The only real estate process that is more confusing than buying your first home is selling it. Making the decision to sell a house, even if it is heart wrenching, is a piece of cake compared to the myriad other details and decisions that will compete for your attention. Let’s take a look at some of the most common questions about home selling and get some answers.
How Much is My House Worth?
Your house is worth “fair market value,” or, exactly what the current market thinks it’s worth. Determining fair market value involves comparing your house to similar homes that have sold nearby over the last three to six months. While it’s not rocket science, the determination of value, and listing price, is best left to a real estate agent. Most real estate agents offer what is known as a comparative market analysis (CMA) free of charge. Even if you plan to sell the house without an agent, avail yourself of this free service so you know exactly how to price the house.
Should I Sell My House Myself?
To save money on real estate agent commissions, many homeowners attempt the for-sale-by-owner (FSBO) process. Many succeed. Others fail. In their studies of FSBOs, The National Association of Realtors® has found that the most difficult tasks faced by these homeowners include:
- Determining the listing price
- Understanding the contracts, disclosures and other paperwork
- The amount of time necessary to show the house, negotiate, etc.
- Readying the home for the market
- Getting the home sold within the necessary time period
If you feel that you can confidently tackle the above challenges, then the FSBO process may be for you.
Should I Make Repairs Before Selling my House?
Whether or not to do home improvements or repairs before putting a house on the market is a common dilemma. If the repairs are cosmetic in nature, such as holes in the window screens, sagging screen doors or missing porch light covers, then yes, they should be repaired. Anything else that affects the house’s curb appeal should be fixed.
As the seller, you will be filling out a mountain of forms. One of these is a disclosure of known issues with the house. Depending on the item requiring repair, the buyer may ask that the price of the house be discounted to compensate for the cost of replacing or repairing. Additionally, the smart buyer will have the home inspected professionally so other items will most likely turn up. If any of these items affect health and/or safety, the buyer’s lender may demand that repairs be performed before the close of escrow. So, it’s a good idea to get these repairs out of the way before placing the home on the market. Here are some common items that buyers typically want remedied before the sale can proceed:
- Problems with heating and cooling systems
- Roof problems
- Problems with wiring or other electrical issues
- Dry rot or other pest problems
Remember to hang on to all repair receipts, especially if a repaired item is under warranty. The buyers will want to see who repaired or replaced the item and will need the receipt in case something goes wrong.
Do I Need to Hold an Open House?
Open houses are probably one of the most hotly contested issues within the real estate community. Many agents feel that they don’t work and refuse to hold them. Other agents feel they don’t work, but following advice from the National Association of Realtors® (NAR), they hold open houses to scout for new clients. Then there’s the agent who holds open houses because she’s read the statistics and understands that there is a chance the perfect buyer is among those who will view the house on a Saturday or Sunday afternoon.
About 45 percent of potential homebuyers will visit an open house, according to the NAR. That figure represents almost half of the buyer pool – a large enough group to safely assume that your buyer may be among them. To take full advantage of an open house, ensure that the house is market ready by cleaning, de-cluttering and staging.
What Questions Should I ask an Agent About Selling a House?
Your listing agent’s most important job is to market your house to other real estate agents, to her network of buyers, and to the public. Therefore, the number one question to ask agents during the interview is how they plan on marketing your house. Ask for examples of how they’ve marketed other homes and request a formal marketing plan, in writing. Ask the agents you interview about their list to sell ratio – a figure, expressed as a percent, of the number of houses listed to the number of houses actually sold. Choosing among agents with the highest percentage ensures that you’ve chosen an agent who prices homes appropriately and knows how to market.
If you have a special-needs home, such as a short sale, fixer-upper, or luxury home, it’s imperative that you choose an agent who specializes in that type of home. Most real estate brokerages offer advice free of charge. If you choose to go it alone and not use a broker, it’s a good idea to seek the advice of an attorney.
Guest post by Eric Proulx of RealEstate.com