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Sellers Resources

Thinking About Selling Your Home?

We are experts in the local market and will guide you through the entire process of selling your property from listing to sale. Our marketing plans assure your property maximum exposure and we pride ourselves on personal service. We encourage you to contact our office with your questions and to discuss your individual needs.

Disclosure

Whose obligation is it to disclose pertinent information about a property?

In most states, it is the seller, but obligations to disclose information about a property vary. Under the strictest laws, you and your agent, if you have one, are required to disclose all facts materially affecting the value or desirability of the property which are known or accessible only to you. This might include: homeowners association dues; whether or not work done on the house meets local building codes and permits requirements; the presence of any neighborhood nuisances or noises which a prospective buyer might not notice, such as a dog that barks every night or poor TV reception; any death within three years on the property; and any restrictions on the use of the property, such as zoning ordinances or association rules. It is wise to check your state’s disclosure rules prior to a home purchase.

What are standard contingencies?

Most purchase offers include two standard contingencies: a financing contingency, which makes the sale dependent on the buyers’ ability to obtain a loan commitment from a lender, and an inspection contingency, which allows buyers to have professionals inspect the property to their satisfaction. As a buyer, you could forfeit your deposit under certain circumstances, such as backing out of the deal for a reason not stipulated in the contract. The purchase contract must include the sellers responsibilities, such things as passing clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.

Do I need an attorney when I buy a house?

In some states, you do need an attorney to complete a real estate transaction, but in others you do not. Most home buyers are capable of handling routine real estate purchase contracts as long as they make certain they read the fine print and understand all the terms of the contract. In particular, you should be clear on the terms of any contingency clauses that will allow them to back out of the contract. If you have any questions at all, it may be advisable to consult an attorney to avoid future legal hassles. In looking for an attorney, ask friends for recommendations or ask your real estate agent to recommend several. Call to inquire about fees and to check on their experience. In general, more experienced attorneys will cost more, but real estate fees as a rule are small relative to the cost of the property you are buying.

Clean the windows and make sure the paint is not chipped or flaking.
Be sure that the doorbell works.
Clean and freshen up rooms, furnishings, floors, walls and ceilings. Make sure that bathrooms and kitchens are spotless.
Organize closets.
Make sure the basic appliances and fixtures work. Replace leaky faucets and frayed cords.
Eliminate the source of any bad smells, such as the kitty box. Use air freshener or bake a batch of cookies before your open house to ensure that the house smells inviting.
Invest in a couple of vases of fresh flowers to place around the house.

Negotiating

What are some tips on negotiation?

The more you know about a seller’s motivation, the stronger a negotiating position you are in. For example, seller who must move quickly due to a job transfer may be amenable to a lower price with a speedy escrow. Other so-called “motivated sellers” include people going through a divorce or who have already purchased another home. Remember, that the listing price is what the seller would like to receive but is not necessarily what they will settle for. Before making an offer, check the recent sales prices of comparable homes in the neighborhood to see how the seller’s asking price stacks up.

Some experts discourage making deliberate low-ball offers. While such an offer can be presented, it can also sour the sale and discourage the seller from negotiating at all.

Do sellers have to disclose the terms of other offers?

Sellers are not legally obligated to disclose the terms of other offers to prospective buyers.

How do I prepare the house for sale?

First and foremost, put it in the best condition possible, especially if you are in a market with few buyers and lots of homes for sale. That means taking care of any major repairs that could deter a buyer (such as replacing any broken windows or replacing a leaky roof) if you can afford it. Next, work on your home’s curb appeal. Make sure your landscape is pristine. Mow the grass, clean up any debris and weed the garden beds. Plant a few annual flowers near the entrance or in pots to be placed by the door. Other quick fixes that don’t cost a lot of money but can help you get top dollar for your home:

Clean the windows and make sure the paint is not chipped or flaking.
Be sure that the doorbell works.
Clean and freshen up rooms, furnishings, floors, walls and ceilings. Make sure that bathrooms and kitchens are spotless.
Organize closets.
Make sure the basic appliances and fixtures work. Replace leaky faucets and frayed cords.
Eliminate the source of any bad smells, such as the kitty box. Use air freshener or bake a batch of cookies before your open house to ensure that the house smells inviting.
Invest in a couple of vases of fresh flowers to place around the house

Property Taxes

Where can I learn more about appealing my property taxes?

Contact your local tax assessor’s office to see what procedures to follow to appeal your property tax assessment. You may be able to appeal your assessment informally. Mostly likely, however, you will have to go through a formal tax-appeal processes, which begin with an appeal filed with the appropriate assessment appeals board.

How is a home’s value determined?

You have several ways to determine the value of a home. An appraisal is a professional estimate of a property’s market value, based on recent sales of comparable properties, location, square footage and construction quality. This service varies in cost depending on the price of the home. On average, an appraisal costs about $300 for a $250,000 house. A comparative market analysis is an informal estimate of market value performed by a real estate agent based on similar sales and property attributes. Most agents offer free analyses in the hopes of winning your business. You also can get a comparable sales report for a fee from private companies that specialize in real estate data or find comparable sales information available on various real estate Internet sites.

Are taxes on second homes deductible?

Mortgage interest and property taxes are deductible on a second home if you itemize. Check with your accountant or tax adviser for specifics.

Pricing to Sell

What is the difference between list and sales prices?

The list price is how much a house is advertised for and is usually only an estimate of what a seller would like to get for the property. The sales price is the amount a property actually sells for. It may be the same as the listing price, or higher or lower, depending on how accurately the property was originally priced and on market conditions. If you are a seller, you may need to adjust the listing price if there have been no offers within the first few months of the property’s listing period.

What are the two most important factors when selling a home?

Price and condition are the two most important factors in selling a home, even in a down market. The first step is to price your home correctly. Use comparative sales information from your agent, or pay for a professional appraiser (usually $200 to $300), to objectively evaluate your home’s worth. Second, go through the house and repair any obvious cosmetic defects that could deter a buyer. In a down market, you may have to consider lowering your price and/or making a major repair, such as replacing the roof, in order to lure a buyer. Also, make sure that your home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage and a listing on the local multiple listing service or online listings provider. If this isn’t happening, take it up with your agent or agent’s broker. If you are still not satisfied you are getting the service you need, you may have to switch agents.

What is the best time to buy?

Because many buyers prefer to move in the spring or summer, the market starts to heat up as early as February. Families with children are eager to buy so they can move during summer vacation, before the new school year begins. The market slows down in late summer before picking up again briefly in the fall. November and December have traditionally been slow months, although some astute buyers look for bargains during this period.

Seller Financing

What is seller financing?

Seller financing is when a seller helps to finance a real estate transaction by taking back a second note, or even financing the entire purchase if the seller owns the home free and clear. Usually sellers do this when a buyer has difficulty qualifying for a conventional loan or meeting the purchase price. Seller financing differs from a traditional loan because the seller does not give the buyer cash to complete the purchase, as does a lender. Instead, it involves extending a credit against the purchase price of the home while the buyer executes a promissory note and trust deed in the seller’s favor. These special circumstances must be acceptable to the lender who makes the first mortgage on the property. The necessary paperwork is prepared by the title or escrow company after the terms are worked out between the buyer and seller.

If you are a seller considering such an arrangement, it is critical to thoroughly evaluate the creditworthiness of the buyer first. Fear of default makes many sellers reluctant to take back a second note. But seller financing can bring a higher price as well as complete the sale sooner in some situations. For more information, contact the Internal Revenue Service for a copy of its Publication 537, “Installment Sales.” Order by calling (800) TAX-FORM.

How are the rates set for seller financing?

The interest rate on an owner-carried loan is negotiable. Ask your agent to check with a lender or mortgage broker to determine the current rate on institutional first (or second) loans. Seller financing typically costs less than conventional financing because sellers don’t charge loan fees (points). Interest rates on an owner-carried loan will also be influenced by current Treasury bill and certificate of deposit rates. Sellers usually aren’t willing to carry a loan for a lower return than they would earn if their money was invested elsewhere.

What are the benefits of seller financing?

Seller financing offers tax breaks for sellers and alternative financing for buyers who can’t qualify for conventional loans. If you are a seller, the risks you face are the same as those facing any lender: Is the borrower a good credit risk? Will the property hold enough value over time to allow for the repayment of all loans made against it? You should run a full credit check on the borrower, require hazard insurance on the property, and include a due-on-sale clause. There also are financing, disclosure, and repayment-term requirements that need to be met. It is wise to consult a lawyer when putting together this kind of transaction.

Selling at a Loss

Can a home seller sell a home for less than its mortgage?

Yes, in some case you can sell your home for less than what you still owe on the mortgage, but this is complicated and depends on the lender. This situation is known as a “short sale.” Sometimes a lender will be willing to split the difference between the sale price and loan amount, which still must be paid. A short sale may be more complicated if the loan has been sold to the secondary market because then the lender will have to get permission from Freddie Mac, the two major secondary-market players. If the loan was a low down payment mortgage with private mortgage insurance, then the lender also must involve the mortgage insurance company that insured the low-down loan.

When does foreclosure begin?

Lenders will initiate foreclosure proceedings when borrowers become delinquent in their mortgage obligations, usually after three payments are missed. The lender will then notify the borrower in writing that he or she is in default. The lender can request a trustee’s sale or a judicial foreclosure, in which the property is sold at public auction. A borrower can cure the default by paying the overdue amount and the pending payment after the notice of default is recorded, usually no later than a few days before the property’s sale. Some sales allow the successful bidder to take possession immediately. If the former owner refuses to vacate the premises, the court can issue an unlawful detainer that allows the sheriff to come out and evict them. Borrowers should do everything they can to avoid foreclosure, which is one of the most damaging events that can occur in an individual’s credit history.

How is a home’s value determined?

You have several ways to determine the value of a home. An appraisal is a professional estimate of a property’s market value, based on recent sales of comparable properties, location, square footage and construction quality. This service varies in cost depending on the price of the home. On average, an appraisal costs about $300 for a $250,000 house. A comparative market analysis is an informal estimate of market value performed by a real estate agent based on similar sales and property attributes. Most agents offer free analyses in the hopes of winning your business. You also can get a comparable sales report for a fee from private companies that specialize in real estate data or find comparable sales information available on various real estate Internet sites.

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Common Q&A About Selling Your Home

What are some tips on negotiation?

The more you know about a seller’s motivation, the stronger a negotiating position you are in. For example, seller who must move quickly due to a job transfer may be amenable to a lower price with a speedy escrow. Other so-called “motivated sellers” include people going through a divorce or who have already purchased another home. Remember, that the listing price is what the seller would like to receive but is not necessarily what they will settle for. Before making an offer, check the recent sales prices of comparable homes in the neighborhood to see how the seller’s asking price stacks up.

Some experts discourage making deliberate low-ball offers. While such an offer can be presented, it can also sour the sale and discourage the seller from negotiating at all.

Do sellers have to disclose the terms of other offers?

Sellers are not legally obligated to disclose the terms of other offers to prospective buyers.

How do I prepare the house for sale?

First and foremost, put it in the best condition possible, especially if you are in a market with few buyers and lots of homes for sale. That means taking care of any major repairs that could deter a buyer (such as replacing any broken windows or replacing a leaky roof) if you can afford it. Next, work on your home’s curb appeal. Make sure your landscape is pristine. Mow the grass, clean up any debris and weed the garden beds. Plant a few annual flowers near the entrance or in pots to be placed by the door. Other quick fixes that don’t cost a lot of money but can help you get top dollar for your home:

Clean the windows and make sure the paint is not chipped or flaking.
Be sure that the doorbell works.
Clean and freshen up rooms, furnishings, floors, walls and ceilings. Make sure that bathrooms and kitchens are spotless.
Organize closets.
Make sure the basic appliances and fixtures work. Replace leaky faucets and frayed cords.
Eliminate the source of any bad smells, such as the kitty box. Use air freshener or bake a batch of cookies before your open house to ensure that the house smells inviting.
Invest in a couple of vases of fresh flowers to place around the house

Should I add on or buy a bigger home?

Consider these questions before making a choice between adding on to an existing home or moving up in the market to a bigger house:

  • How much money is available, either from cash reserves or through a home improvement loan, to remodel the current house?
  • How much additional space is required? Would the foundation support a second floor or does the lot have room to expand on the ground level?
  • What do local zoning and building ordinances permit?
  • How much equity already exists in the property?
  • Are there affordable properties for sale that would satisfy housing needs?

Ultimately, the decision should be based on individual needs, the extent of work involved and what will add the most value.

What do all of those real estate acronyms in ads mean?

If you find yourself stumbling over weird acronyms in a real estate listing, don’t be alarmed. There is method to the madness of this shorthand (which is mostly adopted by sellers to save money in advertising charges). Here are some abbreviations and the meaning of each, taken from a recent newspaper classified section:

  • assum. fin. — assumable financing
  • dk — deck
  • gar — garage (garden is usually abbreviated “gard”)
  • expansion pot’l — may be extra space on the lot, or possibly vertical potential for a top floor or room addition. Verify actual potential by checking local zoning restrictions prior to purchase.
  • fab pentrm — fabulous pentroom, a room on top, underneath the roof, that sometimes has views
  • * FDR — formal dining room (not the former president)
  • frplc, fplc, FP — fireplace
  • grmet kit — gourmet kitchen
  • HDW, HWF, Hdwd — hardwood floors
  • hi ceils — high ceilings
  • In-law potential — potential for a separate apartment. Sometimes, local zoning codes restrict rentals of such units so be sure the conversion is legal first.
  • large E-2 plan — this is one of several floor plans available in a specific building
  • lsd pkg. — leased parking area, may come with an additional cost
  • lo dues — find out just how low these homeowner’s dues are, and in comparison to what?
  • nr bst schls — near the best schools
  • pvt — private
  • pwdr rm — powder room, or half-bath
  • upr- upper floor
  • vw, vu, vws, vus — view(s)
  • Wow! — better check this one out.

Resources:

“Real Estate’s Ambiguous Language You Oughtta Understand,” Glennon H. Neubauer, Ethos Group Publishing, Diamond Bar, CA; 1993.

How long do bankruptcies and foreclosures stay on a credit report?

Bankruptcies and foreclosures can remain on a credit report for seven to 10 years. Some lenders will consider a borrower earlier if they have reestablished good credit. The circumstances surrounding the bankruptcy can also influence a lender’s decision. For example, if you went through a bankruptcy because your employer had financial difficulties, a lender may be more sympathetic. If, however, you went through bankruptcy because you overextended personal credit lines and lived beyond your means, the lender probably will be less inclined to be flexible.