What you should expect?
In today's market, the 2nd half of 2016, you should expect a perfectly priced house to have a contract in approximately 30 days or less.
You should expect a lot of lookers (or showings) in the first 2 weeks, after which, it will slow down. That is why, the day your home goes on the market, it should not be "almost ready". It should be perfectly ready.
You should expect to get around 97% of the price at which it is originally listed.
You should expect to close approximately 6 weeks after the contract.
You should expect to "assist with closing costs", basically meaning that the Buyer typically needs to hold on to some cash and will ask for you to pay part of the closing costs - very typical and very normal. (The amount, if any, is negotiable).
You should expect to have repairs requested after the Buyer has the home inspected. (Repairs are negotiable.)
If you have any Liens on your property, you should expect to have problems unless you have the Liens cleaared.
What you shouldn't expect
You shouldn't expect a perfect inspection. It has never happened. There will always be something in need of repair. Therefore, try to take care of all those maintenance items that you already know about, before you put the home on the market.
You shouldn't be expected to lower the price unless:
- You determined, erroneously, that the house was worth more than the Agent determined it is worth. And the Agent acquiesced and listed at the price you wanted. (This is a bit of an art, not just going to Zillow or picking out 3 recently sold comps.)
- Something significant happens in the financial world. (From experience, in February of 2007, this happened and prices stalled and then dropped dramatically).
- The Agent told you it was worth more than it really was so he/she would get the Listing. Basically they overpriced it so you would think they could get you a better deal than the market offered at the time.
- You agreed to a Pricing Decrease Strategy offered by the Agent. That basically confirms that the Agent had no clue and was going to schedule price decreases (as often as weekly, and as much as $10,000 or more) until the house sold - possibly way below its actual value.
- Additional comparable homes in your area sell at lowball prices while you are on the market. Those other sales always have a negative impact on the value of your home.
You shouldn't expect delays in the process. There are multiple significant dates along the way to Closing, including Financing Contingency expiration date, Due Diligence Period end date, and others. But they may occur and frequently it's a matter of your flexibility, on your part, if you want to continue with the buyer.
Step 1 - What's your timing?
If you have the luxury of selling at any time or no particular time then think of putting your home on the market in early Spring. In Atlanta, February and March are prior to the Spring Rush and you have less competition. Then, there is an incredible rush for the Buyers to be in their new house before school starts. So the next best window to put your home on the market is a week prior to or a week after June 1, so you can close before the start of school. Finally, people want to be settled in their new home by Thanksgiving or Christmas. Think of putting your home on the market at the end of September.
If you have no choice in when to move and you're timing doesn't coincide with the best times above, just expect your home to on the market a little longer (because there may not be as many Buyers in January as there are in May!)
Step 2 - What needs to be done before Listing?
Your best bet is to get a Real Estate Agent over to the house to get their perspective, basically because we visit a tremendous number of houses and we can help with staging thoughts and typical repair thoughts.
Then get on the maintenance. On a different page I have listed EVERY standard item you should look at prior to putting your home on the market. If you don't address them, the inspector will. It's lengthy, but as complete as I could make it - and it continues to expand... go to Preparing Your Home For Sale.
Step 3 - Ready to List? - Now What?
You will have some paperwork to take care of with your Real Estate Agent.
Exclusive Broker Agreement: This document establishes the fact that now have an agreement with a single Brokerage, for a finite period of time, to sell your home at a price agreed upon, and for a certain Commission. (Your agreement is actually with the Broker, not the Agent, who is an Independent Contractor.) This is a standard agreement.
Property Disclosure: This form can not be filled out by the Agent, even if he/she knows every single answer. This MUST be filled out by you, personally. The form describes the condition of the house as the items are known to the Seller. DO NOT falsify this information. It can easily come back to haunt you!
Other Disclosure Agreements: Many Brokers have a relationship with Lenders, Attorneys, or others. Those relationships must be disclosed. You needn't use these people, but you must be made aware of the realtionship.
Step 4 - Setting the Listing Price
There is an old saying that setting the right price is 80% of the Marketing.
Even though that may be true, why then are there more Price Reductions on a daily basis than there are New Listings? Is it because nobody knows how to properly Price a home anymore? And they simply pick a number that's similar to other home sales in the neighborhood?
Pricing actually is rocket science in the sense that it requires a tremendous amount of data, a tremendous amount of research and manipulation of that data, and an attempt to understand WHY comparable homes sold at the price they did, not simply understanding THAT they sold at the price they did.
Because it's a very complex discussion on how to properly set a price, I had to set up a separate page to go through the machinations of how a price should be properly set. Including how NOT to set a price!
This is your home and your investment and your equity. Don't allow anyone to minimize what you deserve!
Please click here for the discussion on "Setting a Price".
Step 5 - The Listing is Almost Ready to Go LIVE!
The process of Listing is mostly mechanical. There are fundamental facts about the house: Number of Bedrooms (pull-down menu), Number of Full Baths (pull-down menu), Direction the House Faces (pull-down menu), Basement or Slab or Finished, or not (pull-down menu). Those are easy and should NEVER be in error.
Then there is the opportunity to actually Market the house. Other than the fundamental facts, the Agent has only the home description and the photos as their marketing tool. The home description is a free form narrative of approximately 500 characters which should entice a potential buyer to want to see the house. (Incidentally, is should be no surprise that there should be no spelling mistakes, it should be grammatically perfect, and its entire purpose is to entice people and present or brag about those elements or features that actually support the price of the house.)
Then there is the narrative on the Directions to the house. Here is where the Agent has the opportunity to start a negatie impression by directing the Buyer or Buyers Agent off the Interstate, over the railroad track, and past the landfill. Or, reroute them past the equestrian farms and the beautiful scenary. (Oh, and the directions should be correct!)
Photos! It doesn't matter who takes the pictures as long as the pictures are good, bright, and fit the framesize offered. If you don't like what you see with your listing, before it goes live, have the pictures re-done by the Agent - until you are pleased. Also, every single picture (our Listing Service enables 25 pictures) should have a description of what it is that you are looking at. (The default caption is "Exterior Front", which usually doesn't apply well to the picture of the commode!).
90% of Listings have errors (street name spelled incorrectly) or omissions (forgot to mention pool in the neighborhood) or gramatical errors (rampant!!!) or incorrect information (wrong schools, incorrect yearly taxes), etc. Please check your Agent's work totally! Do not make an assumption that your Agent was 100% correct. Frequently, the Listing information is filled in by someone who has never been to the house, doesn't know the house or the neighborhood, and is assumed to be correct.
Step 6 - The Listing Goes Live
Instantly, your home is being looked at all over the globe! Amazing! That's also why it had better be right the first time.
People have had "saved searches" waiting for a home with your price range and your amenities to come on the market and they are notified instantly. That is why there will be so many people looking in the first week or weeks. That's why the pricing is so critical and the preparation is crucial.
Agents want to Bring Their Buyers to See the House.
Although it is your choice, I don't like Agents or Buyers inside my Listings unless they have first spoken with me. (For a vacant house, some of these rules change). If they want to see the house, they can give me a call! I don't like surprises, and you don't need them!
I want you to be fully prepared to allow the house to be shown with a 15 minute warning. You know the story - beds made, dishes in the dishwasher, clothes off the floor, toys scooped up and put in a laundry basket and moved to the garage, etc.
If you want only me to show the house, that's easy to arrange. Would you rather I, who knows all about the house and the neighborhood, to show it or an Agent who has never seen it before and who knows little about what you have done and what the neighborhood is like?
There should be a sign out front that your home is "For Sale". This picks up people in the neighborhood who aren't looking but know someone who might be. And it picks up "drive-bys" who can call to request your Agent to schedule a showing.
You should have a Lockbox, with a working key, so Agents can bring the Buyers inside, but no one else - not even an inactive Agent can get in.
During the showing, you should not be present. Some Sellers prefer to walk or drive around the neighborhood during
the showing. If the showing is done in 10 minutes, they probabbly didn't like what they saw. If it goes for 45 minutes, they might well be interested.
Step 7 - An Offer Comes from a Buyers Agent
Every single offer that your Agent receives MUST be presented to you and it must be a written offer.
The offer will come with a time limit. (Generally 24 or 48 hours).
With every offer, you have a choice to "Accept" the offer as is, "Counter the offer" with terms that you prefer, or simply "Decline the offer". (Not responding to the offer by the "time limit" specified in the offer is the same as declining the offer.)
There are several variables in an offer: Offering Price, Seller's contribution to the Buyer's Closing Costs, Date of Closing, Amount of Earnest Money Buyer is putting down, Due Diligence Period duration. ALL Items are negotiable and will be negotiated on paper.
Step 8 - An Offer is Accepted
After negotiating back and forth, finally we get an offer that is amenable to you, the Seller, and to the Buyer.
Typically, the first thing the Buyer will do is set up an inspection of the property as soon as possible, almost always by a Certified Inspector. The Inspector is being paid several hundred dollars to find every problem there is with the house, so don't be surprised if there is a long list of items to be repaired, when the report comes back.
Meanwhile, the clock is ticking. The inspection is held during the Due Diligence Period, a period of time after the contract was signed. During the Due Diligence Period the Buyer can back out of, or Terminate the contract for any reason or no particular reason. The Due Diligence can be 10 days, 2 weeks, even 3 weeks if requested and accepted. It's variable, and you are essentially off the market during that period.
Your Agent will probably receive a copy of the Inspector's report.
After the Buyer's Agent sees the report, the Agent and the Buyers will discuss what items on the repair list should be repaired by the Seller. There is a bit of a psychology here in that if they ask for every minute detail or flaw from the report to be repaired by the Seller, the Seller might simply say "NO - We're not doing this and this and this".
These repair requests, not to be confused with the Inspection Report, come on a written form which is essentially a "Request to do Repairs". Similar to the original offer, this is equally as negotiable. It is also a possibility that one or the other can lose the deal because they pushed too hard. As a Seller, you need to recognize that if you lose this Buyer, the next one will have an inspection and probably request the same repairs.
Some Buyers will want the house so much that they will only ask for significant needed repairs, or they may even take it "as is".
(Not all repairs need to be done before the end of the Due Diligence Period. They need to be done prior to the Closing so that they can be inspected, during a walkthrough, to see if they were completed properly.)
Repairs have been successfully negotiated before the end of the Due Diligence Period. (The Due Diligence Period can be extended if needed through an Amendment to the contract).
We are probably going to Close - but not a 100% guarantee.
Step 9 - Heading toward the Closing
From the time of the Due Diligence Period ending, up until the Closing, you as the Seller are now responsible for 2 items: fulfilling the requests from the Request for Repair list, and ensuring that you are completely out of your home at the time it Closes.
Regarding the Request for Repairs, usually the request specifies the repairs are to be done by a professional. But use your common sense. It doesn't take a licensed electrician to put a face plate on or to change a light bulb. On the other hand, if you can't handle it yourself, absoutely get a professional and get a receipt for any work done.
Ensuring you get out of the house on time is critical. If you know beforehand that you won't be able to move by the Closing Date, it's permissable to request you remain until a day or three after the Closing. That requires either an Amendment to the contract or should have been negotiated as part of the original contract. However, the Buyers logistics may make it impossible for them to NOT move in on Closing Day.
The house should be "broom clean". Nail holes should be repaired where there were pictures hung.
Actually, leave the house as you would like it to be if you were buying it.
Step 10 - Closing
While you have been taking care of your responsibilities and your Agent is taking care of his responsibilities (including communicating with the Closing Attorney, the Lender, the repair folks who need access to your house if you're not home, warranty people, pest people, and others), the Buyer should also be taking care of their responsibilities.
The Buyers' responsibility is to ensure that they get the Loan and that they get it on time.
Assuming all goes as planned, including the Attorney's information sheet has been sent to us, we should have a hassle-free, non-contentious Closing. (In 12 years I have NEVER had a contentious Closing, although someone tried to make a demand at the final moment. They found out quickly that we weren't stupid and their bluff was unwarranted - plus it would have cost them significant amounts of money.)
Congratulations, we have successfully Sold Your Home - together!