What Mike Does for Sellers
back to Let’s Get Started
If you are interested in selling your home, let me explain some of the steps involved and what I will do for you.
Finding an Agent
The first thing you need to do if you are selling your home is to find an agent that you can trust. You might want to interview a few agents to find the best fit. I recommend selecting an agent with as many credentials as possible. Choosing an agent with multiple credentials ensures they have a good understanding of the buying and selling processes, how to negotiate, how to market your home, etc.
In terms of my credentials, I am a licensed Realtor and Broker, member of the National Association of Realtors, and a graduate and active member of the Graduate Real Estate Institute (GRI). Locally, I am a member of the Indianapolis Metropolitan Board of Realtors (MIBOR). I am also a certified real estate specialist (CRS) and belong to both the state and national organizations. I have a Bachelor of Science degree in Business from Southern Methodist University (SMU) in Dallas.
Determining Your Home’s Value
The most important step in selling your home is pricing it correctly. It is also very difficult because it involves emotions about your home. Before I explain how to price correctly, let me try to dispel a few myths. The value of your home isn’t necessarily what you think it is worth. The value is what a buyer will pay for your home. Unfortunately, it may not be what you paid for your home, nor may it be what you paid plus any upgrades or home improvements.
The best pricing method is a comparative market analysis (CMA). When I conduct a CMA, I will look at current and pending listings plus recent sales in your market area. The recent sales are very important because it reflects the most current price buyers are willing to pay. When conducting the CMA, it’s important that I look at comparable properties. For example, you should not compare a one-level home to a two-level home.
Determining Your Home’s List Price
After determining your home’s value, it’s time to set a list price. Obviously, the list price should be close to the value established by the CMA.
The homes that sell in the shortest period of time always have three characteristics. They are:
a.) Well maintained (inside and out),
b.) Have curb appeal, and
c.) Are listed at the right price.
When listing your home, you must decide if you want to put your house on the market or do you want to be in the market. What does this mean? If your home is on the market, it is simply for sale. If it is in the market, it means your home shows well and is at or near the bottom of the price range for similar homes. In other words, they are listed at the right price and will likely sell quickly.
A good rule of thumb says that if you have your home listed for 30 days and you do not have at least 12 showings, you are probably priced too high. Additionally, if you have 12 showings in 30 days and no offers, you are probably priced too high.
Now that we have determined a list price, I want you to understand what you will net from the sale of your home. In other words, how much cash will your receive from the sale or (in a worse case scenario) how much you will have to pay at the closing.
I will use a seller’s sheet to show you what you can expect beginning with the likely sales price and subtract from that number the following:
- Outstanding mortgage(s) and/or home equity loan(s)
- Property taxes due up to the date of closing
- Brokerage costs for both agents
- Title insurance
- Closing cost
- Interest due
- Other miscellaneous costs (such as recording, survey, transfer fees)
The result is your net.
The Listing Contract
The next step is the listing contract. The listing contract is a four-page document that includes the name(s) of the seller, the listing broker (not the salesperson, but usually the principal or managing principal of the listing agency), the street address and legal address, the list price, what is included and/or excluded with the home (e.g. refrigerators, washer, dryer), authorization for a lock box on your front door, date of the listing contract and expiration date, type of financing acceptable to seller, a statement of agency disclosure*, fair housing regulations, additional provisions and future conditions. This document is then signed by the seller(s), the salesperson (the Realtor) and the principal or managing broker.
*Note: In Indiana, an agency may represent both buyer and seller but must disclose this to the seller and buyer. This is called a dual agency or a limited agency.
Choosing a Title Company
Next, you need to select a title company and pay for title insurance. You should ultimately pick the title company you would like to use, but I will be happy to help you find a legitimate, reputable title company. In Indiana, attorneys are seldom used for a residential real estate closing as most title companies have an attorney on staff.
Marketing Your Home
After the listing contract is signed, I will go to work for you immediately. I will place a “For Sale” sign and a property flyer box in your yard. I will also place a secure lock on your door that has the ability to monitor who is allowed in your home and keeps a record of anyone getting the key out of the lockbox.
I will hire a professional to take photographs of your home and to create a virtual tour. These pictures and virtual tours will go on hundreds of web sites. It is especially important that they appear on MIBOR.com and REALTOR.com.
I work with a company called Showing Solutions to set up scheduled showings of your home. Showing solutions will give you direct feedback on any showing that you have if the showing agent fills out the requested information. If the showing agent does not fill out the requested information, I will contact them and try to obtain some feedback. As a seller, you should know that many agents do not provide feedback and any agent who says they can collect feedback on 100% of all showings is likely fabricating the feedback.
Another marketing tactic is to hold an open house. Some buyers want open houses while others do not. My position is this: if you want an open house you will have a open house!
People often ask me how productive are open houses? Statistics show that 10% of homes are sold though open houses. Open houses are a great way for Realtors to meet people who are looking for a new home. So if you’re my client, the decision is yours.
Since I represent both buyers and sellers, I will also show your home to my clients who are looking for a home, but only if the home measures up to their search criteria and price range.
Negotiating and Accepting Offers
Congratulations! You just received an offer on your home. I will let you know if any offers are made on your home regardless of the strength of the offer.
My recommendation with first offers is always the same – either accept the offer or make a counter offer. As a certified negotiation specialist, I believe that you should never simply reject an offer. Some buyers just want to test the water and I do the same thing for my buyer clients all the time. I will certainly help you sort out the offer and the best way to counter; however, only you can set the price. You are my boss.
The Home Inspection
After both parties have agreed to purchase terms, the buyer will likely order an independent home inspection. The buyer is responsible for paying for this service. The buyer will then respond to the inspection with the items they would like to have repaired or replaced.
Home inspections are very difficult because most inspectors point out every minor detail and it is sometimes worded in such a way as to sound worse than reality. Again, as a certified negotiation specialist, I will help you through this process. I will help you sort though what you should repair, replace or leave as is. As the seller, you should be aware and prepared to deal with major defects only. Major defects are something that makes the home inhabitable or a liability. Safety, environmental, electrical, plumbing, and roof issues are usually considered major defects.
Other Details and the Closing
The day before the closing we will receive the HUD statement, which will include the buyer and seller’s costs and the money due at time of closing. I will review those numbers with you to make sure you understand the numbers. I hold an accounting degree and you can be confident that I’ll review these details carefully.
The final numbers should be reconciled with the net sheet that you were given at the time of the listing contract. I feel very strongly that my clients understand both the net sheet and the HUD and why a difference exists.
I will remind you to contact the utility companies and to have those services turned off as of the day of the closing.
Finally, I will be at the closing to make sure you understand the process, the paperwork involved, and that you receive the proper money from the sale. Don’t forget to bring the keys!
My goal is to help you sell your home quickly at a fair market price. I also want to make sure that no surprises arise at the last minute.