The home selling process begins long before your property is actually placed on the market for sale. It can be stressful and emotional at times but arming yourself with the information below can help keep you on an even keel throughout the process to maximize your time, money, and well-being.
1. Decision to Sell
The first step in the home selling process is the actual decision to sell. There are many unique emotional and financial reasons for selling your home that factor in your decision. Whether it is moving up to a larger home because of a growing family, down-sizing to a condo downtown, relocating because of a job, or any number of other scenarios, each situation is entirely unique. However, besides the personal reasons, there are some market wide and financial elements (such as the seasonality in the market, the current market inventory vs. the rate of sales, your home’s current value, the type and amount of mortgage you are carrying, etc) that should factor into your decision as well. Our job at Charlesgate Realty Group is to advise you to make the best decision for you and your family. To do this, through a thorough initial consultation, we take into account all of your personal needs and compare them with what is happening in the market at that time, to provide you with the best advice for you to make the best decision whether to sell or not.
2. Pricing your home
Setting the appropriate price for your property is arguably the most important factor in selling your home for maximum value within a reasonable marketing period. This, however, is much easier said than done. The difficulty lies in the fact that each piece of property is unique and what buyers will pay for one house or condo is not the same as what they will pay for another even for a similar style in the same neighborhood. It is important to be able to use the actions of all the buyers in the market as a whole to come up with a fair market value range. By using comparable data from similar properties sold in the last 3, 6, even 12 months, a trend pattern is discovered which allows you to narrow down the value range of your property. Using real facts and information (not just anecdotal evidence like what that one property next door sold for) such as “days on market”, absorption rate, tax valuations, and average and median prices for the market as a whole as well as local comparables helps to gain insight on the market and price your property most efficiently. We use these methods when we produce a comparative market analysis for your home.
After establishing a firm price range for your property, the next step is to establish the price at which to market your home. This is dependant on personal needs like how quickly you have to sell as well as the external factors relating to the market such as the number of comparable homes on the market at the time and what they are listed for. The more aggressive the price is set to market and the more difficult it will be to sell your property. Sometimes this can be beneficial and earn you more money (especially in a hot seller’s market) but it can also backfire and cause your property to stagnate on the market for too long forcing you to sell for less down the road (usually in a buyer’s market).
3. Preparing your home for sale
Along with appropriate pricing based on real market data, preparing your home for sale is the other most important factor to maximize the sale price of your home. There are two forms of this preparation. The first is to get it ready for market and the second is to get it ready for showing. These steps are vital, and the goal is to make your property appear easy to live in and without any major concerns for a buyer. This creates a buying atmosphere.
Getting it ready for market – This step involves making any necessary repairs or upgrades to your home. We recommend hiring a thorough home inspector to inspect your home and provide you with a report to determine if there are any structural repairs needed (the roof, HVAC system, and foundation are definite hot spots for buyers). After that, cosmetic repairs and changes can be done. Consulting with a real estate agent can be very helpful at this stage. Some upgrades are worth the money while others are not. Many times even a relatively inexpensive upgrade such as a fresh coat of paint, replacing old carpets, or refinishing hardwood floors can go a long way to improving value.
Getting it ready for showing – Once your home is on the market, it is vital to keep it ready for showings at any time. This is a difficult task at times, but well worth the effort. First impressions are key to attracting interest and offers from buyers. The main rules are to reduce clutter as much as possible, and keep your home as spotlessly clean and neat as possible at all times. Be ready for showings on short notice – they will happen and it is best if you are prepared to accommodate all buyers. .
4. Marketing Period
The next step in the process is the marketing period for your home. The goal is to maximum the exposure your property gets to potential buyers. Because each property is unique, we craft a customized marketing plan for each home. For more details on this, please see how to sell your home for maximum value.
During the marketing period, you will receive an offer for your property. This is when the fun begins. Offers will be drafted by the potential buyer (or their agent or attorney) and negotiations begin. An offer could be accepted immediately or counteroffers could be made for days depending on the circumstances. Typically, a negotiation will last about 24-48 hours. An offer is not just about price. Other variables to consider are:
Contingencies (like home inspection clause, mortgage clause, etc.) – These give the buyer rights to back out of the deal depending on certain conditions up to a certain date.
Earnest money deposit (typically $1000 in the Boston area) – A larger deposit many times indicates a more serious and capable buyer and vice versa.
Time frame – This lets you know how long you have to respond to an offer from a buyer.
Closing date – This is the date when the transfer of the property takes place.
Down payment – A larger sum of money for a down payment usually means a well qualified buyer.
A key element in the negotiations is to realize it is not just price that is of importance. The above terms can make a big difference to your bottom line, and additionally making sure the buyers are qualified (checking preapproval letters, etc) and ready to proceed with the purchase. There is nothing worse than taking your property off the market because you have a signed offer, only to have the buyer back out weeks later because they were not qualified. A well constructed offer can help prevent this.
6. Purchase and Sale Agreement
Between the offer and the P&S Agreement, there is usually a 10-14 day period during which the buyer will complete a home inspection and review any other records as spelled out in the offer. During this period, the P&S will be drafted by your attorney (although it is not required, we always recommend hiring a good real estate attorney to write the P&S Agreement). This document fully spells out the terms of the sale of your home. There may be some re-negotiation of different terms and conditions set forth in the offer, especially if some problems are discovered during the home inspection. If so the agreement will incorporate those terms.
The closing is typically 45-60 days from the date of the offer. This is when title actually transfers hands from seller to buyer and the escrow monies are distributed. During the period between the P&S and closing, many legal documents must be obtained by the seller (or agent representing the seller) in order to comply with state regulations including:
Smoke Detector Certificate – The fire department must be brought in to certify that there are working fire detectors and carbon monoxide detectors in the home.
6D Certificate (for condos) – States that all common charges and dues are paid up to date.
Insurance Binder – Ensures that the buyer has adequate insurance coverage for the property upon taking title.
The closing attorney will prepare a settlement statement (also known as a HUD) for review a day or two before closing. This form details all the money changing hands and needs to be reviewed for accuracy. After that it is on to the actual closing. Many closings take place at the local Registry of Deeds, or at the broker or attorney’s office. This takes approximately an hour and once complete, you get the proceeds from the sale and the sale is complete.