Frequently Asked Questions Before Listing Your Home
- When is the best time to sell my home?
This frequently asked question cannot be answered with a simple or general answer. Every real estate market is different, therefore, the best time to sell a home will be different from real estate community to real estate community. In most cases, the spring months are the best time to be selling a home. The spring months will vary from community to community. For example, the spring market in the Medford, New Jersey real estate community maybe April, May, & June while the spring market in Coral Springs, Florida maybe March & April.
Since every home seller’s situation is different, you should discuss the timing of your home sale with your Realtor. In some cases, selling a home during the fall and winter months maybe better than waiting until the spring real estate market. This is due to a combination of many factors including lower competition and that serious buyers are always looking for a home, just to mention a couple factors.
- How is the real estate market right now?
A frequently asked question from home sellers before listing their home for sale is related to the local real estate market. There are many market indicators that a top producing Realtor should be able to share with you to help explain the condition of the local real estate market. One of the most important indicators on market conditions is average days on the market. The average days on market (also known as DOM) can indicate to a seller how quickly homes are selling when listed for sale. Other examples of market condition indicators that a top producing Realtor will provide a home seller before listing their home include market absorption rates, number of closed transactions year-over-year for a given month, average sale prices, and average list price to sale price ratios.
- What steps should I take to prepare my home for sale?
There are several things you need to know before listing your home for sale! A frequently asked question from home sellers before listing is what steps should be taken before listing their home. Not properly preparing a home for sale can put a homeowner at a huge disadvantage.
The expression “You never get a second chance to make a first impression” is true when it comes to selling a home. When selling a home, you must be sure that your home presents itself in the best possible light. Making sure clutter is at a minimum, freshly painting rooms, installing new carpeting, or ensuring odors are non-existent are just a handful of things that should be done before listing your home for sale.
- What should I disclose to potential buyers?
When selling a home, it’s important you disclose to potential buyers anything you are aware of in your home. Nobody likes “getting the raw end of a deal” when it comes to buying a home, car, or anything for that matter. If you’re aware of defects with a roof, appliance, or home in general, you’re always going to be better off being honest and upfront. If you’re aware of defects, whenever possible, fixing them before going on the market is best. This can avoid potential issues and/or lawsuits once your home is under contract, after inspections, and even years after you have sold your home.
Frequently Asked Questions Relating To Home Value & Pricing
- How much is my home worth?
Most homeowners want to know how much their home is worth. This frequently asked question is another one that cannot be answered with a generalized answer. One of the best perks to owning a home is the ability to make it your own and improve it how you’d like. Finding out how much your home is worth is not something that should be done without asking a top local Realtor.
- Why is the assessed value different than what you say my home is worth?
Assessed value is not the same as market value or appraised value. There are many homes that could be sold for significantly more than an assessed value and others that maybe sold for significantly less. The assessed value of a home is used for the purpose of taxes in your local municipality. The assessed value of a home is multiplied by the local tax rate to determine what your yearly taxes are. The assessed value has no impact on how much your home is worth to a potential buyer in the marketplace.
Unfortunately, there are many home buyers who believe that a home that is listed higher than the assessed value is overpriced. This is the furthest from the truth. Home buyer’s also question if something is wrong with a home if the list price is much less than the assessed value. The bottom line is the assessed value has no impact on how much your home is worth. There are homeowners who don’t pay attention to their assessed value, just to find out their municipality has been slowly raising it, year after year, even though the market value hasn’t been increasing.
- What is the difference between a list price and sale price?
This frequently asked question can be answered very easily. The list price is the price a home is currently listed for sale at. The sale price is the price a home is sold at. A top Realtor should be able to suggest a list price that ends up being very close to the final sale price.
- How do you determine how much my home is worth?
There are a handful of methods that Realtors use to determine the value of a home. The most common method to determining the value of a home is by completing a comparative market analysis. A comparative market analysis is an in-depth evaluation of recently sold “comparable” homes in the past 6-12 months. A comparative market analysis, also known as a “CMA,” isn’t a crystal ball that determines what a home will sell for, however, if performed by a top Realtor, it should greatly narrow the sale price range.
A professionally completed “CMA” will consider many features of not only a home, but also the local area and neighborhood. Considerations that a professionally completed “CMA” include, but is not limited to:
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- Square footage
- Number of bedrooms
- Number of bathrooms
- Upgrades to kitchen
- Window quality
- Roof age
- Lot features
- Location; primary or neighborhood street?
- Style of residence
- Flooring type
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- Can I determine how much my home is worth from an internet website?
The answer to this frequently asked question is NO! Anyone who has bought a home, sold a home, or just looked at homes, has heard of websites such as Zillow and Trulia. These are also commonly referred to as third party real estate websites. Third party real estate websites are not local to every real estate market.
These third-party real estate websites provide estimates of home values for practically any home in the United States. How is it possible that a third-party website that is headquartered in California or Florida can provide an accurate home value for a home located in Medford, NJ? It’s not! These third-party websites, such as Zillow and Trulia, use computer generated home values based on calculations, formulas and algorithms.
These websites providing inaccurate estimates (or “Zestimates”) can create a false sense of hope and lead to frustration. A home seller who is told their home is worth $20,000 less than the online estimate is going to be understandably upset. It’s critical that when selling a home, the value is determined by a top Realtor in your local area, not an internet website!
- Should I price my home higher to leave room for negotiations?
This frequently asked question often leads to a common pricing mistake that sellers make. Many sellers believe they should price their home $5,000 higher than what a top Realtor suggests leaving room for negotiations and low-ball offers. A well-priced home will sell quickly and will sell for close to the listing price. There is no need to leave room for negotiations, as today’s home buyers are very well educated. A seller who prices their home high to leave room for negotiations can actually be costing themselves more money than if they price it to reflect the suggested market value.
Frequently Asked Questions Relating To Exclusive Right To Sell Contracts
- How long does the listing agreement last?
Most of the frequently asked questions that relate to exclusive right to sell contracts are not able to be answered with a universal answer. When it comes to the length of a listing agreement, every real estate agent will have a different preferred length. One thing to keep in mind when asking about the length of a listing agreement is the average days on the market. If the average days on the market in your local real estate market are 75, a 90-day listing agreement may not be enough.
- How much commission do you charge?
Commission is negotiable, period. Don’t let any Realtor tell you otherwise. However, the saying “you get what you pay for,” often is true when it comes to real estate. If a Realtor offers a lower commission, do you think they will negotiate aggressively on your behalf when it comes to the price? Also, if you were working for a reduced hourly wage from your “normal,” would you work as hard as you normally would? The answer is likely not. Choosing a Realtor based solely on the fact they offer the lowest commission amount is a top mistake made by home sellers when choosing a Realtor to sell their home.
- What happens if I’m not happy and want to cancel the contract?
This frequently asked question is not one home sellers like to ask when selling their home, however, it can come up frequently. The hope when selling a home is a quick sale and top dollar. This isn’t always the case though. Every state and contract have different terms but, if you decide to cancel the listing agreement, you could possibly be responsible for any expenses incurred by the real estate agent and their brokerage.
- Do I need to provide permits or anything for my deck, shed, fencing, or additions?
Every municipality is different, but in general, when making an improvement or change to a piece of property or land, a certificate of compliance (and/or permit) is required. When selling a home, potential buyer’s have the right to ask for certificates of compliance for any improvements, such as decks, patios, or sheds. Some buyers may not ask for any permits, and some may. Technically, you do not need to provide any permits or certificates of compliance, however, you could lose a potential buyer over a simple fence permit.
Frequently Asked Questions Relating To Purchase & Sale Contracts (Offers)
- How do I respond to low ball offers?
When selling a home, it’s best to think of any decision as a business decision rather than an emotional one. Low ball offers still happen, unfortunately. Dealing with low ball offers can sometimes lead to the sale of a home, if handled properly. The worse decision you can make if you receive a low-ball offer is not responding. Some homeowners are so upset they decide they do not want to respond to a low-ball offer, which ultimately ends any potential chance for a deal. A counteroffer, even if it’s close to the list price, is better than letting a potential buyer walk!
- What are seller concessions?
Depending on what type of financing the potential purchaser is obtaining, the option to receive seller concessions may or may not exist. There are many home buyers in the marketplace with impeccable credit scores and solid jobs but are short on the money required to purchase a home. Seller concessions allow a homeowner to contribute a percentage or dollar amount towards a buyer’s closing costs and/or pre-paid items. For example, a buyer who qualifies for an FHA mortgage can receive up to 6% of the purchase price towards their closing costs. This can be a significant amount of money and can be the difference of a buyer being able to afford a home or not or the seller being able to sell their home!
- What are some common bank required repairs?
If a home buyer is obtaining financing from bank, the bank will complete an appraisal. When performing an appraisal, the appraiser is looking for potential safety hazards or concerns. The buyer will determine in their purchase offer a dollar amount in which a seller is responsible to cover for bank required repairs. Some common bank required repairs include missing handrails, broken windows, peeling paint, missing electrical covers, and roofs that are in very poor condition.
- What happens if the appraised value comes in too low?
In addition to ensuring there are no safety hazards at a home, the bank appraiser is also making sure that the home value is at least what a buyer and seller agree too. This isn’t always possible though. If an appraiser determines the value of the subject property is lower than the agreed purchase amount, there are a couple different scenarios.
Seller Makes Concession – This is the most common result when an appraisal comes in too low. The seller must agree to sell the home for what the appraiser determines as the acceptable value.
Buyer Comes Up With Difference – The buyer must bridge the difference between the purchase price and the appraised value. This scenario is fairly uncommon as many buyers find it hard to pay more for a home than their bank appraisal indicates it’s worth.
The Transaction is Cancelled – Unfortunately for both the seller and buyer, this is a common result from a property under appraising. If the buyer does not want to bridge the difference and the seller does not want to make the concession and adjust the sale price, the transaction is cancelled.
Challenge Appraisal – Challenging an appraisal is not an easy task. It is something that must be done with much care and consideration, otherwise the chances of an appraised value being changed, is slim.
- What is a sale contingency?
Some buyers decide when buying a home, they would like to find a suitable property before selling their existing home. A sale contingency is a common contingency that sellers see in purchase offers. A sale contingency means that the potential buyer of a home must sell their existing home, before being able to purchase the “new” home.
- How does the inspection phase work?
Inspections are another common contingency that buyer’s make their purchase offers subject to. There are many different types of inspections and tests that a buyer has the right to perform. In most cases, inspections are at the expense of the buyer. They have a specified number of days to complete the inspections and a specified number of days to either remove the inspection contingencies or request the seller address findings from the inspections.
Other Miscellaneous Frequently Asked Questions From Home Sellers
- What are the common closing expenses for home sellers?
Another popular frequently asked question from home sellers is how much it will cost to sell a home. There are expenses that the buyer will have that the seller will not and vice versa. Typical closing expenses for home sellers include the abstract and title search, instrument survey, real estate commissions, and transfer taxes which also are known as revenue stamps.
- Should I include appliances or leave them as negotiable?
In many cases, the appliances in one home will not fit or look right in another. The decision whether to include appliances or make them negotiable is ultimately up to the seller. One thing to remember when deciding whether to include your appliances, they do not add much value to a home since appliances are considered personal property.
- How do you plan on marketing my home?
A comprehensive marketing plan is something that you should expect from your Realtor when selling a home. The days of placing a sign in front of a property and waiting for someone to sell it are over. With the evolution and impact the internet has had on the real estate industry, it’s critical that not only is your home marketed through “traditional” avenues, such as newspapers and mailings, but it must also get maximum exposure online.
A top Realtor should have a quality website, quality real estate blog, and a strong social media presence. The importance of where a Realtor’s website ranks in search results is critical since over 90% of buyer’s are beginning their home search online!
- Why isn’t anyone looking at my home?
This frequently asked question can have a complex answer. In most cases however, the reason your home is not being looked at by potential buyer’s is due to the price. Buyers who feel a home is priced to high will choose to look at other homes before yours, likely finding one before they reach yours. Other possible reasons your home is not being looked at could include a poor curb appeal, a poor location, or lackluster marketing efforts from your Realtor.
- Can you recommend service providers who may be needed throughout the transaction?
No matter what industry, top professionals enjoy working with top professionals. This is no different in real estate. A top Realtor should be able to provide high quality mortgage professionals, attorneys, contractors, movers, or other services needed throughout the home selling process.
- How frequently and by which methods do you communicate with your home sellers?
Like many of the answers to these frequently asked questions, the frequency and methods of communication will vary from agent to agent. At a bare minimum, you should expect to hear from your Realtor at least once a week when selling your home. The methods in which a Realtor communicates with their sellers should be tailored to each individual seller. If a homeowner prefers communication via e-mail, the Realtor should communicate via e-mail. The same can be said about text messaging, phone conversations, or face-to-face interaction.
- What should I do to prepare my home for showings?
Preparing a home for showings can be a job in and of itself. A home that is well prepared for home showings will likely sell faster than its competition. Making sure a home is cleaned, de-cluttered, bright, and that no foul odors are present are just a few things that sellers must do to prepare their home for showings.
- Should I be present during showings at my home?
Easy question to answer – no! There are many reasons why sellers should not be present during showings. The primary reason why you should not be present at showings of your home is potential buyers can feel uncomfortable to talk open and freely with their Realtor about your home. They do not want to say something that could offend you, the seller. The best idea is to leave shortly before the scheduled showing and come back once you are certain the buyer and their Realtor have left your home.
- Will you be holding open houses?
Believe it or not, open houses are a controversial topic in the real estate industry. Some Realtors will convince a seller that they will get their home sold because they hold it open every weekend. Unfortunately, these same Realtors are not being honest with the seller. The truth is open houses are not necessary to sell a home.
The primary reason a Realtor will convince a seller that open houses are necessary is because they are hoping to pick up additional buyers. The percentage of homes that sell due to an open house is less than 5%. Ask the Realtor what their thoughts on open houses are and make sure you’re comfortable with their response. It’s important you’re on the same page as the Realtor when it comes to open houses.
