BEFORE YOU SELL: The first step you take when putting your home on the market is establishing price. A professional market analysis can help you determine what the property is worth. Contact a Realtor who is familiar with your area to get prices for the homes that are for sale and see how long they have been on the market. Your Realtor will be able to provide you with information about the actual sale prices of homes that are similar to yours. He or she can also tell you about the features that influence the value of each property, such as number of rooms, wall-to-wall carpeting, etc. You can establish a market value for your home by putting all of this information together. If you price your home within 5% of the established market value, it should sell quickly.
FINDING A BUYER: Selling a home is one of the most complex transactions that most people are ever involved in. Finding a buyer is often the easy part! When you find someone who wants your home and who has the money to buy it, it is still a long way to the closing table. You must first negotiate a purchase contract that covers the price and all the terms of the agreement. How much of a deposit will the buyers put down? When and how will the transfer of title occur? Under what conditions can either the buyer or seller back out of the contract? There should always be a complete home inspection. Having a good agent to handle the details after the home inspection can make the difference in a successful transaction or a failure. The buyer must obtain financing, and the lender's appraiser will have to agree with the sale price. When clear title has been established, you can sign all the necessary papers to finalize the sale.
HOUSE HUNTING TIPS: You have just spent the entire day looking at homes, and now they have all become a blur! You saw so much that you couldn’t remember anything! Realtors have developed little tricks to help them remember thousands of properties they see. Carry a notebook with you when you are house hunting, and give each house its own page. At the top of the page note the address and price. Write down the exterior construction, style and color as well as the color of the living room carpet and walls and any other major feature that will jog your memory later. These notes will enable you to recap the day and give your Realtor important feedback that can speed up your search for the perfect home.
FAIR MARKET VALUES: What is the best price for a piece of real estate? Mortgage lenders, appraisers and real estate brokers use what is called the "fair market value" (FMV). FMV has been defined as "the price that a buyer is willing to pay and the seller is willing to accept, when both parties are knowledgeable about a property & neither is under any time pressure to buy or sell". Sounds great, but how is this price determined? The starting point for determining a fair price may be an opinion of the value or "competitive market analysis". Such an analysis uses information on similar properties which are: 1)currently for sale, 2) already sold or 3) expired properties (those which did not sell). Local, national and international trends and market conditions must also be evaluated. By comparing similar properties in each of the three categories and the market conditions, appraisers, lenders and agents come very close to the maximum price that buyers would be willing to pay for a house.
TAX IMPLICATIONS: Most of our sellers make a profit when selling their homes. They often have questions about how capital gains tax will impact them. If you are selling your primary residence, you do not have to worry about paying taxes on your profits if your gain does not exceed $250,000 as a single taxpayer (or $500,000 as a married couple filing jointly). This new tax law comes from The Taxpayer Relief Act passed in August of 1997. Regardless of your age, you are now free to roll from none to all of your gain into another home without further tax consequences. Different rules apply when you sell income property. If you sell one property then purchase another, the taxes will be due for the year the sale occurred. On the other hand, if you arrange to exchange one investment property for another, you can defer the capital gains tax. To ensure complete tax deferment, you must acquire a replacement property that is equal to or greater in price than your exchange property, and move all of your equity from the old property into the new. It is not as complicated as it sounds, but you do need professional help. Whatever the case may be, always consult a CPA or attorney when questions of taxation arise.
MARKETING YOUR HOME:
1. Submit your home to the Multiple Listing Service.
2. Promote your home at the real estate board meetings for maximum exposure to other agents in the area.
3. Develop a list of features and benefits of your home for the cooperating agents to use with their potential buyers.
4. Send flyers to top cooperating agents in area.
5. Suggest and advise you on any changes you may want to make on the property to make it even more marketable to the buyer.
6. Constantly update you as to any changes in the market, both in prices and changes in the money market, and to their effects on the sale of your property.
7. Contact 50 homes in the surrounding area either in person or by mail.
8. Add additional exposure through a professional sign and lock box.
9. Add additional exposure through the use of flyer boxes.
10. Add additional exposure through advertising in newspapers.
11. Add additional exposure through the real estate agent’s website.
12. Hold open house when possible.
13. Advertise additionally when necessary.
14. Pre-qualify when possible all prospective buyers.
15. Make you aware of all various methods of financing the buyers may want to use.
16. Provide, on a monthly basis to the cooperating brokers, a list of features and benefits of your home.
17. Assist you in arranging interim financing if necessary.
18. Follow-up on all sales people who have shown your home for their feedback.
19. Deliver a copy of your Multiple Listing for your approval, also a copy of all advertising that has been published.
20. Represent you on the presentation of all contracts by cooperating brokers and help negotiate the best possible price and terms
21. Handle follow-up and keep you informed, after the contract has been accepted, on all mortgage, title and other closing
22. Deliver your check at the closing.
To request a Closing Protection Letter on behalf of a lender for a pending transaction, click here and complete the form.
Please note that underwriting approval may be required before the CPL is issued. Please contact your Title Officer with any questions.