The Selling Process

Set Your List Price

• If you set the price too high, your house won’t be picked for viewing, even though it may be much nicer than others on the street. You may have told Bill to "Bring me any offer. Frankly, I’d take less." But in that list of houses, yours simply looks too expensive to be considered.
• If you price too low, you'll short-change yourself. Your house will sell promptly, yes, but before it has time to find the buyer who would have paid more.

TIP: Never say "asking" price, which implies you don't expect to get it.

To determine the proper list price, Bill will provide you with the following professional services:

• Furnish comparable sales.
• Analyze market conditions.
• Help to determine offering incentives.
• Estimate your net proceeds.

No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market. Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood like yours.

Bill can furnish data on sale figures for those "comps", and analyze them for a suggested listing price. The decision about how much to ask, though, is always yours.

The list of comparable sales Bill brings to you, along with data about other houses in your neighborhood presently on the market, is used for a "Comparative Market Analysis (CMA)." To help in estimating a possible sale price for your house, the analysis will also include data on nearby houses that failed to sell in the past few months, along with their list prices.

This CMA differs from a formal appraisal in several ways. One major difference is that an appraisal will be based only on past sales. In addition, an appraisal is done for a fee while the CMA is provided by Bill and may include properties currently listed for sale and those currently pending sale.

In the normal home sale, a CMA is probably enough to let you set a proper price. A formal written appraisal (which may cost a few hundred dollars) can be useful if you have unique property, if there hasn't been much activity in your area recently, if co-owners disagree about price, and any other circumstance that makes it difficult to put a value on your home.

TIP: If you do order a market value appraisal, make it clear you don't need an elaborate, or full narrative report--the kind that's complete with photos of the house and neighborhood, a map specifying the site, and floor plans is sufficient.

A Comparative Market Analysis (CMA) often includes Days on the Market (DOM) for each comparable house sold. When real estate is booming and prices are rising, houses may sell in a few days. Conversely, when the market slows down, average DOM can run into many months.

Bill can tell you whether your area is currently a buyer's market or a seller's market. In a seller's market, you can price a bit beyond what you really expect, just to see what the reaction will be. In a buyer's market, if you really need to sell promptly, offer an attractive bargain price.

Some sellers list at the rock-bottom price they'd really take, because they hate bargaining. Others add on thousands to the estimated market value "just to see what happens."

If you want to try that, and if you have the luxury of enough time to feel out the market, sit down with Bill and work out a schedule in advance. If there haven't been many prospects viewing your home after three weeks, you may need to lower your list price.

If that doesn't bring any prospective buyers, you may need to lower your list price again. Plan on doing that regularly until you find a level that attracts buyers. Make a written schedule in advance, before emotion takes over and you're tempted to dig your heels in.

Sometimes cash incentives are as effective as lowering the price, especially in the lower price range where buyers may be "cash poor." You may offer to pay such items as:

• Some or all of a buyer's closing costs; and
• Discount points required by the buyer's lending institution; or

If you haven't had much traffic through your house and you’re in a hurry to sell, you may want to add the offer of a bonus to the selling broker, in addition to their commission. An example of the wording for such an offer may be "to the broker who brings a successful offer before Christmas."

Once you’ve been given an estimate of market value by Bill, you can get a rough idea of how much cash you might walk away with when the sale is completed. This can be particularly useful as you start looking for another home to buy.

From the estimated sales price, subtract:

• Payoff figure on your present loan(s);
• Broker's commission;
• Any prepayment penalty on your mortgage;
• Attorney's fees, if any; and
• Unpaid property taxes.

In addition, Bill can tell you whether local customs or rules expects the buyer or seller to pay for the following items:

• Title insurance premium;
• Transfer taxes;
• Survey fees;
• Inspections and repairs for termites and the like;
• Recording fees;
• Homeowner Association transfer fees and document preparation;
• Home protection plan; and
• Natural hazard disclosure report.

As far as closing costs are concerned, you and your eventual buyer may agree on any arrangement that suits you, no matter what local practice dictates. Bill will assist you in estimating what your final closing costs will be. It is difficult to predict what the exact closing costs will be when you negotiate with a particular buyer.

Now it's time to get your house ready to sell…

In readying your house for sale, consider:

How Much Should You Spend?

In preparing your home for the market, spend as little money as possible. Buyers will be impressed by a brand new roof, but they aren't likely to give you enough extra money to pay for it. There is a big difference between making minor and inexpensive "polishes" and "touch-ups" to your house, such as putting new knobs on cabinets and a fresh coat of neutral paint in the living room, and doing extensive and costly renovations, like installing a new kitchen.

Bill, who is familiar with buyers' expectations in your neighborhood, can advise you specifically on what improvements need to be made. Don't hesitate to ask for advice.

Before putting your house on the market, take as much time as necessary (and as little money as possible) to maximize its exterior and interior appeal.

Enhance your home’s exterior and curb appeal by:

• Keeping the lawn edged, cut and watered regularly;
• Trimming hedges, weeding lawns and flowerbeds, and pruning trees regularly;
• Checking the foundation, steps, walkways, walls and patios for cracks and crumbling;
• Inspecting doors and windows for peeling paint;
• Cleaning and aligning gutters;
• Inspecting and cleaning the chimney;
• Repairing and replacing loose or damaged roof shingles;
• Repairing and repainting loose siding and caulking;
• During spring and summer months considering adding a few showy annuals, perhaps in pots, near your front entrance;
• Re-sealing an asphalt driveway;
• Keeping your garage door closed;
• Storing RVs or old and beaten up teens' jalopies elsewhere while the house is on the market; and
• Applying a fresh coat of paint to the front door.

Enhance your home’s interior by:

• Giving every room in the house a thorough cleaning, as well as removing all clutter. This alone will make your house appear bigger and brighter. Some homeowners with crowded rooms have actually rented storage garages and moved half their furniture out, creating a sleeker, more spacious look.
• Hiring a professional cleaning service, once every few weeks while the house is on the market. This may be a good investment for owners who are busy elsewhere.
• Removing the less frequently used, even daily used items from kitchen counters, closets, and attics, making these areas much more inviting. Since you're anticipating a move anyhow, holding a garage sale at this point is a great idea.
• If necessary, repainting dingy, soiled or strongly colored walls with a neutral shade of paint, such as off-white or beige. The same neutral scheme can be applied to carpets and linoleum.
• Checking for cracks, leaks and signs of dampness in the attic and basement.
• Repairing cracks, holes or damage to plaster, wallboard, wallpaper, paint, and tiles.
• Replacing broken or cracked windowpanes, moldings, and other woodwork.
• Inspecting and repairing the plumbing, heating , cooling, and alarm systems.
• Repairing dripping faucets and showerheads.
• Buying showy new towels for the bathroom, to be brought out only when prospective buyers are on the way.
• Sprucing up a kitchen in need of more major remodeling by investing in new cabinet knobs, new curtains, or a coat of neutral paint.

Learn about different approaches for marketing your home…

The largest expense for advertising your home has traditionally been classified advertising in the local newspaper. However, today properties are also exposed through popular Internet home search/listing services, radio and television promotions, and real estate guides.

Even with all these additional advertising avenues, "For Sale" signs on the front lawn are still remarkably effective. Bill uses brochure boxes along with these signs to market the property.

When appropriate, and with your permission, Bill may send a mailing about your property to neighbors. Sometimes one of them has "a friend or relative who always wanted to live near me." You never know.

To prepare your home for viewing, make it as light, cheerful and serene as possible.

• Open heavy drapes;
• Put on lights in closets, basement, and attic; and
• Light your dining room chandelier and living-room lamps.

TIP: When preparing your home, think about the techniques that are used to show builders' model homes.

Bill suggests that you not be present while the house is being shown to prospective buyers. This is done because your presence will inhibit their actions and conversations. They won’t feel free to open closets and cabinets, test out the plumbing, and discuss their observations objectively as they walk through.

It goes without saying that your children and pets should not be on the premises either.

If Bill has scheduled an open house, you may want to notify the neighbors, and assure them that they'll be welcome. They'll jump at the chance to poke around in your house, and sometimes they can turn up a buyer among their friends.

In preparing for an open house, you should:

• Pull the drapes back;
• Light lamps;
• Simmer a few drops of vanilla on the stove;
• Light your fireplace;
• Set the dining room or kitchen table if you have particularly nice linen or china;
• Put fresh towels in the bathroom; and then
• Leave the house so Bill is free to deal with prospective buyers in a professional manner.

Professional appraisers sum up their entire body of knowledge in three words - "Buyers Make Value." Your home is worth as much as some member of the buying public will come forth and pay for it.

After it's been on the market for months, you've been given a clear message that the property may not be worth what you're asking for it. This is particularly true if there haven't been many prospects coming to see it.

What you do at that point depends on whether you really need to sell, and whether you're working with a time limit. If you're not really motivated to move soon, you can always wait - years if necessary - and hope inflation will catch up with the price you want.

The problem is that in that time, your home begins to feel shopworn. Buyers become suspicious of a house that's been for sale for a long time.

If, however, you really do need to sell, discuss with Bill a schedule for dropping your price gradually until you find a level that attracts buyers. There's no point in saying, "We simply can't sell our house." Anything will sell if the price is right.

Don’t spend a great deal of time worrying about what will happen when you're selling one home and buying another. You're not alone. Bill, as well as lawyers, mortgage and title and escrow companies have had plenty of experience in arranging contracts and loans so that the two transactions dovetail smoothly.

It's best to list your present home for sale first. Selling and buying a home is a very emotional event and if you create a "race" by locating your replacement property before you sell your current home, you may lose it to another buyer, who does not need to sell in order to buy.

If you do find just the house you want, you can always put in a purchase offer contingent (dependent) on selling your present one. (However, in a hot market you will have difficulty getting the house you want this way.) Sometimes the seller will sign a contract agreeing to wait a certain period of time while you find a buyer for your house - sometimes not. What would you do if you were presented with such a proposal, from a buyer who also has a house to sell?

If you do find that you need to buy the next house before you've received the proceeds from the present one, lending institutions can sometimes make you a short-term "bridge" loan to tide you over between the two transactions. Make sure you fully understand the exposure and emotional investment before proceeding with this type of loan.