It’s known that the home buying process comes with many frequently asked questions and the home selling process is no different. Whether you have never sold a home or have sold half a dozen, there are many questions that come with the process. Since selling a home isn’t a process that is practiced regularly by home owners it is necessary to understand that rules, regulations and the real estate industry change on a daily basis making the process much more challenging.
The top frequently asked questions from home sellers begin to accumulate before even starting the home selling process. If you’re going to be selling your home, it’s suggested you are prepared and have a strong understanding of the process. Many times, the best way to understand the process and be well-prepared is by asking questions.
The importance of knowing how to interview a Realtor when selling a home certainly cannot be overlooked. A top Realtor should be able to reduce the amount of questions a home seller will have when selling a home because they will address many of these frequently asked questions before they become a question.
So what are the most frequently asked questions from home sellers? Here are the top frequently asked questions that home sellers ask before listing a home for sale, questions relating to home value & pricing, questions relating to contracts and questions relating to purchase offers.
FAQ for Sellers
This frequently asked question cannot be answered with a simple or general answer. Every real estate market is different, therefore the best time to sell a home will be different from real estate community to real estate community. The answer might depend on weather, your geographic location, the beginning and end of the school year and other factors. For anyone whose company is transferring or relocating them, the time of year for selling a home really doesn’t matter. The company dictates the time to sell and buy your next house. Prior to becoming a Realtor, like most folks, I might have declared May, June, July as the best times to sell a home. Based on my experience as a Realtor in Georgia, I’ve revised my thoughts on this subject. Consider the fact that spring months vary by states. In New England or Ohio for example, spring is April, May and June. In Georgia, however, the spring selling season begins in late January or early February. Since every home seller situation is different, you should discuss the timing of your home sale with your Realtor. In some cases, selling a home during the fall and winter months may be better than waiting until the spring real estate market. This is due to a combination of many factors including lower competition and that serious buyers are always looking for a home. If I were going to sell my home – ideally, I’d want to be on the market when no one else is and there is little to no competition.
A frequently asked question from home sellers before they list their home for sale is related to the local real estate market. There are many market indicators that a top producing Realtor should be able to share with you to help explain the condition of the local real estate market. One of the most important indicators on market conditions is average days on market. The average days on market can indicate to a seller how quickly homes are selling when listed for sale.
Other examples of market condition indicators that a top producing Realtor will provide a home seller before listing their home include market absorption rates, number of closed transactions year over year for a given month, average sale prices and sold price to original list price ratios.
There are several things you need to know before listing your home for sale! A frequently asked question from home sellers before listing is what steps should be taken before listing their home. Not properly preparing a home for sale can put a home owner at a huge disadvantage.
The expression “You never get a second chance to make a first impression” is absolutely true and can’t be stressed enough when it comes to selling a home. When selling a home, you must be sure that your home presents itself in the very best possible light. Making sure clutter is at a minimum, freshly painting rooms, installing new carpeting/flooring, or ensuring odors are non-existent or replacing the roof, hot-water heater, HVAC system, broken seals in windows as needed are just a handful of things that should be done before listing your home for sale.
When selling a home, it’s important you disclose to potential buyers anything you are aware of in your home. Nobody likes “getting the raw end of a deal” when it comes to buying a home, car or anything for that matter. If you’re aware of defects with a roof, appliance, or home in general, you’re always going to be better off being honest and upfront. If you’re aware of defects, whenever possible, fixing them before going on the market is always best advice. This can avoid potential issues and/or lawsuits once your home is under contract, after inspections, and even years after you have sold your home.
Most home owners want to know how much their home is worth. This frequently asked question is another one that cannot be answered with a general answer. One of the best perks to owning a home is the ability to make it your own and improve it how you’d like to live and for your own enjoyment. The simple answer is that your home is worth what a ready, willing and able buyer is willing to pay for it and will it appraise for the agreed upon sales price. After you’ve improved your home will an appraiser see the value in the improvements you’ve made? This is a slippery slope and again not easily answered. Finding out how much your home is worth is not something that should be done without asking a top local Realtor for guidance.
Assessed value is not the same as market value or appraised value. There are many homes that could be sold for significantly more than an assessed value and others that maybe sold for significantly less. The assessed value of a home is used for the purpose of taxes in your community or county. The assessed value of a home is multiplied by the local tax rate to determine what your yearly taxes are. The assessed value has no impact on how much your home is worth to a potential buyer in the marketplace.
Unfortunately, there are many home buyers who believe a home that is listed higher than the assessed value is overpriced. This is the furthest from the truth. Home buyer’s also question if something is wrong with a home if the list price is much less than the assessed value. The bottom line is the assessed value has no impact on how much your home is worth. There are home owners who don’t pay attention to their assessed value, just to find out their municipality or county has been slowly raising it, year after year, even though the market value hasn’t been increasing. Ask your Realtor to share your county tax record with you and use it to help to open a dialogue between you regarding your home and it’s value.
The list price is the price a home is currently listed at for sale. The sale price is the price a home is ultimately sold at. A top Realtor should be able to suggest a list price that ends up being your sales price too or very close to your final sale price.
There are a handful of methods that Realtors use to determine the value of a home. The most common method to determining the value of a home is by completing a comparative or comparable market analysis (CMA). A competitive market analysis is an in-depth evaluation of recently sold comparable homes in the last 180 days. A CMA isn’t a crystal ball that determines what a home will sell for, however, if performed by a top Realtor, it should greatly narrow the sale price range.
A professionally completed “CMA” will consider many features of not only a home, but also the local area and neighborhood which may include the sub-division, zip code and / or school district too.
Considerations that a professionally completed CMA include but are not limited to are as follows:
- Square Footage
- Number of Bedrooms
- Number of Bathrooms
- Upgrades to Kitchen
- Window Quality
- Roof Age
- Lot Features
- Location; primary or neighborhood street?
- Style of residence
- Flooring type
- Basement Or Slab
- Finished or non-finished basement
The answer to this frequently asked question is NO! Anyone who has bought a home, sold a home, or just looked at homes, has heard of websites such as Zillow, Trulia and Realtor.com. These are also commonly referred to as third party real estate websites. Third party real estate websites are not local to every real estate market.
These third-party real estate websites provide estimates of home values for practically any home in the United States. How is it possible that a third-party website that is headquartered in California or Florida can provide an accurate home value for a home located in the Atlanta, GA area? It’s not! These third-party websites use computer generated home values based on calculations and formulas.
These websites providing inaccurate estimates (or “Zestimates”) can create a false sense of hope and lead to frustration. A home seller who is told their home is worth $20,000 less than the online estimate is going to be understandably upset. It’s critical that when selling a home, the value is determined by a top Realtor in your local area, not an internet website!
This frequently asked question often leads to a common pricing mistake by sellers. Many sellers believe they should price their home $5,000 higher than what a top Realtor suggests to leave room for negotiations and low-ball offers. A well-priced home will sell quickly and will sell for close to listing price, at listing price or higher if you are priced competitively to yield multiple offers. There is no need to leave room for negotiations, as todays home buyers are very well educated. By the time they get to your house, they may have even lost a house or two by not offering full price. A seller who prices their home high to leave room for negotiations can actually be costing themselves more money than if they price it correctly to reflect the suggested market value.
Most of the frequently asked questions that relate to Exclusive Right to Sell contracts are not able to be answered with a universal answer. When it comes to the length of the listing agreement, every real estate agent will have a different preferred length. One thing to keep in mind when asking about the length of a listing agreement is the average days on the market. If the average days on the market in your local real estate market are 75, a 90-day listing agreement may not be enough.
Commission is negotiable, period. Don’t let any Realtor tell you otherwise.
That being said, as the saying goes “you get what you pay for,” often is true when it comes to real estate. In Georgia, the commission rate is typically 6-7%. The commission is split evenly between the listing and selling brokerages. The agents do not receive their commissions until their brokerages, and the MLS’s are paid. So, the individual agents who sell your house, do not receive the entire commission split.
Consider this: If a Realtor accepts a lower commission, do you think they will negotiate aggressively on your behalf when it comes to the price? Also, if you were working for a reduced hourly wage from your “normal,” would you work as hard as you would normally? The answer is likely not.
Sellers need to understand that the Realtor who lists your home for sale – is the “listing and marketing agent” in the transaction. That agent has a lot of upfront costs involved in marketing your home to yield appropriate buyers. If that agent has no money to ultimately pay these expenses – your house won’t sell. Additionally, selling agents – the agents representing buyers — won’t show your house if the commission is less than the house for sale down the street. Choosing a Realtor based solely on the fact they accept the lowest commission amount is a top mistake made by home sellers when choosing a Realtor to sell their home.
When selling a home, it’s best to think of any decision as a business decision rather than an emotional one. Low-ball offers still happen occasionally. Dealing with low-ball offers can sometimes lead to the sale of a home, if handled properly. The worse decision you can make if you receive a low-ball offer is not responding. Some home owners are so upset they decide they do not want to respond to a low-ball offer, which ultimately ends any potential chance for a deal. A counter offer, even if it’s close to the list price, is often better than letting a potential buyer walk away from the deal. Every situation is unique. Your Realtor can help you through this circumstance.
Depending on what type of financing the potential purchaser is obtaining, the option to receive seller concessions may or may not exist. There are many home buyer’s in the marketplace with impeccable credit scores and solid jobs but are short on the money required to purchase a home. Seller concessions allow a home owner to contribute a percentage or dollar amount towards a buyer’s closing costs and/or pre-paid items. For example, a buyer who qualifies for an FHA mortgage can receive up to 6% of their purchase price towards their closing costs. This can be significant amount of money and can be the difference of a buyer being able to afford a home or not or the seller being able to sell their home!
If a home buyer is obtaining financing from a bank, mortgage company or financial institution, the lender will complete an appraisal. When performing an appraisal, the appraiser is looking for potential safety hazards or concerns. The buyer will determine in their purchase offer a dollar amount in which a seller is responsible to cover for bank required repairs. Some common bank required repairs include but are not limited to missing handrails, broken windows, peeling paint, missing electrical covers, and roofs that are in very poor condition.