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Understanding The Home Selling Process!
Lease Back Options
Certain sellers may have delays with occupancy of their new home and need to maintain possession of the home for a month or two after close of escrow. Many sellers do not understand that it is possible to rent back the home to the buyer for a short period of time. Typically the rent is a function of the buyers interest, taxes and insurance costs during the proposed rent back period plus a security deposit. Escrow can even pay the rent in advance from the escrow proceeds.
This can provide a level of security to a homeowner who does not have complete control over their up-leg purchase. Keep in mind that this must be negotiated in the original purchase agreement. Leaseback concessions which exceed one to two months will most likely have an impact on your homes purchase price.
Tax Consequences
Generally speaking, married couples can exclude $500,000 and singles can exclude $250,000 of taxable gain if they can prove occupancy of the property as a primary residence for a 24 month time period within the last five years. Thus, if you lived in the home for two years, than rented the home for two years, the exclusion is still valid. However, if you continue to rent the home for a total of four years out of the last five the income tax exclusion expires and the property is subject to long-term capital gain. Ask your tax advisor to carefully review your situation.
Prepare Your Home For Sale
The 8 best ways to prepare your home for sale:
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Remove your valuables
Remember, in order to increase your homes chances of achieving top dollar, you are going to be subject to general public foot traffic. Easily removed items such as jewelry should not be left in your home in conspicuous places.
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Remove the clutter
You are going to have to pack sooner or later so you might as well start by packing up items which cause clutter such as: knick knack decorations, excess furniture, etc. A crowded home will appear smaller than it is. Remember less is more.
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Control the animals
We all love our pets, but it can be intimidating to a buyer to walk in a home and be harassed by a large barking dog. Many transactions are thwarted by our pets. Remember, it is a huge inconvience to sell a home. But you could stand to lose thousands of dollars if you don’t control or remove animals from a home during peak showing times.
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Paint
Most painting is inexpensive and it will go a long way to adding appeal. Remember, while wood paneling may have been great twenty years ago it is not today. I have experience with the latest trends in colors and am happy to help assist.
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Focus on the front
The term curb appeal has long been used to describe the feeling a buyer develops in the first 5 seconds. If you have bad curb appeal you will have a tough time attracting top dollar buyers. If you have a limited budget, even simple little things like adding colorful flowers to the front yard, or trimming back brush and trees can do wonders.
Hundred dollar musts:
- Paint your front door. Use a semi-gloss or gloss color that makes your door stand out.
- Get the lawn green- Fertilize, water, and mow the lawn to get it green.
- Add colorful plants. You can buy plants for less than $2 to add to the front of your home.
- Pare back or remove trees. Less is more. Strive to gain maximum sun exposure.
- Stain or paint fences. Poor fencing provides a bad “frame” of view for your home.
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Eliminate odor
Nothing turns off a buyer more than a home smelling of animals, cigarettes, or other water damage. If the home is older, you probably will have to replace carpets. If you try and sell a home in this condition you will be placed in the fixer upper category and probably forced to sell at a discount. This is why many new home models display potpourri or vanilla.
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Don’t sell vacant if you don’t have to
Model homes are furnished because the builders understand home merchandizing. Furnished homes can appear larger and more inviting than vacant homes. If you move out before your home is listed, see if you can leave behind a few larger pieces of furniture. If you have a luxury home, I offer staging services to provide furniture during the listing period.
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Use a lockbox
Delivering full access for today’s busy homebuyer is very important. Sometimes buyer agents show homes they did not plan on showing a buyer as they learn about their client’s preferences during the tour. If you have a lockbox, many of these buyers can then gain access to your property. I use computerized lockboxes that can be programmed to deny a key during certain hours. In addition, a complete log of all agents is maintained by the lockbox device to maximize security.
What influence do Realtors have on the price of my home?
The answer is very little. Below you will find listed the major items that influence your home sale and who controls the item:
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Price
The buyers dictate home values. A homeowner can set any price they choose, but the home is not sold until a willing and able buyer agrees to a certain price and completes the transaction. Factors influencing buyers ability to pay top dollar for a home include: interest rates, personal income growth, tax laws, consumer confidence, etc. The seller and the real estate agent have no control over these underlying economic issues. The real estate agent must be able to help the homeowner set a reasonable expectation of asking price or risk having the home be ignored by the market.
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Location
Your property's location is not subject to change.
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Condition
The condition of your property will have a huge impact on your ability to sell your home. This is under the home sellers direct control.
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Ease of Showing
The ability for buyers to access your home is critical to building a sense of competition between buyers early in the listing period. If the home is difficult to show (no lockbox, large dogs, etc.), you will be limiting your ability to attract buyers. Again, this is under the home sellers control.
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Exposure
Like any product for sale in this country, the more exposure your home receives; the larger pool of buyers will be reached. Obviously, when a home reaches a great number of prospective buyers, competition for the home intensifies and the home will sell at its highest potential value.
In summary, each party (Seller & Agent) has an influence over the ultimate sales price received. List your home with me, and I'll professionally promote your home, and advise you on the rest.
Closing the Transaction
Buyer’s Inspection Report
Sellers should realize that just about every buyer is going to use a licensed building inspection firm to analyze the condition of their home. If you disclose upfront the known conditions and defects affecting the home, you will have a much smoother transaction and likely eliminate the chance buyers can use this report to gain further price reductions near the end of escrow.
When inspections find things that the buyer was not expecting, it is not surprising that they will demand purchase price credits or cancel the escrow.
This is exactly why I complete an in depth walk through the seller's home, prior to listing the home. This way we can get a head-start on some of the obvious things that will need to be repaired or replaced, prior to opening escrow. My goal is to help you have a smooth home sale, so you can focus on your family and your new property.
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