- 1Step One in our 10 step process to selling your home - Use a Realtor or go For Sale by Owner (FSBO)?
The first item in our 10 step process to selling your home is to decide whether you want to sell your home For Sale by Owner or hire a Realtor. Every situation is different and for some sellers, selling by owner may be a better option.
The main reason many people consider FSBO is to save money by not paying a commission to a real estate agent. While saving money is a solid reason to choose this route, there are many considerations that need to be examined, such as marketing costs, attorneys, required disclosures, showing your home to strangers, misrepresentation and more.
Moreover, the time needed to sell your home by yourself is something you need to account and be prepared for.
To learn much more about this, see our page that dives into the pros and cons of selling by owner vs. hiring a real estate agent, and it will help you determine which option is best for you. We compare and contrast selling by owner versus hiring a real estate agent. The goal is not to discourage you from pursuing a for-sale-by-owner transaction, it's simply to give you enough information so that you're able to determine whether selling your home on your own makes sense for you.
- 2Pricing your home to sell
Once you make up your mind how you want to sell your home, the next step is to think through pricing. Every seller wants to sell their home for the most amount of money and in the least amount of time.
Location accounts for the largest portion of your home’s value. The next largest portion is a combination of the following:
There are additional factors such as:
While finished basements can add value, the amount of value is much less than above-grade square footage.
When trying to determine the price of your home, you want to compare your home to other homes similar to your home… same style if possible. You want to look at the following statuses: active, pending, sold, expired and withdrawn listings within the past 6 to 12 months. Ideally, you will compare homes in or close to your subdivision. If there is not enough data available, you can expand your search to include more homes, such as all homes in a certain school district or zip code. However, the closer to your home, the better.
It’s also very important to understand the supply and demand of the current real estate market. In real estate, supply and demand can be determined by looking at the market absorption rate. Market absorption rate is the number of months it would take to sell the currently listed homes on the market and is one of the biggest factors in pricing your home. It is expressed in months of inventory, which is calculated by dividing the average number of sales per month by the total number of available homes.
The figure shows how many months it will take to exhaust the supply of homes on the market. For example, if there are 100 homes on the market and 10 sell per month, there is a 10-month supply of homes on the market. Don’t be concerned with the absorption rate for the entire market, you only care about it in your price range and location.
To learn more about pricing your home, check out The Three Step Process To Properly Price Your Home and don’t miss the 11 Traps to Avoid When Pricing Your Home.
- 3Preparing your home to sell
It's very important to set emotions aside and learn how to dress your home for success to ensure your fairly compensated for its sale.
It's important to understand that buyers buy on emotion, and not logic. When preparing your home to sell, it's important to appeal to a buyer’s emotions rather than their logic. Do not make the mistake of spending a lot of money or time on things that appeal to a buyer’s logic.
Your home is going to sell based on how it makes a buyer feel.
Also, you want to make sure your home is 100% ready to go before you begin showing. You never get a second chance at a first impression, and often the first people who view your house could be among the best prospects!
The above only scratches the surface when it comes to preparing your home to sell. To learn more, check out our blog post called How To Properly Prepare Your Home For Sale. This could be worth thousands of dollars to you by revealing the secrets of making your home more appealing to a buyer. It explains the importance of converting your home from living condition to selling condition. I think the clear, concise information presented there will help you to get your house in the best condition possible.
- 4Show Your Home in Its Best Light with Great Photography
So, you’ve priced your home properly and worked very hard to prepare your home to sell. Those two things are very important but if you don’t have really good photographs that show off the best-selling features of your home, you still may not get many showings. Before homes were advertised online, buyers would see one picture of the exterior of the home in a print ad. If they wanted to see the inside, they would have to make an appointment to view the home in person. It was only important to have one excellent picture of the exterior to entice people to want to see the inside. In today’s real estate environment, the first showing happens online – not in person! Almost every buyer looks at photos, videos and 3D tours online first, and if they don’t like what they see online, they will not make an appointment to view your home in person. Because of this, it’s very important that professional photography and video equipment are used. Pictures taken on a cell phone just don’t cut it anymore.
It’s also very important to use aerial photography and/or video if the home and surroundings warrant it. Here are a few examples of situations where aerial photography or video would be beneficial: a home on a lot with acreage, if the home is located next to a lake or golf course, or if it’s close to a neighborhood playground or trail.
Want to know what to do before the photographer arrives? Check out our Preparing Your Home for Pictures checklist.
- 5Time to Go Live! Get Ready for Home Showings
The next step in our 10 step process to selling your home is preparing for home showings. If you priced your home correctly, prepared it properly, took great photographs and hired a real estate agent with an aggressive marketing plan, you will be getting showings very soon! So, what do you do once a home showing is scheduled?
It’s important that you prepare your home to show its best before every showing. We’ve created a simple checklist that you can use before every home showing. This way, you know you have done everything possible to make sure your home shows it’s best.
It may not be possible to complete the entire checklist for each home showing but the more you can do, the better.
Please keep in mind, this checklist is to be used to prepare your home for a home SHOWING and is very different than preparing your home to sell. These are the tasks that should be completed just before home showings.
Here is the Preparing For A Showing checklist
Showings are generally scheduled for one hour. Oftentimes, your home is one of many homes the buyers are looking at that same day. When scheduling appointments, there is no way to know how long buyers will stay at each home so it’s kind of a guesstimate of when the agent thinks they will arrive at your home. Despite best efforts, it is difficult to always arrive at the scheduled time. Please try to be accommodating.
If your home is listed with a real estate agent, you will be notified by phone, text or email, (your preference) when a buyer wants to look at your home. Once you give permission, the agent representing the buyer will use the electronic lockbox on the door to access your home.
Lockboxes are storage containers that hold a key for your house that real estate agents can access. It should not affect how you enter or exit your home although it can make the handle slightly more difficult to turn only because there is something hanging on it and in rare occasions will not allow a screen door to shut because of the size of the lockbox. In these situations, the lockbox can be attached somewhere else such as on a railing. Even though there is a lockbox on your home, no agents can use the lockbox until they have your permission.
Most of the time, you will have several hours’ notice and a fairly high percentage of the time, you will be notified the day before the showing. There will be times where you are notified a few days before a showing but there may also be times where you receive a call that a buyer wants to look at your home in a couple hours. If the showing date/time does not work for you, you can always say no. No showings will happen without your approval. An agent cannot just use the lockbox without notifying you first.
As the seller, you do not want to be present at showings unless you are selling by owner. Home buyer’s need to feel as comfortable as possible when looking at a potential new home. It’s a big investment and they should feel welcome to open closets, look in cabinets etc. They also need to be able to talk open and freely with a spouse or their agent about your home and they are unlikely to do that when the seller is present.
Some sellers tend to talk too much when they attend showings. Buyers are not there to talk to the seller. They are there to determine whether they like the house enough to seriously consider purchasing it. If the buyer likes what they see at the first showing and have further questions for the seller, a second showing can be arranged for the seller to be present.
Please be as flexible as you possibly can be on allowing showings appointments when the buyers want to look at your home. Typically, your home is NOT the only home the buyers are looking at that same day. Your home may be the fourth out of six homes that the buyer is looking at and based on where the homes are located, there may only be one time slot where it makes sense to view your home. If you turn down this showing, the buyer may never see your home. Scheduling appointments becomes a real challenge when sellers are not flexible.
- 6Feedback from showings
It’s important to get feedback after each and every showing so you can see if there are any consistent patterns. Typically, an e-mail is sent from the listing agent to the showing agent after the showing asking what the buyer(s) thought about the property. The feedback will have specific questions such as:
Once the buyer’s agent completes the feedback request, a copy is typically e-mailed to the listing agent and to the seller.
You may not always appreciate the comments from the agent that showed your home but please do not contact the agent. The agent is just stating the opinions of their buyers, not necessarily their own.
The next step inour 10 step process to selling your home is what happens when you get an offer!
- 7You Received an Offer
Time to celebrate! You received an offer. The agent that writes the offer will get it to your agent, who will present the offer to you. The proposal will include the following:
Before you begin to analyze any purchase offer, you need to make sure the buyer can get the necessary financing. You should request a pre-approval with the offer.
You have three options to respond to the buyer’s offer:
- 1Accept the offer as written
- 3Reject the offer.
Getting a low-ball offer on your home can be pretty frustrating initially but low offers are a lot better than no offers. It doesn’t matter where a buyer starts with their offer…it only matters where they end up! Every buyer wants to get the best possible deal they can so don’t get offended if you receive a low offer. A low offer is simply the START of the negotiation process.
One of the biggest mistakes that seller’s make is not responding to a low-ball offer. This is a huge mistake! You should always respond with a counteroffer, even if it is close to full price… regardless of what the buyer’s offer is. There is no benefit to not countering.
If you handle the situation without losing your cool, it is very possible that you will end up with an acceptable offer when all is said and done.
- 8If You Accept the Offer, It’s Time for Inspections
Most buyers will have a whole house inspection completed. A licensed home inspector will inspect the premises and provide the buyer with a written report of the findings. If there are any repairs that a buyer is requesting, the seller’s real estate agent will be notified by a written amendment from the buyer’s agent.
Other inspections that buyer may have are radon, mold, termite and well & septic if applicable. If a bank is involved, they will require the buyer to have a termite inspection and a septic inspection where appropriate.
Buyers pay for all inspections unless approved for a VA loan. In those situations, the seller is required to pay for the buyer’s termite inspection.
The typical home inspection lasts between 1.5 – 3 hours depending on the size of the house.
The home inspector and most of the time, the buyers and buyer’s agent attend the inspection. Some inspectors bring in additional contractors such as HVAC and electrical contractors. Sellers should NOT attend inspections. If the buyer is asking for any repairs, the seller’s agent will be notified by a written repair amendment with supporting documentation from the buyer’s agent. Your listing agent or closing coordinator will contact you once we have this information.
Buyers can ask for any repairs but typically the seller is only responsible for repairs related to:
If the seller is not willing to make these repairs, it generally gives the buyer the opportunity to back out of the contract. If the buyer backs out, the seller would then have to disclose these defects to any potential buyer(s) that may look at the home in the future.
Sellers are typically responsible for radon mitigation and re-testing if the radon level is over 4.0 pCi/L. Sellers are also typically responsible to make any repairs and re-tests related to well, septic and mold remediation if mold levels are high.
If the radon level is over 4.0 pCi/L, it must be professionally mitigated. This typically runs $1000 - $1200 for an average sized home. Large homes or homes with a crawl space are generally more. The re-test usually runs around $125 for average sized homes and can be more for large homes and homes with crawl spaces if more than one testing unit is needed.
Now let's look at the last step of the 10 step process to selling your home.
Closing is the final step in executing a real estate transaction. The closing date is set during the negotiation phase and is usually 30-45 days after the offer is accepted. On the closing date, the ownership of the property is transferred to the buyer.
Most of the time, the buyer takes possession of the property at closing.
The closing usually takes place at a closing/title company. Sometimes it may take place at a bank, a lawyer’s office or at the real estate company. Typically, the buyer(s), seller(s) and both real estate agents attend closing along with a closing agent from the title/closing company. Sometimes the buyer’s lender may attend and in rare occasions, a lawyer may attend. If you are married and your spouse lived in the home, they will also need to attend the closing to sign a few documents, even if the home is in your name only.
If you live out of state and would prefer not to attend closing, you do not need to. The closing company can e-mail you all the documents with instructions and an overnight label to mail them back in. A few documents will need to be signed in front of a notary.
Hopefully you found value in this blog post. Let me know if you have any questions or would like to explore the possibility of selling your home. Whether buying or selling, we would love to meet with you to discuss your real estate needs. Contact us today at 309-693-1133 or Scott@RodgersREGroup.com.
Whether you are looking to buy or sell a house in the Peoria, IL area, it’s important to know how the real estate market is trending. Below, we have created a page full of charts that compares real estate markets for many of the local areas and is broken down by high school district.
Peoria County real estate is on the list at #10 for the most affordable areas to buy a home. New research from ATTOM Data Solutions found that nearly 4 in 10 US counties studied require no more than 28 percent of a buyer’s annualized weekly wages to purchase a median-priced home. These 10 markets
House prices are up 5% to 6% locally in Central Illinois. Some areas are a little bit more, some areas are a little bit less. In a normal market, there are around 2,500 homes for sale. In a buyer’s market, that number is closer to 4,000 homes for sale. Right now, there’s approximately 1,000 homes for sale.