sells.
Buying first is a great choice for several reasons. If you're purchasing a home, it will provide you a home to always go home to during the process. But on the other hand this can be a risky move because you could potentially end up with two mortgage payments. You can always make the buying of the new home contingent on the sale of your old home, but sellers generally do not like this because they have no idea how long it will take or what your old home looks like. If a seller receives another offer, you will want to be sure you have the right to remove the contingency and buy the home or withdraw your offer.
Selling first is a great strategy. It puts you in a great position to buy a new home or other real estate property, but there is a risk here that you might end up without a home at all, at least temporarily until you find another one. Selling your current property first also ensures that you don’t have two mortgage payments.
Buy and Sell at the Same Time
This is what most people will strive for. It is the best choice of the three because you will sell your home or other real estate property and get your new one almost at the same time, sometimes within days, which may work perfectly for you.
Cost of Selling
We want to let you know what the costs of selling your home or other real estate property are so that there are no surprises down the road. Here are some of the costs you can face when making a real estate purchase:
- Repairs – Most likely you will have to make some repairs on your home prior to trying to sell it. If you do not wish to do the repairs or hire someone to do them, just remember that you should price your house accordingly. Some improvements can help increase your sale price or even decrease the taxes you pay on the profit you make.
- Closing Costs – As the seller you are usually going to be responsible for some of the closing costs. The amount is negotiated before the sale is completed.
- Professional Inspection - Buyers will usually have their own inspection done, but it's useful for you to have one done before you put your house on the market. It can help you find out about any defects, so you know what exactly what you're selling, or give you time to fix what's wrong.
- Moving Expenses – When you move there are all kinds of unexpected expenses. If you hire a moving crew or do it yourself there are still some expenses. Be sure you are ready for these and have them budgeted in your plans.
- New Home Purchase – When you sell your home think of the possible additional cost involved in buying your new home.
- Legal Fees - You may want to have a lawyer look over the sales contract and help you with the closing.
- Home comparisons or a professional appraisal can help you estimate your home's value and set a reasonable price.
- Sometimes the seller will be asked to provide a home warranty.
How Much is My Property Worth?
We know that pricing a home or other real estate property is the single hardest part of selling it. You always hope that your property appreciated in value and usually that is the case. Using an agent is the most tried and trusted way of establishing a sales price. Real Estate Agents know what other property in the area have sold for and can give you a great idea of how much your property is worth. One way to get an idea of what your property is worth before you put it on the market is to attend the open house of property that is similar to yours. If you're looking to sell your home, make sure you look for a home that has the same number of bedrooms, bathrooms, stories, etc., and is in a similar neighborhood to yours.
Marketing Your Home
We will deal with this part for you. The marketing of your property is covered by your Real Estate Agent. We can gladly say that this is one thing during the process that you won't have to worry about. We'll put out the “For Sale” signs and will provide other kinds of marketing that range from internet listings to print material.
The closing is where it all comes together. All the documentation will be signed by both the buyer and the seller. During this process the buyer has to do much more than the seller.
What Does the Seller Have to Do for Closing?
- A Title Search – It is usually your responsibility as the seller to have a title search conducted on the property. The seller usually pays for this search. The reason for this search is to uncover any liens or claims on the property. A clear title is what the buyer expects and needs.
- Hiring an Escrow Agent – The escrow agent is a third party whose job is to ensure that everything that needs to happen will happen before closing. Their job will involve collecting and distributing the money to the appropriate parties and making sure everyone gets paid. They will handle the title of the property and make sure it gets to you. An escrow agent will provide both the buyer and seller a list of everything they need before the deal can be closed.
What Can Go Wrong at Closing?
As much as we would love to tell you “nothing can go wrong”, that just isn’t the case. There are many reasons that a closing may not happen on the assigned day. We feel that it is important for you to understand these reasons in the event that you run into one of them.
- Money Problems – Sometimes the estimate of the buyers closing cost will be inaccurate and the cashier’s check they bring will be short. If the buyer is dealing with a reliable lender this should not ever happen.
- Loan Problems – If the loan package for the buyer is not there or pages are missing you will have to wait for them before the deal can be closed. Sometimes there are errors of what the interest rate agreed is; and then the buyer has to return to the lender and have that corrected. We recommend that you ask for progress reports on the status of the buyer’s loan application to make sure there are no surprises dropped on you.
- Final walk through problems – Always insist on a final walk through right before the papers are signed. This assures the buyer that all the items that should be there are there, and that there is no damage to the property. If there is a problem at this point you and your agent may need to renegotiate with the buyer in order to close.
- Title Problems – There could always be a last-minute title problem. There may be a lien on the property, or another person has a claim on the property or taxes have not been paid. These issues will have to be resolved before the deal can close.
- Appraisal Problems – If the appraisal is much lower than the price sometimes the lender will not approve the loan. Usually a lender will approve a loan for a percentage of the property value. If this happens one of two things will need to happen either the seller will need to lower the price, or the buyer will need to come up with more money.
We hope that this information has proved useful to you as you prepare to sell your property. Please contact us if you have any questions or would like more information. We are here to help you make the sale of your property a success.