The Real Estate Selling Process
As your listing agent, my highest priority is getting you, the seller, the highest possible sale price, in the shortest period of time, with the least amount of inconvenience to you.
Pricing and the CMA
The Comparative Market Analysis, or “CMA” as it is known in the real estate industry, is the foundation of the home pricing decision, which is one of the most important aspects of the entire home selling process. A properly prepared CMA is as much an art as it is a science. Experience and local market knowledge plays a critical role in preparation. The CMA is an analysis of homes comparable to the “subject property” in an attempt to determine the current fair market value of the subject property. I will look first and foremost at homes of a similar size, style and age that have sold recently in your immediate geographic area. The CMA is not complete until I have had an opportunity to physically tour your home and adjust the results of the CMA to match my observations and conclusions.
Many times sellers would like to establish pricing on how much they paid for or invested in their home. This can be an expensive mistake. If your home is not priced competitively, buyers may reject it in favor of other larger homes for the same price. At the same time, the buyers who should be looking at your house will not see it because it is priced above their price range. The result is increased market time and, unfortunately when the price is eventually lowered, many buyers are wary because “nobody wants to buy a house that nobody else wants”. The result is lower priced offers and an unwillingness to negotiate on the part of the buyer. Every seller wants to realize as much money as possible from the sale of their home, but a listing priced too high often sells for less than market value. My recommendation is to think within a “range of values” that will accommodate not only price but also terms that may be valuable to you in the overall sale process.
Marketing opens the door that exposes your property to the marketplace. It means distinguishing your home from hundreds of others on the market. It also means selling the benefits, as well as the features. The two most obvious marketing tools (open houses and print advertising) are only moderately effective.
I will tour your home with you from a “Buyer’s” point of view, making recommendations on repairs, decorating and features that will make you home more attractive to the buying public.
To get your home sold quickly, it’s important that other agents show it as well since many potential buyers are possible. Typically what a good agent will do when working with a buyer is to discuss the buyer’s needs and determine what kind of home they are looking for. Then the agent will search all the available homes for those most closely matching what the buyer wants. Next, the agent puts together a list of the best matches to show to the buyer. When a busy agent is compiling a list of homes to show a buyer, the agent will naturally tend to show those houses that are easiest to gain access to first. With the use of a “lock box” or SUPRA box which is a device that holds a key to the home, that only qualified agents can access the house for a scheduled showing. Try to make it as convenient as possible for your home to be shown. If you don’t, the agent may show the buyer other homes, and if that buyer makes an offer on one of them, you’ve just lost a great opportunity.
It’s best if you can leave when the agent and buyer arrive to see your home. Buyers may not feel comfortable with you there, and the buyer’s agent may ask you to represent things you may not be comfortable with.
Most showings will occur in the first three weeks your home is listed, per the National Association of Realtors (NAR). In a typical listing situation the number of showings per week increases during the first, second and third weeks after a home is listed for sale (peaking during the third week). Starting in the fourth week, the showings begin to decrease and continue to do so until approximately the eighth week, at which time they level off at the lowest point.
A new listing is 1.) “Exciting” (that is, there is an emotional advantage to you as a seller at the beginning of the listing period; buyers have an elevated sense of urgency and expectation at this time), 2.) Shown more, and 3.) Generally sells for a higher price than older listings. Later, prospective buyers begin to wonder why your home hasn’t already been sold.
- When you receive an offer on your home I will set a time to meet with you to:
- Provide you with an updated CMA reflecting current market conditions at time of offer.
- Review the offer; explain pros and cons of all provisions to you.
- Review the financial position of the prospective buyer.
- Review your net proceeds so you fully understand the financial implications of the offer BEFORE you are committed to the decision.
- Coordinate review of the offer with your attorney should you use one.
- Provide my opinion as to the various strategies and alternatives that you may consider in the acceptance, counter or rejection of the offer.
- Prepared documents (counter offer, multiple offer etc.) and make delivery to buyer or buyer’s agent.
It might seem as though once your home has an accepted offer that the selling process is complete. Not only is it not over yet, but some of the most complex aspects of a real estate transaction now begin. Through automation, closings can occur within a week in some cases, at least in theory. In practice, it takes time to arrange financing, conduct inspections, obtain appraisals, locate replacement housing, contact movers, pack and actually move.
While instant closings may not be practical, neither are closings too far in the future. The problem with closings that are set up past 60 days from the acceptance of the offer is that loan rates are difficult to lock in. If mortgage rates go up, it’s possible that the buyer will not be able to afford the home and thus the transaction may fall through. Here are some additional items to think about regarding your closing:
- Contracts routinely depend on the ability of a buyer to obtain financing, which is why most sellers prefer buyers with pre-approval letters from lenders.
- A growing percentage of transactions involve a home inspection, or a physical review of the home by a licensed home inspector.
- Lenders may establish numerous conditions before granting a loan. They typically will want title insurance to protect against title errors, surveys and an appraisal to assure that the home has sufficient value to secure the loan.
Your home has an accepted offer and the buyer has scheduled a home inspection. Should you be worried about what the inspector might find? The answer depends of course on the condition of your home and how well you’ve maintained its major components over the years. Regardless of what the inspector may uncover, you shouldn’t be overly concerned about the actual home inspection provided that you have filled out the Real Estate Condition Report completely and accurately. Here are some suggestions as to how you might help the home inspection process go smoothly:
- Leave the premises. During the selling process it is perfectly reasonable to be absent from your home during the home inspector’s visit. Your agent should be familiar with the home inspection process and be able to act as your representative. In fact, many listing agents prefer that the seller not be at home during the buyer’s home inspection.
- Some sellers mistakenly assume the home inspector is an adversary. Experienced professional home inspectors aren’t on a mission to find fault with every tiny aspect of your home. The home inspector’s role is to offer the buyer a fair assessment of the property.
- Don’t attempt to refute negative comments about your home during the inspection. Inspectors don’t appreciate being followed around by argumentative or defensive home sellers (or sellers’ real estate agents). The time to explain and negotiate will come after you receive and review your copy of the inspector’s report.
- Don’t make statements about your home that are beyond your personal knowledge or can’t be verified. For instance, if the inspector asks you how old the roof is or when certain appliances were installed, check your records before you answer. If you have documentation, provide a copy of it. If repairs or modifications were made prior to your purchasing the home, don’t guess when that work was performed. The same caution about misrepresentations applies to questions about whether permits were obtained for remodeling, the exact square footage of your home and so on.
- Don’t block access to normal living areas of your home. If the home inspector can’t enter a room or complete some other aspect of the inspection during the selling process that will be noted in his or her report and the buyer may question it.
- Make agreed-upon repairs promptly. The buyer may ask the inspector to okay any repairs you agree to make as a result of the inspection. The sooner you make the repairs, the sooner the contingency can be met. Delaying the repairs until the last minute won’t stop the buyer from having those items re-inspected, but it could delay the closing.