Selling Process
So, you are looking to sell your home. This section will guide you from the beginning to the end of how this process works. So while it might be lengthy, it does have the majority of the information necessary to help you understand the process.
First Step
The first step is to get an idea of value. What can your home potentially sell for? The best way to accomplish this is to have a Realtor visit your home, walk the home, and then run some comparables. Ultimately, the Realtor will get back to you with a range of value. This range will be based on what is currently on the market, what is currently under contract, and what has sold in the last 6 months (new appraisal guidelines do not allow them to consider any homes sold more than 6 months ago).
Not ready to sell your home, but would like to track the values in your neighborhood, sign up to "Search the IDX MLS for Free". Once you sign up, set up a "Map Search" for your neighborhood and create an E-mail alert. Once set, this will track any new homes listed, put under contract, or sold. This is an easy way to keep a tab on the values of the neighborhood. Any questions on this, please shoot me an e-mail, or give me a call at 303.520.8700.
Second Step
Now that you have a range, the next step is to figure out what you would like to do. What I mean by this is do you want to sell the house "as-is", or do you have the time/money to make some improvements? Is there a part of your home that could use some attention (holes in drywall, broken doors, old carpet, stale paint, etc....)? If you want to get toward the higher end of the price range, your home should shine when it shows, otherwise, you just can't expect to get top dollar. It's wise to walk the home again with a Realtor and get an idea of where you can make some changes to get the home in tip-top showing shape. This could be just a small paint job, or it could be the realization that you should just market the home toward the lower part of the price range so you don't have to spend the time/money on a multitude of projects. A final part of this step occurs during the walk through of the home - what else can you do to make your home shine during showings? Staging! On the walk with the Realtor, ask for advice as to whether removing or adding furniture or the configuration of certain rooms could help the flow of the home. Bottom line here is that a minimalist approach works great, but all homes are different. What works for one home may not work for another. Another good reason to have a professional walk your home.
Third Step
Assuming at this point that you have either made the necessary repairs / improvements, or just decided to sell the home "as-is". It is now time to put a price on the home and get it on the market. Listing contracts will be signed at this point, or earlier. Also, pictures will be taken and all the fun stuff necessary to get the home on the market. The sign will be put in the yard, a lock box on the door, and the listing will hit the MLS. Your listing is now live on the market and the next step is showings.
Fourth Step
Your house in now on the market - the next step is for people to come to view the home in hopes that an offer will be coming your way shortly. Depending on your situations (this can vary), when a showing is set, the Listing office will give you a call and let you know that someone would like to show your home at a certain period of time (1-3, 2-4, 4-5, etc...) - periods of time are usually set in 2 hour windows due to the fact that the showing Realtor is probably showing a number of properties that day and it can be tough to tell exactly when they will be getting to your home. My advice here is not to be at the home. In all my experience, when people are home during showings, it makes the potential buyers feel awkward and it will ultimately hurt your potential of getting an offer. If you have to be home, simply go on a walk, or hang out in the back yard or garage while the showing is happening. The bottom line is that you want to make potential buyers as comfortable as possible as this may ultimately be their home. Other things that can help with the showing process is turning on some soft music, lighting candles, and even baking something that will leave the home smelling great.
Fifth Step
Adjustments - are we getting offers? Are we getting traffic? What is the general feel of the real estate market at present? There are always buyers in any type of market and it really boils down to whether or not we are doing what is necessary to elicit offers. Most often times, this comes down to the price of the home. On all showings, I strive to get feedback from the showing agent to get an assessment of how we compete with other similar homes on the market. If it is a simple fix like the home does not have enough light, then we can address that by opening some blinds (this should not be an issue as this would have been discussed prior to putting the home on the market, but I use it as an example). More often that not, though, it does come down to price. I liken selling your home to fishing - the buyers are a pool of fish that are circling at a certain depth in the ocean and your price is the bait. If your home is priced too high, the fish are not inclined to bite, so it is up to us to figure out how far to lower the bait. Once we find the appropriate level, the fish will start biting. Also, the bait does start to go stale after awhile, so it is typically in your best interest to get that bait within striking distance as soon as possible. Once we are priced right, we should get an offer shortly.
Sixth Step
We get an offer. That's what this all about anyway. This is where a Realtor's experience is invaluable. How do we play this offer? Is it what you want? Are the buyer's real (qualified)? Do the buyer's have a house to sell? Has the house been showing often? There are a multitude of possibilities that will change the way that we respond to any potential offers - too many to get into in this article, so I will break down what happens in the most general way possible. We have an offer on the table and there are three responses that we can give - 1) Accept the offer as written, 2) Counter the offer w/ a price acceptable to us and other changes if applicable, or 3) Reject the offer. As expected, all three responses have different outcomes. Accepting the offer means that we are under contract and moving on to the seventh step. Countering the offer can result in being under contract ultimately, or it can result in the buyers walking away. Rejecting the offer usually results in the buyers walking away, but sometimes they do come back with something more reasonable. The bottom line here is that there are many ways for this to go and a Realtor will be able to guide you through the process and give advice depending on the offer and the situation. I'd love to say that there is a catch-all here, but that just is not the case. To continue with this article, I will assume that we have come to terms and will now move on to the next step.
Seventh Step
We are now under contract. While it is a huge relief to be under contract, there is still a lot of work to be done. Signed contracts need to be sent to a title company so they can get started on the Title Insurance (legally necessary to sell your home) - the title company does do much more, but for the sake of space, I'll leave it at Title Insurance. Also, soon after this, you will need to provide your current mortgage information so that we can get a pay-off amount from them. While this is going on, the buyer's Realtor will set up an inspection on the home which basically puts us in another state of re-negotiation. Regardless of how great you think your home is, there are usually inspection requests that are made. Similar to when we received the offer, there are three general responses - 1) Yes, we agree, 2) Yes, we agree, but only to 'x' amount of items, or 3) No. Again, this is another negotiation period. If the buyers are not happy with our answer, they do have the ability to terminate the contract and get their earnest money back. If they do terminate the contract, we are back to square one and back on the market looking for showings. If we agree, then we just move forward with the contract. If we agree to certain items, the buyer can still back out, hence this being a period of re-negotiations. In my experience, the seller's ultimately do agree to do a few items and the buyer's agree to withdraw other items. Sometimes, instead of the seller doing any work, they may reduce the price of the home, or help pay closing costs for the buyer. Again, the possibilities here are many, but if there are willing sellers and buyers an agreement is usually reached.
After the inspection, the next big step is for the home to appraise. If it appraises low, the buyer can request that the price be lowered to the appraisal price, or they can walk from the contract and get their earnest money back. The Seller is not obliged to lower the price if this does happen, although, this will usually result in a termination of contract and earnest money will be returned to the Buyer. If the appraisal comes back at the purchase price, or above, everything moves forward.
The final hurdle in the selling process is for the buyer to obtain final loan approval. Unfortunately, deals do fall because the buyers did not tell their lender everything and when push comes to shove, things come to the surface. Typically, this is not the case, but it does happen sometimes. If the buyer's can not obtain final loan approval, they have to write a letter as such and then they can get out of the contract and get their earnest money back. As I said, it is unfortunate, but can happen. Having a Realtor helps you avoid these pitfalls.
I wish a contract was this easy, but the reality of it is that once you are under contract, anything can happen. The bottom line here is that you want to be dealing with a Realtor that has been around the block and utilize their expertise to keep contracts alive that otherwise would crash. At this point, we are ready for closing.
Eighth Step
Everything is complete except for the final paperwork which is typically signed at the title companies office. Once everything is signed and funding has been received, the deal is done.
Final Thoughts
Real Estate transactions happen because there are two willing parties. Because they are willing does not mean that either party will roll over and give the other party what they want. This is one of the reasons why having a Realtor on your side is so beneficial. A Realtor provides a buffer that helps keep emotions in check during the process. Also, they provide insight into the transaction that is not possible to read in a book. In my years working with both buyers and sellers, I have seen things that are inexplicable and have been able to pull dead deals out of the grave. I could have gone on for another 10+ pages about the things that can and do happen in everyday transactions. Rest assured, though, the majority of contracts do go through.
If you are looking to list your home, give me a shot. Interview me and see what I can bring to the table. Take me up on a Free Lunch if you'd like. I can be reached at 303.520.8700 or via e-mail.
Thanks for taking the time to visit my web-site. I appreciate it.
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