Selling My House
A lot of thought goes into the decision of selling a house. It’s an exciting time. It is also a stressful time. Is now the right time to sell? How much money will I walk away with? Will I be able to find another place to live?
My goal is to equip you with facts. The more awareness you have, the better prepared you will be to anticipate what’s on the horizon and know what to expect each step along the way.
While I have been a Real Estate Professional for decades, there is no way I can anticipate every question you might have. My goal is to give you an overview of the basic process. Hopefully it will inspire more questions for you to gain complete confidence in the proceedings and the decision you’re about to make.
Real Estate is a passion for me. It is my desire to impart knowledge in a patient manner. (I have five daughters. I’ve learned patience over the years.) Whether this is your first home sale, your first Colorado home sale, or you’re an old pro, I want to take you from overwhelmed to empowered.
If this overview leads to a better understanding of the process, that’s great. It is my hope it leads to more questions. I’m here to help. Take a deep breath and come join me on this fun, crazy, stressful yet incredibly rewarding journey. We’ve got this!
Do I Need a Realtor When Selling A House?
The purpose of this article is not to discuss the pros and cons of a Realtor. Currently, even though it is a hot market, I have never seen a more difficult market. I have done this job most days for decades. There is confidence in what I know and how I perform my services as a Professional. Having said that, I still learn something new every week.
In another post we can discuss the pros and cons if you’re thinking of selling a house as an Unrepresented Seller. Even the owner of ForSaleByOwner.com used the services of a Realtor when it came time to sell his personal residence. He was able to net $150,000 more than what he was asking when he tried to sell it For Sale by Owner. That is a separate discussion.
For the purpose of this post, we will discuss what goes in to selling your home. But rest assured, statistics say Sellers average twenty-percent more when a professional Realtor is involved.
Before your first meeting with a Realtor, they should put time into getting ready for your initial listing consultation. From verifying City and Tax Records, finding previous sales, doing a thorough Market Analysis, and preparing documentation. This process generally takes several hours before we even meet with prospective Clients.
A competent Realtor will verify who owns the property, its legal zoning. They should pull a Market Analysis on what’s Active, Sold, Pending, Withdrawn, Expired, and Cancelled in your area in the past six months to a year. This is so they have a good perspective of what is happening in selling a house in your immediate neighborhood.
Part of that research for selling a house will include the Average Days on Market for a home of your type, condition, and location. The Realtor may prepare the necessary paperwork in case you decide to list.
There will be multiple documents a prospective Seller will need to share with a prospective Buyer. The Realtor my initiate those forms for you prior to your first meeting.
Those will include a Seller’s Property Disclosure which will inform the Buyer of any material defects you know about the house. This is not something to worry about. Buyers are more ‘forgiving’ if they know upfront what might be a problem than if they find out after the fact.
If a house was built prior to 1978, a Lead-Based-Paint Disclosure will be required by Federal Law. There will be a Square Footage Disclosure, Closing Instructions, the actual Listing Agreement between Seller and Realtor. Other disclosures may be necessary to legally sell your home in Colorado.
All of this is easy and nothing to be afraid of while selling a home, but it’s good to know up front that paperwork will be a necessity.
Hiring a Realtor
When you decide on the Agent of your choice, they should give you the overview of the current market conditions and projections. You should have a good feel for what’s going on in your market, including the most effective way to price your house. They should be able to tell you how much you will Net when all of your sales expenses have been paid if your house sells for a certain amount of money.
It is imperative you trust your Listing Agent, and that you have confidence in their ability to know what your house might be worth. Some less-than-ethical Realtors might tell you your home is worth more than it is. We call that Buying a Listing.
You should come to an understanding with your Realtor about how they will be paid. It’s also important to talk about how showings will be handled. They should also share with you how they plan to market your home, and how Buyers are screened to make sure they’re qualified to purchase a home of your value. We don’t want to accept an offer from a Buyer who can’t afford your house.
You should be informed how your Realtor will provide you with feedback after showings, if that’s something important to you.
Agency should be discussed. You should discuss the possibility of getting a Home Owner’s Warranty for a Buyer, and will you need a Pre-Inspection before putting your house on the market?
A good Agent will either advise you about Staging your home, or be involved in the process of hiring a reputable company to stage. What have you done since you purchased that has added value to the property? Be sure to share that information with the Agent you choose.
Getting Your House Ready to Sell
This is the part of the process that will make you the most money. Be conscious but work fast. The goal is to pack everything you won’t need until your new home. Take an objective look and get rid of what you won’t ever use again.
There may be lag time before your home is Active on the market. The most money will come if the home is CLEAN. You’re going to be moving. GET RID of anything you don’t need, or anything that hasn’t been unpacked since your last move.
Have a sense of urgency. It will take more time than you think. If you don’t love it or need it, get rid of it. Now is not the time to be sentimental. Declutter for yourself and your showings. You will not be sorry.
Use a bathtub or corner of a room to set aside items to be donated. Every time you leave your house, take a load to a thrift store.
Take a photo of electronic connections before you unplug them. Put ice cubes in furniture indentations in the carpet to raise them. Spend money on packing paper, tape, two magic markers, two dispensers. Cut inverted triangles on opposing sides of boxes as handles. Put a Post It Note on cupboard doors and drawers as you finish each one so you’re not constantly opening to see if they’re empty.
Fix what doesn’t work – within reason. If it’s not feasible to fix it, be sure to disclose on the Seller’s Property Disclosure what’s broken. After you have done as much decluttering as you’re going to do, CLEAN. Clean will bring you your biggest return on investment. In many markets, a dirty house can cost a Seller as much as $20,000 when it comes to offers.
Marketing Your Home
No matter how hot the market is, your Realtor should hire a professional photographer for your marketing photos. Photos snapped with their iPhones are not good enough unless they are a professional. In the current age of online marketing, your photos will be at least 85% of your showings. Make sure they’re excellent.
A good photographer will let you know a day or two before they arrive what they expect to find when they get there (toilet seats down, beds made, no clothes on the floor, dishes done or in the dishwasher, etc.).
Your Realtor will write a description of your home that will be seen far and wide, so if there are things you want included, be sure to tell them.
A yard sign and lock box may be placed at your property. Have your Realtor send you a copy of the MLS listing so you can verify the information or add additional items. If flyers are being made, they should be put in a box and on a counter for prospective Buyers.
Your property should be listed locally and nationally to multiple sources (Realtor.com, Zillow, etc.). Some Realtors will mail Just Listed postcards. Make sure you have access to your HOA online as vital information will be needed when the house goes Under Contract. If there are Special Features in your home that you want to make sure are pointed out (retractable awning, sound system, security system, etc.) have your agent make prominent cards to place in the home to notate those items to prospective purchasers.
Seller Responsibilities While Selling a House
Here are ten essential “commandments” to make life easier while your home is for sale.
You and your Realtor should agree on how showings will be handled. Have a frank discussion if that’s not being followed. Interested parties will see your house with their Realtor. It’s best to accommodate showings whenever possible. Be sure to LEAVE during showings. Turning down a showing is not in your best interest. Unless it’s an emergency, do not deny prospective Buyers who want to see your home. HOWEVER, NEVER let someone into your home who knocks on the door without an Agent.
Get your loan payoff information available. Any leases, average utilities, floorplans, upgrades, special features, or a list of amenities will be helpful.
I like a list of what a Seller loves about their home, what they consider special. What appealed to you when you purchased? It will help write the “story” to make your house appealing in the marketing material.
Set a schedule to keep in touch if the house doesn’t sell immediately. I contact my clients every Friday if their home hasn’t sold that week. Get feedback (if available) so you understand how Buyers are reacting to your property.
A new Market Analysis should be done monthly if a home doesn’t sell in a reasonable time. If your feedback says you’re priced too high, discuss that with your Realtor. A rule of thumb is for every twelve showings, you should have an offer. There’s something off kilter with a lot of showings and no offer.
If it’s necessary to lower the price, there will be more documentation and the MLS will need to be changed. Your Agent should have a system whereby they send an email blast to everyone who’s previously shown your home to inform them of a price drop.
Getting an Offer on Your House
When someone decides they want to purchase your home, their Agent will make an offer. Your Agent should review the Buyer’s financial qualifications and the details of the offer. Are they asking for anything special? Is there a Contingency?
When you have an offer amount, your Agent should do a new Net Sheet for you to let you know how much you should expect to walk away with if you sell your home for that amount of money.
You can negotiate, accept the offer, or counter. Dates and possession will be a part of the negotiations, as well as the financing. If there are multiple offers, it’s not always the highest offer to consider, but the terms and financing that are best for you.
In the offer, there will be a deadline for you to respond on whether or not you will accept the offer, counter the offer, or reject the offer. For multiple offers, make sure your Agent is keeping an eye on when a response is needed.
If you decide to accept an offer, your home will be changed in the MLS from Active to either “Under Contract” or “Pending.” Those classifications will determine whether or not your home will continue to be shown. Have that discussion with your Real Estate Professional to decide what’s in your best interest.
IMPORTANT: In the State of Colorado, once an offer on your home has been legally accepted, you may not accept another offer in place of the one you’ve accepted. You can choose to put another offer in a back up position, but once in place, that Contract is firm and cannot be displaced by the Seller.
When an offer is accepted on the property, it’s called “Under Contract.” All contingencies of the contract need to be met before the sale is final. It typically takes four to six weeks from the time an offer is accepted until the date of closing.
The Realtor’s job is to make sure all Contracts and Disclosures are signed properly. Title Commitment will be ordered, Earnest Money (and a signed copy of the contract) will be delivered to the Title Company by the Agent.
The Title Company will contact you. They will ask for your Social Security number (you may give it to them over the phone if you don’t want to send in an email). You will answer general questions and share the loan number and contact information for your mortgage company. It’s their job to pay all liens (taxes, mortgages, etc.) so the title is “clear” when it transfers to the new owner. It also insures you’re no longer liable for anything that may come up later.
If leases are being transferred with the property, the Title Company will be responsible for distributing rents and security deposits.
During this time, your Seller’s Property Disclosure will be shared with the Buyer, as well as necessary notices and disclosures. They will have the right to an Inspection (unless waived in the Contract). There is a legal period of negotiating any inspection issues. During this time the Appraisal will be done. From an Inspection, those items are negotiable. If the Appraiser finds something needs to be fixed (like peeling paint) those will be required to be fixed by the Seller before the home is sold.
Part of the Realtor’s job during this period is to make sure all dates and deadlines are being met.
Closing Preparations and Duties
If there are items that are agreed to between Buyer and Seller that will be corrected prior to closing, you and your Agent can make arrangements with the appropriate contractors and vendors to have inspection items fixed. You can also negotiate a cash credit to the Buyer at closing instead of having items fixed.
If the appraisal comes in low, there are several options you might use. You can read more in this article, What Happens if My Appraisal Comes in Low?
As mentioned before, the Appraiser may call out certain “Conditions” in the appraisal that will have to be fixed to sell the home. The most common items are peeling exterior paint, smoke alarms that are out of date or don’t work, decks without rails . . . basically any glaring safety items.
Your Realtor should be keeping in contact with the other Agent and the Buyer’s Lender to make sure everything is on track during the course of the loan process.
There may be title disputes, boundary issues, easements, items that are not on record that the Title Company finds out about or that you may or may not know. Any manner of things could come up during this period. It is a big reason why it is important to have an experienced agent on your side to be able to solve crises as they become evident.
If there is to be a Home Owner’s Warranty (HOW), verify it’s been set up. When all loan conditions have been met, the Lender will provide a Clear to Close (CTC). Those are my favorite words in a transaction. It means everything has been cleared in the loan process and we are just waiting for the final paperwork to be completed.
During and After Closing
Schedule a final walk-through with all parties. You should verify how you want to receive your money (wire transfer, Cashier’s Check, etc.). Review closing documents and verify all figures are correct.
Deal with any last-minutes crises. I work hard to ensure there are no last-minute “surprises,” but it’s not always possible to anticipate some of the crazy curve-balls life throws our way . . . although I can thankfully say I haven’t had any of these types of situations in well over a decade. Brings keys, photo ID, and Garage Door Openers to the closing.
If you are purchasing another home with the proceeds from this sale, make sure all paperwork and money are coordinated with subsequent Title Company.
Your Realtor will enter the sales data to the MLS and records for County. At this time, signs and directionals should be removed, as well as the Lockbox. Your Agent should make sure the file is complete with all of the necessary legal documents.
When I finalize a closing, I put a copy of the Settlement Statement in an envelope, addressed to my Client at their new address. At the beginning of the following year, I mail it so you have the necessary tax documentation for you or your accountant to complete your taxes.
I love being able to change the MLS to SOLD at the end of another successful transaction.
I’d love to hear from you!
If you have any questions about the process, or if you’d like to speak with an experienced Real Estate Professional to discuss your particular situation at absolutely no obligation, feel free to call, text, or email. I’d love to speak with you about selling your home.