Selling your home or investment property can seem overwhelming at times. There is a world of paperwork, forms, time lines and deadlines. Working with a knowledgeable Realtor who stays current with the real estate market, and who knows about the latest paperwork that needed is important to you. We are providing this section with some of the Real Estate questions that we get from Seller from time to time. Certainly there is not enough space to cover all the questions a seller might have — as there are so many variations of issues in the market.
- Price your home correctly from the start
- How do I make my home more appealing to buyers?
- Is a pre-approved buyer better than a pre-qualified one?
- Should I list my property with the real estate agent who tells me the highest listing price?
- What is a contingency in a sale contract?
- What is a seller obligated to disclose to potential buyers?
- Why shouldn’t I put my home on the market as a For Sale By Owner?
Price your home correctly right from the start.
Overpriced homes take longer to sell and often end up selling for less than market value.
Many Sellers believe the myth that they can “always reduce the price later on.” However this strategy really does not work well because a home listing gets the most attention from Buyers when it first comes on the market. Buyers and their agents pay attention to “hot sheets” of newly listed properties on the Multiple Listing Service (MLS). As the saying goes, you only have one time to make a good first impression. Price reductions can also give the impression that “there must be something wrong with that property” and can turn Buyers off even more. That’s why it is essential to obtain a Comparative Market Analysis (CMA) and listen to your real estate agent’s advice on how to price your home right from the start.
Overpricing your home will actually cost you more money than listing it at the correct market value right from the start. While you wait for a miracle Buyer to offer more than your home is worth, you continue making mortgage payments and deal with the expenses and hassles of trying to keep a home spotless during showings. Meanwhile the actual market is changing and may be going downward.
How can I make my home more appealing to buyers?
Due to the amount of homes for sale Buyers can afford to be particular. Buyers want homes in great condition.
For great tips on getting your home ready for sale, read: Why Didn’t My Home Sell? or browse our Home Staging Articles.
Is a pre-approved buyer better than a pre-qualified one?
A pre-qualified buyer has a letter from a mortgage lender stating the approximate loan amount that the buyer should be able to afford. This estimate is based on basic income and expense data is no guarantee that they will actually be able to obtain financing in this amount.
When a buyer is pre-approved they have already submitted a loan application and most of the necessary paperwork to obtain a mortgage. Their loan is essentially approved, subject to them locating a property that appraises for the loan amount. Unless they lose their job or incur a dramatic change in finances, they should be able to complete the sale.
Therefore, a pre-approved buyer is a much stronger buyer than a buyer who is only pre-qualified.
Should I list my property with the real estate agent who tells me the highest listing price?
No, absolutely now! Request a comparative market analysis of your property – that is the price you need to believe will actually be what you may be able to sell your home for. Your listing price should be based on hard data not an agent telling you what you want to hear.
You must carefully review sales of comparable properties with a real estate agent who is familiar with market conditions in your area to determine a realistic listing price.
An agent who tells you a much higher price than what a comparative market analysis shows is likely only telling you what you want to hear in order to get the listing for your home — and when it does not sell at a unrealistic price, they will be back again asking you to reduce the listing price in order to get it sold.
What is a contingency in a sales contract?
Sales contracts often contain contingency clauses, which are provisions that allow a contract to be cancelled in certain situations.
Typical contingencies may include:
- Mortgage contingency – Allows for contract cancellation if the buyer is unable to obtain financing within a specified time-frame.
- Inspection contingency – Buyer may cancel contract if unsatisfactory results are found during a general home inspection or termite inspection.
- Contact is subject to Buyer selling their current home.
What is a seller obligated to disclose to potential buyers?
The seller and their real estate agent must disclose all facts materially affecting the value or desirability of the property. During the sale of residential properties, the seller must provide the buyer with a Real Estate Seller’s Property Disclosure Statement (SPDS), on which the seller should be stating in writing the existence and condition of all known physical attributes of their property.
(Note that in this current market where there are many bank-owned properties, or homes that were bank owned and have now been purchased by investors for resell, the seller is often not able to provide any information about the property as they have never lived in it, nor owned it other than “on paper” .)
Why shouldn’t I just put my home on the market as a For Sale By Owner?
Some home sellers try the FSBO (for sale by owner) approach in an attempt to save the cost and commission of hiring an agent.
The biggest disadvantages to this approach are:
- Limited access to market data, making it more likely that you will over-price or under-price your home.
- Lack of access to the resources experienced real estate agents have such as a market knowledge, customer base, marketing materials, and financial and legal expertise in the selling process.
- Many buyers simply do not want to buy a home from an individual who is not being represented by a professional. Buyers are concerned that they do not know all they need to know about real estate facts and they have doubts that the seller does either. Since a home is the largest purchase most people make in their lifetimes, the buyer does not want to make what might be costly mistakes because they did not have representation.
- A seller who is trying to sell a home by themselves is simply not able to tap into all the Internet and social media tools that can help get a home sold. Since 90+% of all buyers find homes on the Internet before they ever go and see them in person, to not be taking advantage of all the Internet and social media opportunities to get a home sold means many people who might see the home virtually will not have that opportunity.