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Seven Important Questions to Ask Before Selling
If you are a thinking
about selling real estate, you might be thinking this is a great time to
sell. You are 100 percent correct.
Unless you overprice
your home, in most communities there is an abundant supply of
prospective buyers who can afford to purchase during this second-best
home sales season (spring is traditionally the best time to sell a home
when the largest number of prospective real estate buyers are in the
market).
Should you sell your
real estate alone and save the sales commission? After you decide to
sell your house or condominium, the next issue is whether to list it for
sale with a professional real estate agent. Here are the seven key
questions real estate sellers should answer before deciding:
Can I correctly set the asking price for my home alone?
Unless you are a
professional appraiser with access to up-to-date recent home sale prices
of nearby residences like yours, you probably don't know how much your
home is really worth. Most do-it-yourself home sellers either overprice
or under-price their residences.
If a home is
overpriced, it will languish on the market unsold. Home buyers, and
their real estate agents, know when a home is overpriced based on recent
sales prices of similar neighborhood homes.
If a home is
under-priced, below the market value of nearby home sales prices, the
home will sell fantastically fast. Often, the seller doesn't realize
thousands of profit dollars were left on the table by under-pricing
his/her home.
The easy solution for
home sellers is to interview at least three successful realty agents who
sell homes in your vicinity. Even if you think you can sell your home
alone, the agents you interview won't mind.
The reason is they know
at least 80 percent of do-it-yourself home sellers decide to list with a
professional agent after 30 to 60 days. Chances are you will list your
home for sale with a Realtor who specializes in Franklin
County and Central Ohio, such as Janie Spires, Tim Clifford
,Ed Hafer,
Michael T Clifford
and Tom Roberts
Ask each agent you interview lots of questions. Write them down in advance so you don't forget what you want to know. As part of his/her listing presentation, each agent should give you a written CMA (comparative market analysis). The CMA form shows recent sales prices of nearby homes like yours, asking prices of neighborhood homes now listed for sale (your competition), and even asking prices of recently expired listings that didn't sell.
Each agent will also
give you their opinion of your home's market value, based on their CMA.
This is valuable information, especially if you try to sell your home
alone.
Can I successfully market my Franklin County Real Estate alone?
Most "for sale by
owner" home sellers attempt to market their residences by placing
newspaper ads, holding weekend open houses, and posting a "For Sale"
lawn sign. Some tech-savvy home sellers even create websites for their
homes and list them on "for sale by owner" websites.
But these efforts are
usually not enough to reach all prospective home buyers in the market.
The reason is, according to a recent survey by the National Association
of Realtors, over 70 percent of today's prospective home buyers begin
their quest on the Internet.
Unless your home is
listed for sale with a member of the Columbus Ohio MLS (multiple listing
service), you will be cutting yourself off from 70 percent of
prospective buyers for your home. (We list your home on the MLS and it
can be viewed across the entire USA).
Can I prepare a legally binding sales agreement and comply with the home sale defect disclosure laws?
As part of their
listing presentations, most real estate agents explain all the written
disclosures required by state, federal and local laws. For example,
where I live if I sell my home I must provide a certification my sewer
line to the street doesn't leak.
In addition, there is
the all-important requirement of preparing a legally binding sales
agreement.
Perhaps you know a
local real estate attorney who can prepare these vital documents for
you. Please be very wary of buying these forms at local stationery
stores, as they may not be up-to-date to comply with the latest
disclosure requirements to keep the real estate seller out of a lawsuit
in Central Ohio.
Will I be able to help my buyer obtain a mortgage?
Most home buyers need
to obtain a new mortgage to afford to purchase your home. Can you
explain FHA, VA, PMI (private mortgage insurance) and conventional
mortgage alternatives?
Unless you are very
fortunate to receive a purchase offer from a buyer who is pre-approved
(not just pre-qualified) for a home mortgage, even if the purchase offer
is acceptable, the sale isn't a "sure thing" until the buyer obtains
mortgage approval.
What contingency clauses in the sales contract are normal?
Experienced real estate
agents recommend their home buyers include contingency clauses in their
purchase offers for (a) mortgage finance approval and (b) a professional
home inspection. This is normal.
But your home buyer
might insist on additional contingencies, such as for sale of their
current home. How will you respond to such a purchase offer contingency?
Are you willing to take your home off the market while your buyer tries
to sell their present residence?
Who will handle the home sale closing details?
As a do-it-yourself
home seller, have you arranged for an attorney, title insurance company,
escrow firm, or mortgage lender to handle the details of the title
transfer? Who will hold the buyer's good faith or earnest money deposit?
Additional home sale
closing issues include who will pay the closing settlement costs, which
party will pay for the title insurance, and who pays the recording and
title transfer fees? There will probably be additional issues, such as
pro-rated property taxes.
Will the buyer expect a price reduction because you are saving the sales commission?
Additional issues which
are likely to arise include the issues of a price reduction if no sales
commission is paid and if the seller will pay half of a customary sales
commission to the home buyer's agent.
If the home seller
refuses to pay half the customary sales commission to the buyer's agent,
that buyer's agent might refuse to even show your home to their
prospective buyer.
Summary
These seven questions
are likely to arise if you decide to sell real estate without a
professional real estate agent. Because of the difficulty selling a home
without expert help, most do-it-yourself home sellers decide to list
their residences for sale with one of the agents interviewed within 30
to 60 days after trying to sell alone. That's a big reason why more than
80 percent of resale homes in Franklin County are sold with the help of
a professional real estate agent.
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