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Frequently
Asked Questions
Selling
Your Home - Q & A
Pricing the House to Sell
Q. Is a low offer a good idea?
A. While
your low offer in a normal market might be rejected immediately,
in a buyer's market a motivated seller will either accept or make
a counteroffer.
Full-price
offers or above are more likely to be accepted by the seller.
But there are other considerations involved:
- Is the offer contingent upon anything, such as the sale of
the buyer's current house? If so, a low offer, even at full
price, may not be as attractive as an offer without that condition.
- Is the offer made on the house as is, or does the buyer want
the seller to make some repairs or lower the price instead?
- Is the offer all cash, meaning the buyer has waived the financing
contingency? If so, then an offer at less than the asking price
may be more attractive to the seller than a full-price offer
with a financing contingency.
Q. What is
the difference between market value and appraised value?
A. Appraised
value is a certified appraiser's opinion of the worth of a home
at a given point in time. Lenders require appraisals as part of
the loan application process; fees range from $200 to $300.
Market value
is what 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.
Q. How does
someone sell a slow mover?
A. Even
in a down market, real estate experts say that price and condition
are the two most important factors in selling a home.
The first
step is to lower the price. Also, go through the house and see
if there are cosmetic defects that you missed and can be repaired.
Secondly,
home sellers should make sure that the home is getting the exposure
it deserves through open houses, broker open houses, advertising,
good signage and a listing on the multiple listing service (MLS).
Another option
is to pull the home off the market and wait for the market to
improve.
Finally, frustrated
sellers who have no equity and are forced to sell because of a
divorce or financial considerations could discuss a short sale
or a deed in lieu of a foreclosure with the mortgage 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. But these would be considered more radical
options than lowering the price.
Q. How is
the price set?
A.
It's very important to price your home appropriately relative
to current market conditions. Because the real estate market is
continually changing, and market fluctuations have an effect on
property values, it's imperative to select your list price based
on the most recent comparable sales in your neighborhood.
A comparative
market analysis provides the background data on which to base
your list-price decision. Study the comparable sales material
presented to you by the different agents you interviewed initially.
If the analyses are more than two or three months old, have your
agent update the report for you.
If all agents
agreed on a price range for your home, go with the consensus.
Watch out for an agent whose opinion of value is considerably
higher than the others.
Q. How do
you prepare a house to sell?
A.
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,
there are several steps people can take to make their 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.
Q. What are
the standard ways of finding out what a house is valued at?
A. A
comparative market analysis and an appraisal are the standard
ways consumers, lenders and realty agents determined what a home
is worth.
Your real
estate agent will be happy to provide a comparative market analysis,
an informal estimate of value based on comparable sales in the
neighborhood. You also can research "the comps" yourself
by checking on recent sales in public records. Be sure that you
are researching properties that are similar in size, construction
and location.
This information
is not only available at your local recorder's or assessor's office
but also through private companies and on the Internet.
An appraisal,
which generally cost $200 to $300 to perform, is a certified appraiser's
opinion of the value of a home at any given time. Appraisers review
numerous factors including recent comparable sales, location,
square footage and construction quality.
Q. What is
the difference between list and sales prices?
A. The
list price is the price tag put on a house in a real estate listing;
it usually is only an estimate of what the seller would like to
get for the property. The sales price is the amount a property
actually sells for. It may be the same as the listing price, or
higher or lower, depending on how accurately the property was
originally priced and on market conditions.
A seller
may need to adjust the listing price if there have been no offers
within the first few months of the property's listing period.
Q. What is
the best time to buy?
A. Because
many buyers prefer to move in the spring or summer, the market
starts to heat up as early as February. Families with children
are anxious to buy so they can move during summer vacation, before
the new school year begins.
The market
slows down in late summer before picking up again briefly in the
fall. November and December have traditionally been slow months,
although some astute buyers look for bargains during this period.
Q. What are
the two most important factors when selling a home?
A. Even
in a down market, real estate experts say price and condition
are the two most important factors in selling a home. So, the
first step is to lower the price. Also, go through the house and
see if there are cosmetic defects that you missed and can be repaired.
Home sellers
should make sure that the home is getting the exposure it deserves
through open houses, broker open houses, advertising, good signage
and a listing on the local multiple listing service. If the seller
is using a real estate agent and the property isn't getting proper
exposure, find another agent.
Q. What is
the difference between list price, sales price and appraised value?
A.
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.
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