PREPARING YOUR HOME FOR SALE
Preparation is crucial to maximize the sale price of your home. It also helps to insure a smooth and less stressful sale. Poorly prepared homes sell for substantially less money in all types of markets, weak or strong. By improving the showing condition of your home, you can greatly increase its ultimate sale price. Buying a home is a very emotional experience for most people. The homes that portray the most appealing lifestyle sell for the most money (which is why home developers “stage” model homes). Yes, the process takes some time, effort, and money, but many of our clients have told us after they have sold that it was much easier (and more fun!) than they anticipated.
The first step is for us to tour your home and develop a specific, written list of items that will add significantly more to the sale price than they will cost (i.e., they will be profitable). We'll consider repairs, “staging,” lighting, landscaping, and other minor upgrades. Many items require little or no cost, but can add thousands to the bottom line. Reducing clutter that hides interior space is a great example – it is never too early to start packing.
Tip: We generally do not recommend full-scale remodeling of kitchen and baths as it is costly, time consuming, inconvenient, and may not add more than the cost to the final sale price.
The next step is to consider using a “staging” designer to help determine which of your furnishings, artwork, and accessories should be used while marketing your home, and which should be removed. If you are moving before selling, the designer will completely stage your home to look its very best.
Tip: Many owners mistakenly think that an empty home sells for a higher price because it looks larger. However, an empty home can be perceived as stark, cold, and abandoned. A properly staged home is much warmer and more appealing.
Finally, and part of our service to you, is to obtain free bids from reliable tradespeople and contractors to complete the repairs and improvements. You can then develop a budget by prioritizing the tasks and including the most profitable items. The selected work can then be scheduled and the marketing phase planned.
To learn more about the preparation process, contact Jeff or Steve to receive our free "Comprehensive Staging Guide."
INSPECTION AND DISCLOSURES
The vast majority of real estate lawsuits in California involve homebuyers suing sellers regarding issues related to the condition of the property. Lack of proper disclosure is usually the basis of these lawsuits, which can be brought many years after a home sale closes. Before selling your home, you have the opportunity to build an effective “firewall of protection” from lawsuits by properly using professional inspections and the state-mandated seller’s disclosure documents. We will walk you through these forms and assist you in completing them.
Your home should be inspected by the right professionals (termite, roof, chimney, and general whole house) prior to going on the market. By “right” inspectors, we mean those who will do a thorough inspection, yet will not be inflammatory about what they find (trying to protect themselves from liability). Good inspectors carry adequate “errors and omissions” liability insurance and are financially strong enough to remain in business well into the future.
Tip: The cost of these inspections (typically ranging from $800 to $1000) can be paid out of your proceeds at closing.
Complete the necessary seller’s disclosures (required by the state) to continue to build your “firewall of protection.” A home seller is required to disclose all “significant defects” in the home or neighborhood.
Tip: Since there is no rule as to what is “significant” in every situation, disclosing small problems with your home that you feel are “insignificant” protects you and actually makes a prospective purchaser feel confident that you took the disclosure process seriously. Rarely does the disclosure of small items negatively affect the marketability or sale price of a home.
Fill out the disclosure forms correctly. Here are a few suggestions we tell our clients:
- If you are not completely certain of the answer to a disclosure question, “unknown” is a perfectly acceptable answer.
- There is no requirement that a seller investigate any issues or conditions of which they are uncertain.
- Avoid using descriptive adjectives to explain defects. If your description is inaccurate you could be liable to correct the condition. An example would be stating there are “small, normal, seasonal” cracks in the walls of the property. Simply state that there are cracks in the walls and let the inspectors and/or purchaser decide whether the cracks are a problem.
- We make certain that professional inspectors are referenced in the disclosures and copies of the reports are given to the buyer to read and approve (in writing). This eliminates the need to list in your disclosure what the inspectors found. It is too easy to inadvertently omit a finding if you attempt to list them.
If you would like us to arrange for an inspection of your home by one of our trusted inspectors, or would like us to forward their names, simply contact us.
MARKETING YOUR HOME FOR MAXIMUM EXPOSURE
How your home is marketed will have a tremendous impact on its final sale price. The goal of home marketing for us is to encourage multiple offers, which create an environment where potential purchasers are likely to offer the highest contract price and terms favorable to the seller. Our experience has proven the following method to be the most effective way to market your home.
Conducting a marketing “blitz” from the moment your home is placed on the market is the most effective way to accomplish maximum market exposure of your home. That is, all marketing materials and tools are employed immediately upon listing. This includes:
- All printed marketing materials are ready
- Listing on the Multiple Listing Service (MLS)
- Virtual Tour of your home on the Internet, with appropriate links
- Print advertising in all important newspapers
- Brokers’ Tour the first week on the market
- Open House the first weekend, with notices appearing in all the local papers
Don’t be in too much of a hurry. It’s important to wait a few days after the Open House before you review any offers. By then, more interested parties will have seen your home, increasing the likelihood of multiple offers.
We will report and analyze all showing activity so you can evaluate the market’s response to your home. Analysis will include the agents who:
- Previewed your home
- Showed the home to potential buyers
- Brought back a potential buyer for a second look
- Requested inspection reports and “disclosure package”
On a regular basis, we will update you regarding recent sales and new comparable listings on the market. As the “blitz” continues, this data will allow us to fine-tune the marketing approach, evaluate price-point, and more.
Avoid common marketing pitfalls which could potentially decrease the sale price of your home. Some of these pitfalls are:
- Advertising the home as “coming soon” before it is fully on the market
- Showing the home to potential buyers before the marketing “blitz”
- Advertising or mentioning in the MLS that the home is being sold “as is”
- Not listing a home that is for sale on the MLS
- Not allowing sufficient time on the market before reviewing offers
Contact us for a free copy of our extended article, “Costly Marketing and Negotiating Mistakes to Avoid.”
NEGOTIATING FOR MAXIMUM PROFIT
Negotiations are critical for you to receive the highest price and best terms. Once you have put in all the time, effort, and expense to properly prepare and market your home, the process of negotiation should be artfully managed in your favor. Sadly, most home sale negotiations are conducted in a simplistic manner, resulting in a lower sale price. We have developed the following tips and strategies to help you achieve optimum results when selling your home.
- Always allow the right amount of marketing days before reviewing offers
- Encourage all offers (even low-priced offers)
- Respond to all offers, counter-offering when necessary
- Always request up to 24 hours to respond to offers so you have negotiating flexibility
- Encourage, but do not demand up-front, that agents write “as-is” offers
- Allow “sharp offers” or “relative bids” to increase the final sale price
- Encourage, but do not demand up-front, that agents write “non-contingent” offers
- Do not offer credits (e.g. for carpeting) to the buyer up-front before offers are made
- Do not offer your “negotiating chips” (e.g. refrigerator, washer/dryer, etc.) up-front
- Carefully consider negotiating with two or more offers simultaneously
- Limit any mandated repairs required of the seller in the contract
- Write clear and unambiguous terms in any counter-offers so they are legally binding
- Tightly write the contract to increase the likelihood of closing escrow to nearly 100%
If you are thinking about selling your home, now is the best time to begin establishing your strategy and outlining a plan. We are here to help you with the level of professionalism you need to get the most out of your valuable asset. Contact us for more information on how we can make your next transaction profitable, convenient, and stress-free.
SELECTING A REALTOR WHO WILL MAXIMIZE YOUR PROFIT
It is extremely difficult to knowledgeably select any service professional (doctor, lawyer, accountant, etc.) as there are no objective “yardsticks” one can use to measure ability. Many Realtors look, act, and talk alike. Most are ethical and want to do a good job, however, their experience and skill level (and therefore, the value they can add to your home sale) varies dramatically. In order to hire a Realtor who will be able to maximize your home’s sale price, review the points and suggested questions below.
- How many years of experience does the agent have (you can verify at www.dre.ca.gov)? It’s risky to use anyone with less than five years of experience, or who has sold fewer than 50 homes.
- What special skills, education, or training does the agent bring to real estate? The purchase or sale of a home is becoming particularly complex.
- Does the agent work in real estate full-time? Most agents say they do, but we estimate that half or more do not work full-time in real estate.
- How many sales did the Realtor have during the last three years? Full-time agents should average at least 12 per year and be able to provide you with multiple listing printouts of their sales showing their name on it. However, an individual agent who does more than 25-30 transactions per year won’t have the time to personally work with you on your transaction, and will have to delegate many important activities to assistants who often are not Realtors. Quality of service tends to suffer.
- Have they ever been sued? Realtors, along with the home sellers they represent, are sued regularly by purchasers. Ask the agents how many times they have been sued (lawsuit, arbitration, or mediation), and to list two or three methods they use to minimize the chance that a legal action will result from your home sale.
Most Important: The difference between an agent who does “the basics” when selling your home and one who maximizes your profit is in the specific strategies the agent employs to leverage the process in your favor in each of the following areas:
- Preparing your home for sale
- Inspections and disclosures
- Marketing your home
- Negotiating the sale
- Managing the escrow
If you are considering selling your home, please contact us for our expert, up-to-the-minute, and comprehensive advice.
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