Selling Your Home
90% of American homeowners hire a qualified agent to sell their homes – and with good reason.
Selling is a daunting task for any homeowner. It involves pricing the house, determining whether a buyer is qualified, creating and paying for advertising, showing the home to prospective buyers, understanding real estate regulations, being available whenever a prospective buyer wants to view the property, negotiating and preparing contracts, and coordinating the details of a closing.
It’s no surprise that homes sold by real estate agents sell faster, more easily, and for more money.
To help prepare you for the process and make it a success, this section delves into a variety of topics related to selling a home, including:
- The Role of Your Agent
- When to Contact an Agent
- How Long it Takes to Sell
- Pricing Your Home
- Putting Your Home's Best Foot Forward
- Investing in Repairs or Renovations
- Finding Buyers
- Closing the Sale
The Role of Your Agent
Real estate agents know how to sell homes. Successful sales balance four components: the market, price, condition of the house, and exposure. Because agents know about market trends and the other houses in your neighborhood, they’re well equipped to play up your home’s advantages and downplay disadvantages. Plus, agents:
- Have access to people who are most likely to buy your home
- Are trained in areas like pre-qualifying potential buyers and negotiating with them
- Will list your property in the MLS so anyone worldwide can find it
- Are always "on-call"—they work weekends and answer the phone at all hours
We like to think good training and experience make the best agents. But the truth is, not every agent is right for every seller. We suggest using this simple formula to help decide whether an agent will work well for you:
COMPETENCE + COMFORT = CONFIDENCE
- Competence: When you first meet with an agent, expect to see a portfolio of credentials, past achievements, sales volume and letters of recommendation. Look for evidence that his or her background is relevant to your needs; that is, someone whose portfolio includes success with houses in your price range, preferably in your neighborhood.
- Comfort: The importance of being comfortable with your agent as a person cannot be overstated. You're going to be dealing with this individual on a regular basis, maybe for months, during a time that can be trying. Your agent will share the tension, anticipation, frustration and ultimately joy of selling your house.
It takes a combination of these two characteristics to inspire the confidence a homeowner needs to maintain peace of mind through the selling process. This is something every Coldwell Banker agent strives for.
If you’re looking for an agent, start by talking to friends, neighbors, relatives or anyone else whose recommendation you trust. Another way to find an agent is by responding to local advertising from agents, such as "just sold" mailings. These self-marketing efforts suggest the agent may have more to offer than one who picks up the phone when you call the local real estate office.
When to Contact an Agent
You should connect with a qualified agent as soon as you decide to sell your home. There are always buyers looking, and the agent is your bridge to those buyers. While the number of buyers remains relatively constant, they tend to act when a new property with high value comes up for sale. Timing is key, and a good agent is able to act quickly.
Peak selling seasons vary in different parts of the country, often dictated by weather. Late spring and early fall are prime listing seasons because houses tend to "show" better in those months. And of course, people like to do their house shopping in pleasant weather.
But keep in mind that there are also more houses on the market during peak seasons, which means you'll have more competition. While there is seasonality in the real estate market, it shouldn’t completely dictate your decision of when to sell.
Even if you're under no pressure to sell, waiting for particular market conditions is not likely to increase your profit potential. While you’re waiting for conditions to improve, you are continuing to make mortgage payments, insurance payments, HOA payments if applicable, and home repairs. This increases the amount of money you invest in your home while the price of your next home may also be increasing.
How Long It Takes to Sell
Average listing times vary from 14 to 90 days, depending on a variety of factors, which your broker can fill you in on. When your property is first put on the market, creating a perception of value and a sense of urgency will get you the greatest number of showings.
Buyers who look at your property in the first few weeks are typically financially qualified and have been working with a Realtor®. They will likely have seen other properties in the area, and know about market prices. They contacted agents months ago about properties they found, and are prepared to make offers when they see the right home at the right price.
By the third week, the number of showings will drop. From this point, most potential buyers are just entering the market and will not be ready to make a decision for months. They still have to arrange financing and have not seen enough properties. So, your best opportunity is during the initial exposure to the market. This is when you’ll have access to the largest pool of buyers, and when properties sell at the highest price.
Buyers pay attention to how long a house has been on the market, and their perceptions change accordingly:
- A house that has been on the market for only two days is a "must see."
- As the days pass, buyers think the seller is anxious and should be willing to negotiate.
- When the property is on the market longer, they wonder why it hasn’t sold and think something might be wrong with it.
Buyer perceptions of value decrease with every day a house is on the market. This is another reason a property will most likely sell at its highest price within its first few days on the market.
Pricing your home
Your home is only worth what a buyer in the current market is willing to pay; in other words, fair market value. This is the highest price an informed buyer will pay, assuming there is no unusual pressure to complete the purchase. It is usually not the asking price.
You will know if your home is priced right by the number of showings:
- If a property is overpriced, buyers and agents will notice it when it hits the market, but there won’t be a perception of value. Therefore there will be no showings or offers.
- If a property is priced close to buyers’ perception of current value, there may be some showings, and possibly an offer below the asking price. Without competition and a sense of urgency, there is no need for a buyer to offer the asking price.
- If the property is priced a little below buyers’ perception of value, it becomes a hot property. There will be numerous showings, multiple offers, and possibly a bidding war. By setting the price a little below buyers’ expectations, the seller simulates the conditions found in an appreciating market, and ultimately sells more quickly and possibly for more than the asking price.
It is your agent’s job to watch the market and determine how your property stands out against the competition. It is the broker’s job to make sure you position your property at a price to drive traffic to it and create the best conditions for more than one offer. This is why they recommend asking prices based on recent listings and selling prices of houses in your neighborhood.
If you want more help on accurately pricing your home, you can also:
- Order an appraisal to price your home.
- Ask for feedback from people who walk through your home. This will help you see your house as a commodity that has positive and negative selling points.
- Ask a neighbor, friend or relative to point out advantages or disadvantages about your house that you might not have considered.
Most buyers leave room for negotiation when they make an offer. Thus, a certain degree of flexibility is called for on the part of the buyer and seller. While it is ultimately your decision to accept or reject an offer, or present a counter-proposal, a good agent can be of great assistance during the negotiating process. As negotiations proceed, your agent will inform you of your options in responding to each offer.
To get an estimate of fair market value, plus details on recently sold homes, ask one of our Coldwell Banker agent for a Competitive Market Analysis (CMA) of your house. This service is free of charge, with no obligation.
Putting Your Home's Best Foot Forward
Unless your house is nearly new, chances are you'll want to do some work to get it ready to sell. What type and how much work depends largely on the price you're asking, the time you have to sell, and of course, the present condition of your home.
As a general rule, stick to light, neutral colors. Keep your yard and all rooms free of clutter. Remember, when a buyer looks at a house, he or she is trying to imagine living there. Create as clean a canvas as possible. Here are a few low-cost ways to present your home in the best light:
- "Curb appeal" is the common real estate term for everything prospective buyers can see from the street. Keep two key words in mind: neat and neutral. New paint, an immaculate lawn, picture-perfect shrubbery, a newly sealed driveway, potted plants at the front door…put them all together, and drive-by shoppers will probably want to see the rest of the house.
- People may look behind closet and crawl space doors, as well as those to the bedrooms and bathrooms. So get rid of all clutter; have that garage sale and haul away the leftovers.
- After you've cleaned, try to correct any cosmetic flaws you notice Paint rooms that need it, re-grout tile walls and floors, remove or replace worn-out carpets. Replace dated faucets, light fixtures and handles on your kitchen drawers and cabinets.
- Clear as much from your walls, shelves and countertops as you can. Give your prospects plenty of room to dream.
Certain higher-cost home improvements have proved to add value and/or speed the sale of houses. These include:
- Adding central air conditioning to the heating system
- Building a deck or patio
- Finishing a basement
- Doing some kitchen remodeling
- Adding new floor and/or wall coverings, especially in bathrooms
Improvements that return less than what they cost are generally items that appeal to personal tastes, like adding fireplaces, wet bars, swimming pools, or converting the garage into an extra room.
For more information on getting your home ready to show, take a look at our Home Selling Checklist.
Investing in Repairs and Renovations
You're unlikely to sell for more than 15% above the median price of other houses in the neighborhood, whether you do $1,000 worth of work or $50,000. That's why you might want to ask your broker’s opinion about the viability of recouping the cost of any major renovations before you start the work.
For a complete list of people who can help you make smart updates to your home, especially for larger jobs involving mechanical systems (heating, electrical, plumbing) or local building codes, contact a licensed home improvement company.
This is particularly important because if the buyer's inspection reveals major problems with your home's structure or mechanical systems, they can negotiate to have them fixed properly. Sometimes, repairs may be required before the transfer of title takes place. This is especially true in sales that involve financing insured or guaranteed by the government (FHA/VA loans, for example).
You may have also heard about lawsuits involving sellers who failed to disclose problems before the sale, such as an addition to the house that wasn't built to code or the presence of lead-based paint. Most states maintain very specific disclosure laws and require sellers to provide buyers with a completed and signed Property Condition Disclosure Form. Consult your Coldwell Banker agent for details.
These are just a few reasons to retain a lawyer or agent who knows as much about the condition of your property as you do. It's also a good idea to get the buyer's written acknowledgment of any major problems when you accept their offer. A Coldwell Banker Home Protection Plan offers protection for you and your buyer, covering repair or replacement costs for breakdowns to most major systems and built-in appliances up to a year or more after the date of closing.
Our agents will list your home in the Multiple Listing Service (MLS), a system that reaches millions of buyers around the world. The system enables brokers to share commission on the sale of houses. For example, if you list your home with one broker and another broker actually sells it, he or she shares the commission. The advantage to you is clear: More brokers have an interest in selling your home.
Fewer than 5% of buyers actually purchase the first house they call an agent about. So our agents will design advertising to "find the buyer" with appealing layouts, eye-catching photos and professionally written descriptions. They also use multiple channels—online, print, radio, TV and direct mail.
As another valuable part of the marketing process, our agents offer open houses to prospective buyers who want a low-pressure, "browsing" atmosphere. If you have an open house, you shouldn't expect it to generate a sale, at least not directly. What you can expect is increased showings of your home after the event, whether from calls to your broker or attendees returning with their agent.
Agents often hold an open house for other agents shortly after a house is listed. This type of event, usually held mid-week when other agents can give it their full attention, can be as important as your listing in the MLS. The more professionals who see your home, the more prospects you're likely to reach.
You and your pets should definitely plan to be out of the house during any open house. The same goes for showings to prospective buyers. People often feel uncomfortable speaking candidly and asking questions in front of current owners. You want them to feel as free as possible to picture your home as their own.
Closing the Sale
Keep in mind that when you sell, you’ll owe your agent’s broker a commission. Perhaps the most important matter you negotiate at the time of listing your house with a broker is the duration of the listing contract. Terms vary, but listing agreements are seldom for less than three months or greater than one year. Some brokers offer homeowners an "out" if the agent isn’t performing or if they are unhappy with their service.
Good agents are also extremely helpful in the days immediately prior to the closing. They'll help you prepare by giving you a step-by-step preview of the entire process and what will be expected of you. They'll also make sure you bring all necessary documents and other information.
The buyer, the buyer’s agent, and the broker who represents your agent will all be at the table when you close the sale and hand over the keys. (You’re welcome to invite your agent, but his/her presence is not required). The lender and/or title companies will also be there.
Once all of the documents are signed, the home is sold. Congratulations!
We'll help make the experience of selling your home as smooth and easy as possible. Even if you're not ready to list your home and simply have questions about the local market, price or mortgage trends, you are welcome to contact us at Coldwell Banker Brokers Of The Valley (707) 258-5200 to speak to an agent today!