FAQs for Sellers
1. How do I set the 'right' selling price for my home?
When selling your home, setting the right price is absolutely critical to your home selling success. We recommend you follow these steps to insure you've set the best price for your home:
• Understand what the current real estate market conditions are and accumulate the recent sales and competing properties currently on the market. Be prepared to price your home based on current data and not emotional attachment to your home.
• Compare apples to apples and take into consideration factors like the square footage, number of rooms, location and overall condition of your home.
• Real estate markets can and do change. Prices are constantly changing based on the current market condition. We recommend you base your home's price on the most recent comparable sales in your neighborhood.
• Due to the competitive nature of our market and before placing your home, condo/townhome or homesite on the market, make sure your home is staged for top dollar and the curb appeal for your single family home is spectacular!
2. I have read a great deal of negative news about the mortgage problems, is there a 'best' time to sell my house?
From a national perspective, yes home sales have slowed in many areas. Positive signs continue to look bright with job opportunities opening up. Another factor is the time of year you choose to list your home for sale. Remember, buyers buy homes year round. While the market does traditionally shrink somewhat in the summers, home sales rebound nicely as winter approaches. The strongest selling season is typically during the winter months through April.
3. What do you recommend to help me sell my home faster (and for more money)?
We can recommend several tips to helping you position your home for maximum value and have it sell quicker. General speaking, a house will sell quicker when it has updated kitchens and baths, plus it must be well-maintained, staged to maximize space and remove clutter and priced correctly for the market conditions.
4. How is a home's value determined?
You have several ways to determine the value of a home.
• An appraisal is a professional estimate of a property's market value, bases on recent sales of comparable properties, location, square footage and construction quality. This service varies in cost depending on the price of the home.
• A comparative market analysis is an informal estimate of market value performed by a real estate agent based on similar sales and property attributes.
• You can also get a comparable sales report for a free from private companies that specialize in real estate data or find comparable sales information available on various real estate internet sites.
5. What is the difference between market value and appraised value?
The appraised value of a house is a certified appraiser's opinion of the worth of a home at a given point in time. Lender's require appraisals as part of the loan application process.
Market value is the price the house will bring at a given point in time. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker. Either an appraisal or comparative market analysis is the most accurate way to determine what your home is worth.
6. What standards to appraisers use to estimate value?
Appraisers use several factors when estimating a home's value, including the home's size and square footage, the condition of the home and neighborhood, comparable local sales, any pertinent historical information, sales performance and indices that forecast future value.
7. What's a home worth?
A home ultimately is worth what someone will pay for it. Everything else is an estimate of value. To deterimine a property's value, most people turn to either an appraisal or a comparative market analysis.
8. How does the Buyer get the real scoop on homes they are looking at?
Home inspections, seller disclosure requirements and the agent's experience will help. Disclosure laws vary by state, but in some states, the law requires the seller to coomplete a real estate transfer disclosure statement.
Sellers also are required to indicate any significan defects or malfunctions existing in the home's major systems. A checklist specifies interior and exterior walls, ceilings, roof, insulation, windows, fences, driveway, sidelwalks, floors, doors, foundation, as wells as the electrical and plumbing systems.
The form also asks seller's to note the presence of environmental hazards, walls or fences shared with adjoining landowners, any encroachments or easements, room additions or repairs made without the necessary permits or not in compliance with building codes, zoning violations, citations against the property and lawsuits against the seller affecting the property.
Also look for, or ask about, settling, sliding or soil problems, flooding or drainage problems and any major damage resulting from earthquakes, floods or landslides.
People buying a condominium must be told about covenants, codes and restrictions (CC&Rs) or other deed restrictions.
It's important to note that the simple idea of disclosing defects has broadened significantly in recent years. Many jurisdictions have their own mandated disclosure forms, as do many brokers and agents. Also, the home inspection and home warranty industries have grown significantly to accomodate increased demand from cautious buyer's. Be sure to ask questions about anything that remains unclear or does not seem to be properly addressed by the forms provided to you.
9. What are the standard contingencies?
Most purchase offers include two standard contingencies: a financing contingency, which makes the sale dependent on the buyer's ability to obtain a loan commitment from a lender, and an inspection contingency, which allows buyer's to have professionals inspect the property to their satisfaction.
A buyer could forfeit their deposit under certain circumstances, such as backing out of the deal for a reason not stipulated in the contract.
The purchase contract must include the seller's responsibilities, such things as passing clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.
10. Do I have to consider contingencies?
If you are a seller in a seller's market, in which there is more demand than supply, you probably won't have to entertain too many contingencies. But if you are selling in a buyer's market, when buyers are few, prepare to be very flexible. Granting contingencies also depends upon what kind of price you want to get and on the condition of your property, most experts agree. Remember, contingencies are written into the contract and are negotiable during the negotiation phase only.
11. What repairs should the seller make?
If you want to get top dollar for your property, you probably need to make all minor repairs and selected major repairs before going on the market. Nearly all purchase contracts include an inspection clause, a buyer contingency that allows a buyer to back out if numerous defects are found or negotiate their repair.
The trick is not to overspend on pre-sale repairs, especially if there are few houses on the market but many buyers willing to buy at almost any price. On the other hand, making such repairs may be the only way to sell your house in a down market.
12. Whose obligation is it to disclose pertinent information about a property?
In most states, it is the seller, but obligations to disclose information about a property vary.
Under the strictest laws, you and your agent, if you have one, are required to disclose all facts materially affecting the value or desirability of the property which are known or accessible only to you.
This might include: homeowners association dues; whether or not work done on the house meets local building codes and permits requirements; the presence of any neighborhood nuisances or noises which a prospective buyer might not notice, such as a dog that barks every night or poor TV reception; any death within three years on the property; and any restrictions on the use of the property, such as zoning ordinances or association rules.
13. Will a neighbor problem reduce the value of my property?
While it may not reduce the actual value, a cluttered landscape next door can detract from the positive aspects of your home. Review your local laws, which should be on file at the public library, county law library or City Hall.
A typical "junk vehicle" ordinance, for example, requires any disabled car to either be enclosed or placed behind a fence. And most cities prohibit parking any vehicle on a city street too long.
It also may be worthwhile to check into local zoning ordinances. An operator of a home-based business usually is required to obtain a variance or permanent zoning change in residential areas.
In addition, if a neighbor's repair work produces loud noises, he may be breaking local noise-control ordinances, which are enforced by the police department.
Before bringing in the authorities, you may want to make a copy of the pertinent ordinance and give it to your neighbor to give them a chance to correct the problem.
14. What is a lease option?
When a renter signs a lease with an option to purchase a property for a specific price within a certain time frame, that is called a lease option. In most lease-option situations, a portion of the rent is applied to a future down payment.
Lease options are most popular among buyers who don't have enough funds for a down payment and closing costs.
15. How do lease options work and what are the benefits?
A lease option is an arrangement with you and a seller to exercise the option to buy a house after you have rented it for a specific period. A portion of your rent would applied toward the purchase if the option is exercised. This is referred to as rent credit, which most institutional lenders will accept as part of the down payment if rental payments exceed the market rent and if a valid lease-purchase agreement is in effect, a copy of which must be attached to the loan application.
If you are a seller, lease options can give you several advantages, especially in a slow market. These include a monthly rent higher than market rent, top-market value for the property and tax-free use of the option consideration until the option expires or is exercised. Also, the renter is more likely to treat the property like an owner, tax-free use of option consideration until the option expires or is exercised.
Read any lease-option arrangement carefully for details on transferring the option and other important concerns.
16. Is there a secret to good negotiating?
There are several cardinal rules to negotiating effectively. One is do your homework, and learn as much about the seller or the buyer as you can. Another is to play your cards close to your vest and not reveal too much information to the other party or their agent. Don't let yourself get rushed into any decision, no matter how tempting it may be. Finally, if you have doubts about your negotiating skill, hire someone to help.
17. How do you prepare a house to sell?
Doing whatever you can to put your house's best face forward is very important if you want to get close to your asking price or sell as quickly as possible. Short of spending a lot of money, here are several ideas for making your home show better:
• Sweep the sidewalk, mow the lawn, prune the bushes, weed the garden and clean debris from the yard.
• Clean the windows (both inside and out) and make sure the paint is not chipped or flaking. And speaking of paint, if your home was built before 1978, new federal law gives a buyer the right to request a lead inspection. If you think you might have some problems, do the inspection yourself beforehand and make any fixes you can.
• Be sure that the doorbell works.
• Clean and spruce up all rooms, furnishings, floors, walls and ceilings. It's especially important that the bathroom and kitchen are spotless.
Organize closets.
• Make sure the basic appliances and fixtures work. Get rid of leaky faucets and frayed cords.
• Make sure the house smells good: from an apple pie, cookies baking or spaghetti sauce simmering on the stove. Hide the kitty litter.
• Put vases of fresh flowers throughout the house.
• Having pleasant background music playing in the background also will help set your stage.
18. What is the difference between list price, sales price and appraised value?
The list price is a seller's advertised price, a figure that usually is only a rough estimate of what the seller wants to get. Sellers can price high, low or close to what they hope to get. To judge whether the list price is a fair one, be sure to consult comparable sales prices in the area.
The sales price is the amount of money you as a buyer would pay for a property.
The appraisal value is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors.
19. What is seller financing?
Seller financing is when a seller helps to finance a real estate transaction by taking back a second note or even financing the entire purchase if the seller owns the home free and clear. Usually sellers do this when a buyer has difficulty qualifying for a conventional loan or meeting the purchase price.
Seller financing differs from a traditional loan because the seller does not give the buyer cash to complete the purchase, as does a lender. Instead, it involves extending a credit against the purchase price of the home while the buyer executes a promissory note and trust deed in the seller's favor. These special circumstances must be acceptable to the lender who makes the first mortgage on the property.
The necessary paperwork is prepared by the title or escrow company after the terms are worked out between the buyer and seller.
If you are a seller considering such an arrangement, it is critical to thoroughly evaluate the creditworthiness of the buyer first. Fear of default makes many sellers reluctant to take back a second. But seller financing can bring a higher price plus complete the sale sooner in some situations.
20. What are the benefits of seller financing?
Seller financing offers tax breaks for sellers and alternative financing for buyers who can't qualify for conventional loans.
If you are a seller, the risks you face are the same as those facing any lender: Is the borrower a good credit risk? Will the property hold enough value over time to allow for the repayment of all loans made against it?
You should run a full credit check on the borrower, require hazard insurance on the property and include a due-on-sale clause. There also are financing, disclosure and repayment-term requirements that need to be met. It is wise to consult a lawyer when putting together this kind of transaction.
21. How are the rates for seller financing?
The interest rate on an owner-carried loan is negotiable. Ask your agent to check with a lender or mortgage broker to determine the current rate on institutional first (or second) loans.
Seller financing typically costs less than conventional financing because sellers don't charge loan fees (points). Interest rates on an owner-carried loan will also be influenced by current Treasury bill and certificate of deposit rates. Sellers usually aren't willing to carry a loan for a lower return than they would earn if their money was invested elsewhere.
22. How does someone sell a slow mover?
Even in a down market, real estate experts say that price and condition are the two most important factors in selling a home.
If you are selling in a slow market, your first step would be to lower your price. Also, go through the house and see if there are cosmetic defects that you missed and can be repaired.
Secondly, you need to make sure that the home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage, and listings on the local multiple listing service (MLS) and on the Internet.
Another option is to pull your house off the market and wait for the market to improve.
Finally, if you who have no equity in the house, and are forced to sell because of a divorce or financial considerations, you could discuss a short sale or a deed-in-lieu-of- foreclosure with your lender.
A short sale is when the seller finds a buyer for a price that is below the mortgage amount and negotiates the difference with the lender.
In a deed-in-lieu-of-foreclosure situation, the lender agrees to take the house back without instituting foreclosure proceedings. The latter are radical options. Your simplest, and in many cases most effective, option is to lower the price.
23. Can a home seller sell a home for less than its mortgage?
Yes, in some case you can sell your home for less than what you still owe on the mortgage. But it is complicated and depends on the lender. This situation is known as a "short sale." Sometimes a lender will be willing to split the difference between the sale price and loan amount, which still must be paid.
A short sale may be more complicated if the loan has been sold to the secondary market because then the lender will have to get permission from Freddie Mac, the two major secondary-market players.
If the loan was a low down payment mortgage with private mortgage insurance, then the lender also must involve the mortgage insurance company that insured the low-down loan.
24. How does a home go into foreclosure?
Foreclosure proceedings usually begin after a borrower has skipped three mortgage payments. The lender will record a notice of default against the property. Unless the debt is satisfied, the lender will foreclose on the mortgage and proceed to set up a trustee sale.
25. When does foreclosure begin?
Lenders will initiate foreclosure proceedings when homeowners become delinquent in their mortgage obligations, usually after three payments are missed. The lender will then notify the buyer in writing that he or she is in default. The lender can request a trustee's sale or a judicial foreclosure, in which the property is sold at public auction.
A borrower can cure the default by paying the overdue amount and the pending payment after the notice of default is recorded, usually no later than a few days before the property's sale.
Some sales allow the successful bidder to take possession immediately. If the former owner refuses to vacate the premises, the court can issue an unlawful detainer that allows the sheriff to come out and evict them.
Borrowers should do everything they can to avoid foreclosure, which is one of the most damaging events that can occur in an individual's credit history.
26. How long do bankruptcies and foreclosures stay on a credit report?
Bankruptcies and foreclosures can remain on a credit report for seven to ten years.
Some lenders will consider an borrower earlier if they have reestablished good credit. The circumstances surrounding the bankruptcy can also influence a lender's decision. For example, if you went through a bankruptcy because your employer had financial difficulties, a lender may be more sympathetic. If, however, you went through bankruptcy because you overextended personal credit lines and lived beyond your means, the lender probably will be less inclined to be flexible.
Park City Home Staging Tips and TricksFor home sellers, it's important to realize that your Park City home becomes a product once it goes on the market. To sell successfully, you need to present a product worth noticing and that's attractive to the buyer's eyes, which is what home staging can do. Home styling or staging is not about decorating or re-decorating your home but it's about highlighting your home's best assets and de-emphasizing its flaws. You need to turn your Park City home into a spectacle that appeals to the widest range of prospective buyers. You need to neutralize your surroundings so your buyers will feel as if they could live in your house. Here are some ideas on how to stage your Park City Home:
http://www.pureparkcityrealestate.com/00BA98 Posted on June 19, 2011 09:00:56 by Michael Lapay
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Lower Deer Valley Real Estate Featured Area: Black Diamond Lodge
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