Are you an owner interested in selling a home? A smart sale is one that’s quick and profitable and that’s exactly what I want yours to be.

Your home is one of your most precious assets and there are a number of things to keep in mind when selling.  Before getting too far into the process, you will need to know exactly what your home is worth and equip yourself with some general information about selling.  The home seller articles will help get you up to speed and maximize the return on your investment when selling.

To learn more about the current real estate market or compare your property with similar ones in your neighborhood, please contact me for a quick Comparative Market Analysis.  This is a free, no obligation service.  There are absolutely no strings attached -- so don’t miss this opportunity to consult with a proven real estate professional about putting your home on the market.

Articles

• Key Concepts, Actors, & Terms in the Home Selling Process
• Selling Your Home in a Buyer’s Market
• Overpricing Your Home Could Lead to No Sale
• Important Real Estate Terms You Need To Know

Key Concepts, Actors, & Terms in the Home Selling Process

Before you put your house on the market, it is important to understand the key actors and terminology associated with the sales process.  The following bullets provide a brief introduction to some of the most common concepts and terms which you will encounter during the process.

• Listing Agent vs. Selling Agent:  As a seller, you hire a listing agent to help you market and sell your home. A selling agent represents a potential buyer or buyers making an offer on your home. Each agent is associated with a broker, or real estate company.


• Cooperative Sale:  As the seller, when you list your home with a full service broker, it will likely be sold in a cooperative sale.  This means that the listing broker is directly paid a listing commission from your sales proceeds and then splits this commission with the selling broker.  From there, the listing and selling brokers split their commission proceeds with the listing and selling agents.  In cases were the listing broker also provides the buyer, then the broker receives both the listing and selling commissions.   If the buyer’s real estate agent is also a Long & Foster sales associate, Long & Foster becomes a disclosed dual agent with the consent of both buyer and seller.


• Listing Appointment:  This is the first step toward putting your house up for sale.  During the listing appointment the seller or sellers meet with a listing agent at their home to review information on recent sales and current listings of comparable homes in your neighborhood. The agent will also want to tour your home. Be ready to discuss specific details about schools, nearby public transportation, and other desirable community features, as well as home features not readily apparent.
  
  Remember:  Prospective buyers will be comparison shopping and keenly aware of subtle differences in houses for sale in the area. Be sure to tell your listing broker why yours is special—from any home remodeling to afternoon winter sunshine.


• Asking Price:  After discussing market conditions and comparable sales and listings with the listing agent, you will set the listing or asking price for your house. Experience in the industry has proven a market analysis approach is a more accurate than the “replacement cost” or “potential rental income” methods.
  
  Rule of Thumb: “A house priced more than 5% over market value discourages offers.” Market value is commonly defined as, “What a ready, willing and able buyer will pay, at a price a seller will accept.” Buyers are sophisticated. They have already been shopping, and when they see your home, they will be comparing features and financing. Buyers who cannot afford the price simply won’t look. Hence the industry saying, “A house priced right is half sold.”


• Listing Agreement:  When you are ready to put your house on the market, you will sign a listing agreement which specifies a length of time, or listing period, you will work with a listing agent and broker.


• Sample Net Sheet:  Based on the sales price and information on any current outstanding loans, the listing agent may provide you with a worksheet that estimates the net cash from the sale. In this exercise, your anticipated charges are subtracted from the sales price.


• Financing Strategy:  No sale can be completed without financing. Therefore, it is to every seller’s advantage to appeal to the greatest number of home buyers by accepting the greatest range of financing plans. The listing broker can explain the basic differences between Veterans Administration (VA), Federal Housing Administration (FHA), and conventional financing, as well as explain “discount points.”


• Pay-Off Notice:  This is a signed letter notifying your lender you intend to pay off the mortgage. The broker will then mail the letter to your lender to help you minimize any prepayment penalties. Also provide your lender’s address, loan balance, assumability, years remaining on present mortgage, and the interest rate, if possible.


• Lender Appraisal: Lenders require a home appraisal to ensure that the property is adequate collateral for a loan. A lender will usually insist on ordering its own appraisal for this purpose.  The lender assigns the appraiser and the buyer pays the cost.


• Inspections:  The VA, FHA, and most lenders of new mortgages require a termite inspection certificate that shows the house is free of infestation. If you do not have a current certificate, the listing or selling broker will arrange an inspection at your expense. Sometimes a home inspection and radon testing will also be ordered. You should provide all information regarding the physical condition of the property, such as the presence of fire retardant plywood.


• Personal Property: You must be ready to supply your listing broker with a specific list of the personal property that is included, or conveyed, in the sale. These items can include light fixtures, drapery rods, appliances, firewood, and even swimming pool chemicals. You should tag or remove items you do not wish to convey.


• Lockbox:  A lockbox is a universal metal container for your house key that is hung on the front door and can only be opened by licensed sales associates. It provides access to your home for potential buyers when you are away.

Selling Your Home in a Buyer’s Market

Although home appreciation has leveled off in some markets, sellers can still get good prices for their homes. The sale may take a bit longer and require a bit more creativity, but it can be well-worth the effort.  The following bullets provide a few important guidelines for selling your home in a buyer’s market.

• Price Your Home Accordingly.   Even though a comparable home in your neighborhood sold for a very high price last year, this does not mean you will be able to realize the same price when selling your home now.  A full-service real estate professional can help you to determine the appropriate, competitive listing price for your home.  When considering working with a real estate agent, it is important to find a sales associate that will encourage you to list at a price in accordance with other homes currently on the market, rather than those previously sold.  Visit What Is My Home Worth? to get an idea of your home’s value.


• View Appreciation Realistically. While price appreciation has slowed in some markets in 2006, it is important to look realistically at the financial gains you have made over the years you have owned your home. According to the National Association of REALTORS®, over the last six years the median sales price of a single-family existing home in the U.S. appreciated 7.6 percent annually.


• Make Your Home More Marketable. When a buyer sees your house for the first time, a critical first impression is made. Mmaximize curb appeal by trimming trees and planting flowers.  Applying a fresh coat of paint to the interior and/ or exterior might also prove valuable. Consider neutral colors for interior walls and carpets. Dark colors on walls, along with unnecessary clutter, make rooms look smaller. 


• Complete a Pre-Listing Home Inspection. If repairs are required, it is a good idea to go ahead and fix the problems. Potential buyers and lenders will cast an extremely critical eye over your home as the market shifts toward buyers.  As the number of houses on the market begins to increase, buyers may opt to pass on a home that needs too many repairs.


• Offer a “Seller’s Contribution.” In today’s market, many buyers are struggling to take advantage of the low interest rates to purchase a home.  While these buyers may have funds for the earnest money deposit, inspections, and insurance, many have difficulty coming up with the funds needed for closing.  In other cases, buyers may be attempting to stretch financially and purchase a home which might be just beyond their pre-qualification amount.  Savvy sellers offering incentives such closing assistance or willing to buy down the buyer’s interest rate, will find that they will stand out from the competition.


• Don’t Worry. Properly priced homes that stand out from the competition are selling more rapidly than the competition.  Demand for homes is still at historical highs and if you have taken the advice of a licensed real estate agent.
  

Overpricing A Home Could Lead To No Sale
Sellers Need To Stay On Top Of Rapidly Changing Markets

Overpriced home listings usually don't sell in any market. In today's market, there's no margin for error when selecting a list price. If your price is too high, the market can literally pass you by.

Many sellers ask: What's the harm in pricing high initially? You can always come down. While this is true enough, you may end up with a lower selling price if you start too high to begin with, particularly if the market is declining.

Today's real estate market is generally balanced, although there have been modest declines in median sales price in some areas. Prices are still going up in areas with low inventory and high demand, but the appreciation rate in these areas is slower than it has been in recent years.

Given today's market conditions, buyers are more cautious about home purchases than they were last year. They are looking for value. A high price sends a message that you are out of touch with the market. Making an offer takes a lot of time and energy. Most buyers aren't willing to do this if they think that the seller is unreasonable.

Another factor that can keep buyers from making offers on overpriced listings is that they don't want to offend the sellers. Buyers feel that a low offer might jeopardize their chances of buying the property. They'd rather wait to see if the sellers lower their price before making an offer.

There is more emotion involved in a home purchase than in most other business negotiations. Home buyers usually need to feel passionate about a property before they'll make an offer. Today's buyers are concerned about overpaying in a soft market. It's hard for them be enthusiastic enough to make an offer if a listing is priced too high. A listing that might look great to them at the right price might not even be appealing at an above-market price.

So, one risk of overpricing is that you don't receive any offers at all. Another related risk is that your home might not even be shown to buyers if it's priced too high. There usually is a direct correlation between the amount of showings a listing receives and the time it takes to sell.

Home Seller Tip:

Sellers who live in areas where prices are declining need to be particularly careful not to overprice their homes. Before your home goes on the market, ask your agent to update the market evaluation of your home that was done before you listed to make sure that the recommended price range still holds. If not, readjust the price before you hit the market. Your home is most marketable when it's new on the market. So capitalize on this enthusiasm by presenting a good product at the right price.

Since the market is always changing, you may find that your list price could be too high soon after your home is on the market. Many sellers object to lowering their price too quickly. They're afraid they'll leave money on the table.

However, the best time to lower your price is as soon as you discover that the price is high. This way you quickly rekindle interest in your property. Leaving your home on the market too long at a high price can cost you money if prices decline.

After your home is on the market, keep an eye on your competition. Ask your agent to keep you informed about listing activity in your area. Find out which listings are selling and which aren't. How does your home stack up in comparison?

The Closing:

Pricing slightly lower than competitors can often bring about the desired result.

Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books

Important Real Estate Terms You Need To Know

Before you buy a piece of property, you should familiarize yourself with the terms of the business so that you will be speaking the same “language” as the professionals in the field! 

While these definitions may be somewhat different than could be found in a dictionary (to a text book type definition of each term), what is presented here are the general meaning understandings for the terms set out.

Adjustments: Adjustments may be property taxes (either unpaid or paid in advance), electricity, gas or other fuel, condo fees, or mortgage interest already paid out for future service.  These must be pro-rated and be credited on closing to the appropriate side of the transaction.  This can involve an expenditure of several hundred dollars payable on the closing date when the sale is completed.

Agreement of Purchase and Sale (Offer to Purchase): A contract by which one party agrees to sell and another agrees to purchase.  The contract may be firm (no conditions attached) or conditional (certain conditions must be fulfilled).

Amortization Schedule: A schedule, which, if met, will lead to the extinguishing of debt, with equal payments at regular intervals over a period of time. (For example – an amortization schedule may separate out the monthly portions for both principal and interest and how much of the allocated to each.  It also shows the unpaid principal balance).  The amortization is the number of years that it will take to pay off the loan, were the interest rate to remain constant.

Appraisal:  An estimate of quantity, quality, or value.  The process through which conclusions of property value or property facts are obtained; also commonly the report setting forth such estimate and conclusion.  Many appraisals are done for mortgage lending purposes and may not match the sale price of the property. 

Assessed value: A valuation placed upon property by the state, as a basis for municipal taxation.  In the recent past and in some areas currently, a local/municipal assessor may assess the value.

Assumption of Mortgage: When a purchaser takes ownership encumbered with a mortgage he may assume the responsibility as the guarantor for the unpaid balance of the mortgage.  Such a purchaser is liable for the mortgage repayment.

Buy down: Used in conjunction with the lowering of the rate of interest to be paid during the term of the mortgage by the advanced payment of a portion of the interest rate.  Often the vendor effectively lowers the interest rate of a mortgage by prepaying a portion of the interest to be paid during the term of the mortgage.      

Chain of Title: The succession of conveyances from some accepted starting point whereby the present holder of the real property derives his title.

Closing:  The point (in time) of a real estate transaction when the seller transfers title to the purchaser in exchange for the purchase price.

Closing Date: The date specified in the Agreement of Purchase and Sale when the purchaser delivers the balance of money due and the seller delivers a deed and vacant possession of the property (unless otherwise agreed).

Closing Statement: A listing of the debits and credits of the purchaser and the vendor to a real estate transaction for the financial settlement of the transaction.

Commission:  Payment for the performance of specific duties; in real estate, usually payment measured by a percentage of another sum – as a percentage of the sale price paid for selling a property.

Condition:  A condition in a contract calling for the happening of some event or performance of some act before the agreement becomes firm and binding on all the parties.

Conditional Offer: An Agreement of Purchase and Sale may be subject to specific conditions.  These conditions could be the arranging of a mortgage, home inspection or the selling of an existing home.  There is always a time limit stipulated within which the specified conditions must be met.

Condominium:  A form of property ownership providing for individual ownership of a specific apartment or other space not necessarily on the ground level together with an undivided interest in the land or other parts of the structure in common with other owners.

Contract:  An agreement entered into by two or more parties by the terms of which one or more of the parties, for a consideration, undertakes to do or refrain from doing some act or acts in accordance with the wishes of the other party or parties.  A contract to be valid and binding must (1) be entered into by competent parties (2) be bound by a consideration (3) possess mutuality (4) represent an actual meeting of the minds and (5) cover a legal and moral act.

Covenant:  An agreement written into deeds and other instruments promising performance or non-performance of certain acts or stipulating certain uses or non uses of the property.

Deed:  An instrument in writing which, when executed and delivered conveys an estate in real property, signed by the vendor and purchaser, transferring ownership.  This document is then registered against the property as evidence of ownership.

Deposit: Payment of money or other valuable consideration as pledge for fulfillment of contract; may be given as a “piece of paper” when the offer is signed and converted to a bank draft or other form of payment once the offer has been accepted.

Easement:  The unauthorized extension of boundaries of land (for example, when a homeowner puts up a fence over the lot line and “takes over” some of the neighbor’s property).  The act of trespassing upon the domain of another and may be a partial or gradual invasion or intrusion.

Encumbrances:  Outstanding claim or lien recorded against property or any legal right to the use of the property by another person who is not the owner.  Restrictions, easements and reservations are encumbrances, although not liens.

Estate:  A right in property.  An estate in land is the degree, nature or extent of interest which a person has in it.

Fair Market Value: The highest price, in terms of money, that the property will bring to a willing seller, if exposed for sale on the open market while allowing a reasonable time to find a willing purchaser, buying with the knowledge of all the uses, and with neither party acting under necessity, compulsion or peculiar and special circumstances.  Fair Value: Value that is reasonable and consistent with all the known facts.

First Mortgage: A mortgage, which has priority as a lien over all other mortgages.

Home Inspection: Examination of the house by an expert selected by the purchaser.

Insurance: Before the transaction can be closed, the purchaser must have home insurance arranged and in effect.

Lien:  A charge against property whereby the property is made security for the payment of a debt.

Mortgage Discharge: The removal of a mortgage as a lien against the property and is normally accomplished by repaying the debt (and any interest including any penalty, if any).  A document should be obtained from the entity to whom the debt was owed.  The document should be recorded on the property’s title.

Multiple Listing Service (MLS): The system in which participating brokers agree that they will offer others (agents) the opportunity to market to varying degrees properties listed with them for sale, lease, or exchange and to pay a stipulated commission to the cooperating broker.

Option Agreement: A document stipulating that, in exchange for the payment of a sum of money or other consideration, a specified individual is to be given first chance of buying a property within a specified period of time.  If the option-holder does not buy within the specified time, he loses his right and the sum so paid.

Permanent Fixtures: Permanent improvements to property that may not be removed upon the sale of the property (furnace, central air conditioning, pool, windows, etc.), unless specifically set out in the Agreement of Purchase and Sale.  Usually affixed to structures or land in such as manner that they cannot be independently moved without damage to themselves or the property housing supporting or pertinent to them.

Power of Attorney: Written instrument authorizing a person to act for another.

Real Estate: Includes real Property, leaseholds or a business whether with or without the building, fixtures, stock-in-trade, goods or chattels in connection with the operation of the business.

Real Estate Broker or Agent: An intermediary between the buyer and the seller who is licensed in the state to carry out such activities.

Real Property:  (1) The combination of the tangible and intangible attributes of land and improvements.  Value-wise, it is the sum of the value of the real estate, considered as land and structure and, for example, the tangible value arising by reason of a favorable lease; (2) The real estate plus the rights that go with it;   (3) Property and what is on it (immovable).

Survey:  (1) The accurate mathematical measurement of land and buildings thereon, made with the aid of instruments.  (2) The process of ascertaining the quantity and/or location and boundaries of a piece of land.  It may include physical features affecting it, such as grades, contours, structures, etc., a statement of the course, distance and quantity of the land.

Title:  The means of evidence by which the owner of land has lawful ownership thereof; the union of all the elements, which constitute proof of ownership.

Title Insurance: An agreement binding the insurer to indemnify the insured for losses sustained by reason of defects in the title to the real estate.

Trust Account: Bank account set up by a broker to deposit funds entrusted to him by his buyer.

Zoning:  Government regulation of land use; regulation by local government under police power of such matters as height, bulk, and use of buildings and use of land intended to accomplish desirable social and economic ends.