Real Estate Articles
Before Putting your House on the Market
Before putting your house on the market, here are some
questions you should ask and some answers you should have.
How much should I ask for my home?
Realistically priced houses sell faster
When Realtors have shown an over-priced property repeatedly and encountered
resistance to the price, the home becomes shopworn through overexposure. As
the listings ages, Realtors may opt to show their buyers newer listings where
they have not experienced market rejection. Many sellers have learned, to their
dismay, that if you overprice your house, you are more likely to end up slashing
the price to renew interest in your property or failing to sell.
The best way to arrive at a market value price
If you are truly motivated to sell, interview Realtors, the professionals in
your community. A Realtor will present homes that have sold in the area, known
as comparable sales or comps. The agent will compare the features and benefits
of the comps with the amenities in your home and assign a plus or minus value
to each difference in features or benefits to develop an estimated sales price.
Realtors have a remarkable record of listing properties at or near the final
sales price due to their daily working knowledge of the product, homes like
yours, and the market, the community in which it is located.
Avoid the "wiggle room" temptation
Many sellers have past experiences with listing homes tens of thousands of
dollars above the eventual sales price. They want to get the most money for
their property and list high thinking that they have thousands of dollars to
nogotiate with in striking a deal. Consider listing very close to your sales
price to attract more offers and then negotiating in smaller increments toward
an eventaul sale price. Studies have shown that the best offers are made in
the first month, so don't hold out too long for "top dollar."
Don't be offended by a low-ball offer
A sale is accomplished through practicing the art of negotiation. If a buyer
initially offers a price, which is considerably below the list price, consider
it a sincere offer to negotiate a sales contract on your property. Your Realtor
will help you structure a counter-offer that indicates your willingness to
give a little if the buyer is willing and able to come up to a price that more
truly reflects the current market value. Many transaction today have multiple
counter offers traded back and forth until an agreement is struck. It's part
of the process.
Another price check on property
Most buyers will obtain a loan for a portion of the purchase price. If you
overprice the property, and the buyer fell in love with the home and paid too
much, the buyer may not be able to obtain the anticipated loan amount. The
lender will appraise the property and offer to loan a portion of the marketing
value. If the property does not appraise high enough to warrant the loan amount
specified in the purchase agreement, both parties may need to compromise (Seller:
lower sales prices; Buyer: increase down payment/equity) to complete the sale.
Other options
You may hire a professional appraiser who, for a fee, will recommend a figure
based on recent sales in your area. Make sure a professional association such
as the American Institute of Real Estate Appraisers certifies the appraiser.
How long will it take to sell?
In a "seller's market," which occurs when interest rates are reasonable
and the supply of available homes is limited, you can expect to sell your house
quickly - often within weeks in neighorhoods where houses are in demand and
short supply. When there are fewer buyers and more inventory (homes for sales),
the buyer activity is slower. In a slow market, you may expect to wait two
or more months before finding the right prospect even when your house is priced
right.
What about advertising?
A large portion of home sales are accomplished through the cooperative marketing
of the listing agent and hundreds or thousands of Realtors who have access
to the property through the TEMPO Multiple Listing Service (MLS) and internet
web sites. Some national firms attribute over 50 percent of home sales to the
MLS and other Realtors. A prospective buyer might also learn of your home by
driving by, surfing the web, or reading the classified and display ads in local
newpapers. Here again, it pays to work with a Realtor. They often have contracted
advertising rates that allow for larger ads and more frequent placement. They
also know which newspaper bring the most response for a specific community
Realtors can list your property on a number of well-traveled web sites including
http://www.living.com
and http://sucasa.com
from the California Association of Realtors and http://realtor.com
from the National Association. Advertising is part of the cost of doing business
a Realtor absorbs when marketing your property.
Should I make any improvements to the property for a quick sale?
Yes, but don't go overboard. A thorough cleaning from top to bottom will assure
your home is presented in the best condition. Consider hiring a cleaning service
to clean and polish: windows, floors, window coverings, light fixtures, pictures,
etc. You will want to shampoo carpeting unless it is damaged or stained. Less
is more when showing property, so remove all but essential furniture and knickknacks
to open up the space to it's fullest potenial. Fresh paint is attractive if
you stick with soft white or neutral colors and have a professional finished
product. However, paint spatters on windowpanes and floors has a negative impact.
Consider painting the outside of the house to create a great first impression
but new carpets, scraping floors, and other major improvements are risky.
Your real estate agent knows what is best for your neighborhood and can make
meaningful suggestions on what to fix for the best results.
How do I sort out the callers from the curious and the cranks?
If you are attempting to sell your home by yourself, take some precautions.
When you open the home to possible buyers, accept the fact that many people
will be just "lookers." You can minimize these by showing your home
only by appointment, giving you a chance to question a prospect on the phone.
Avoid setting appointments late at night or when you will be alone at the property.
Obtain the prospect's telephone number and call back to confirm the appointment
before making a commitment to show the house. If you can view the front of
the house easily from the inside, get in the habit of jotting down the visitor's
license plate number before they knock or ring the bell. Don't allow prospects
to tour the home unsupervised and be wary of unusual questions about how many
adults are in the residence and their work schedule. Caution children, again,
that they do not open the door to strangers.
Sould I help the buyer arrange financing?
Often financing is more important to the buyer than the actual selling price.
Realtors work with area lenders to propose various financing plans. This enables
a buyer to pick and choose the down payment and monthly payment amounts. If
you're choosing to market the property by yourself, contact home loans providers
and develop financing options on your property for your property for your prospects.
If you are able and interested in participating in the financing for the buyer,
it is an option that may facilitate a sale. However, it also places you at
risk. We suggest that you discuss this with your legal and/or financial advisors.
With today's low down payment programs, low interest rates, and large supply
of funds, the need for seller financing is diminished. Ask yourself, if a bank,
savings & loan, or other company that specializes in mortgages doesn't
want to finance this transaction, how safe an investment is it for me? Financing
is another area where a Realtor can assist you anf your potential buyer. The
real estate agent works with lenders on a daily basis. They are aware of market
conditions and are up to variety and popularity of numerous financing packages.
What is escrow and how do I arrange it?
An escrow holder is a safe depository of documents and funds until the conditions
of the buyer and seller have been met and the property is transferred. Simply
put, Escrow Officers take care of the paperwork. There are a number of very
important tasks which must be accomplished before a sale is complete. For example,
just a few are listed below:
- obtain demands from exiting lender
- payoff exiting loan and approved expenses such as inspection reports
- prorate taxes, fees and rents
- obtain title insurance, homeowners' insurance and disclosure reports.
The escrow process coordinates the various demands of the transaction and provides
the principals, buyer and seller, with their own complete accounting of debits
and credits at the close of escrow.
Why should I talk to a real estate broker?
Selling a house has become more complicated.
For the Buyer -
Seeing and choosing the property takes a lot of time, the one commodity most
of us don't have in abundance. A Realtor will focus on the neighborhood; amenities
and price you're looking for, then show you those properties that most closely
match your needs. Buyers rely on the Realtor to structure an offer with the
down payment, monthly payment, and other terms that they want and explain the
contract in language they understnad. They trust that they will not be exposed
to unusual risks or liability when they sign the purchase agreement, a multiple
page document.
For the Seller -
Finding buyer - most people need assistance in realizing the "American
Dream," from making an offer on a property to filling out the loan application.
If you are attempting to sell your home alone, many of the Realtors who are
working with buyers for your area, may not know and show your home because
it falls outside their databank of available inventory.
The Sale -
The state now requires that a seller disclose known facts about the property
in a formalized manner. A Realtor will help you meet these various disclosure
requirements. They may suggest you purchase a Property Disclosure Report (PDR)
from First American's subsidiary, Property Data Services, Inc. to satisfy the
natural Hazards Disclosure requirement. Sellers have also benefited from buying
a Homeowners Warranty to pay for replacement and repair of specified items
in the home that break after escrow is closed. First American's Homeowners
Warranty has set a standard of excellence in the marketplace with the largest
group of exceptional service for home repair.
The Buyer -
Lenders offer a large variety of loan products enabling more people to afford
to buy a home so many choices can be overwhelming. When you list your home
with a Realtor you are tied into a network of services and knowledgeable professionals
that cost nothing until the results you want is achieved - the sale of your
property. You harness a vast resource of market knowledge and negotiation expertise
to expose your property to the most likely new owners. And, you can rely on
the Realtor to assist you in understanding and completing all the new requirements
in the real property transfer process.
What is title insurance and why do I need it?
Most probably, when you purchase your home, the title was insured. If your
buyer wants to finance the property, most lenders in California will insist
in title insurance to safeguard against loss if there is a flaw in the title.
A good title insurance company researches the title and in-sures it until the
next sale, all for a small one-time charge.
Do you really own the property?
Title insurance protects you in almost all disputes over ownership. Wrapped
up among the numerous charges known as closing costs when you buy or sell property
is a charge for title insurance. There is no law that says you have to have
it, but if you want to finance any real estate tranaction, California lenders
may insist upon it. Even without a lender, both the buyer and the seller of
any property are well advised to take out title insurance coverage to protect
their interests in the property.
One reason goes back in history to when this state was part of Mexico and a
colony of Spain. Much of the land granted to settlers was without paperwork
that can be traced t oday, leaving the risk of disputed claims and legal entanglement
into modern times. But there may be other legal flaws in the title for very
American reasons.
A deed of sale by a previous "owner" may have been a forgery or signed
by a minor. A onetime owner may have been legally incompetent to excute a deed.
The deed may have been signed with a power of attorney after the owner had
died. There may be people with a legal claim to part of the property because
of a divorce or because a child was born after the execution of a will. Or
there may have a legal judgment or levy on which the title is dependent.
Any of these can void the title, leaving you not only without the property
but also with additional costs to pay.
When you insure through First American Title San Diego, we insure that the
property is yours. We search and examine records of all the other transactions
that have ever taken place in San Diego County going through decades of records
and ton of documents in our computerized title plant.
First American Title San Diego then insures that the deed is good. We insure
you against loss if ownership is disputed, through First American Title Company.
Their nominal one time charge is based on the value of the property, and the
protection remains in force until the property is sold again. First American
Title Company San Diego also offers the Eagle Policy which continues to provide
you with protection against loss should a claim arise after you've sold the
property.
First American Title San Diego, one of the leading title companies in San Diego
County, would like to be your preferred provider of services whenever you enter
a real estate transaction. We hope this information has been of value and you
will let us provide exceptional service for your next real estate transaction.
If you want more infromation, give us a call or ask your real estate agent
or escrow officer.
Courtesy: The First American Title Co.
