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Frequently asked questions of sellers
Should I hire an agent?
Yes. Absolutely, 100%, yes. This may be even more true of a statement for sellers than buyers. Today's marketplace for real estate is online. 9 out of every 10 buyers start their home search online. And the best way to get your house online is to hire a professional real estate agent. They will have access to the local Multiple Listing Service (MLS), which syndicates your house everywhere online. Just posting your house for sale on Craigslist isn't enough these days. Getting the maximum online exposure for your house will give you the best chance of bringing in an acceptable offer. Not to mention all of the other services that your agent will help coordinate for you, like setting and scheduling showings (so you don't have to publish your personal phone number online), and negotiating the contract and terms.
What are the steps involved in selling your house? The home selling process actually starts some time before your house hits the market. You'll want to first de-clutter your house, perhaps include a bit of staging, and basically just try to view your home through the buyer's eyes. You'll also want to make any crucial repairs to the home; things like structural or safety issues will be sure to come up in the buyer's inspection, so it's better to just fix those items now rather than later. Then, once you're ready to put your house on the market, your agent will prepare a myriad of marketing materials for your home. Then comes the tough part -- showings. Your agent will notify you when prospective buyers want to look at your house. You'll then have to plan to be away from the house so that the buyers (along with their agent) will look at the house. This can be a frustrating part of selling, as sometimes others' schedules don't coincide with yours, and you'll have to weigh the choice of re-arranging your schedule, or declining a potential buyer access to the home. Once you have a buyer wanting to submit an offer on your house, you'll choose to either accept, counter, or reject the offer. After reaching an agreed contract, you'll proceed into the contingency phase of the contract. The buyer may indicate in their offer to include an inspection and/or appraisal of the home; and if outcomes of those contingencies are not satisfactory to the buyer, you may re-negotiate or terminate the contract. Assuming all goes well, the buyer may have a few other contingencies, such as obtaining a suitable loan, homeowner's insurance, and more, and then you will proceed to closing.
What are the costs associated with selling my house?
There are a variety of costs to expect when selling your house. Firstly, if you hire a real estate agent for the transaction, you can expect to pay a commission fee. Commissions will vary, but are usually a minimal percentage of the purchase price. You can also expect to pay certain costs at the closing. Things like filing fees, recording fees, the title company's fees, any overdue utility or HOA payments, will all be due upon closing. You can talk to you agent, preparing a Sellers Net Proceeds Worksheet, to estimate fees you will have to pay, and how much you will take home from the sale.
Is there a best time to sell?
The real estate market does have a seasonal factor to it -- usually seeing higher number of sales during the summer months than the winter months. However, there is also a bit of a niche market for buyers during the slower winter months. Typically, buyers looking to purchase in the slower months tend to be more serious buyers, which could also be to your advantage. One caveat if you plan to sell your house in the winter months -- be sure to take some great exterior photos of your house during the summer months, when the foliage is lush and green. Those photos can help greatly market your house over ones with snow and/or dead foliage in them.
How should I determine my house's asking price?
This is a job best left for the pro's. Your agent can pull records of recently sold properties similar to yours and prepare a Comparable Market Analysis (CMA), which outlines what other similar houses like yours have recently sold for (and also those that did not sell) so that you can agree upon a thoroughly researched asking price.
Why does Zillow think my house is worth so much more?
Oh, Zillow. That fickle friend of ours. Zillow's "Zestimate" (and any other website's home worth estimations, for that fact) is just what it says it is -- an estimate. Zillow's algorithms, while very clever, are limited in the factors they can consider when pricing a home. Zillow does not have full access to all records, like a real estate agent would. In fact, Zillow has even reported that their Zestimate can be off as much as 20% in roughly 85% of the homes listed on Zillow nationally.
What are the dangers of overpricing my house?
A lot of different things could happen when you overprice your house. We've outlined them in a separate article for you, here.
What factors will influence the asking price of my house?
The most basic features of your house will have the most impact on pricing. Things like, the square footage, number of bedrooms, bathrooms, garage spaces, and any additional room spaces, will be the biggest factors. There are some smaller details that will help amp up the price of your house, such as new paint and carpet/flooring. Other more expensive upgrades, such as room remodels or additions, may not get you the most bang for your buck. A great website to use as a reference, if you're thinking of upgrading a few items, is the Cost Vs. Value site. This site tracks the popularity, and ROI of common home upgrade projects, so you can find projects that will add value to your house.
Should I make repairs?
On certain items, yes. Items that compromise the structural or safety of the house should be attempted to be repaired prior to selling. It's likely that a buyer's inspection would reveal such items anyways, which could greatly change the terms of the contract. But don't feel like you have to fix EVERY flaw with the house. Buyers have a certain level of understanding that the house will likely gain a little wear and tear over the years.
Do I have to disclose known defects?
Yes. If you've had a basement flood, or a leaky roof, you should fill out a Seller's Property Disclosure and disclose these facts up front. Again, it's likely that a buyer will find out any major faults of the house during an inspection anyway, but in the state of Colorado, sellers must disclose known defects. Additionally, if your agent knows about these defects, he or she is required by law to disclose such facts to buyers, additionally. Save everyone the trouble and just disclose known facts up front.
Do I have to sell to the highest offer?
No. You are allowed to choose any offer that is submitted for consideration. Sometimes, choosing a lower-priced offer could even be in your best interest if there are fewer contingencies included in that offer.
How quickly will my house sell?
Soon, hopefully, if you price it right. Pricing it right is the first step to getting your house sold quicker, but there are other factors to consider. Most real estate markets track an average days on market (DOM) -- which is a stat that is compiled from all houses in a region (sometimes even in a particular price range), averaged out amongst the number of days it takes for each house to sell. In desirable markets, the DOM tends to be less. In less desirable or uncommon markets, it tends to be higher. Be sure to have an expectation of what the local market's average DOM is likely to be when you prep your house to sell.