For Sellers
What I will do for you
Getting the highest price
Closing Costs
- Complete a comparative market analysis that will compare your home's value to that of your neighbors.
- Compile a comprehensive plan detailing all the efforts I will employ to sell your home, including Internet and local media.
- Present your home to as many qualified buyers as possible getting your home maximum exposure.
- Help you stage your home and generate curb appeal to ensure you get the highest price.
- Assist with obtaining offers and help you in negotiating the best deal as smoothly as possible.
- Help you find your next home and answer all of your questions about the local market area, including schools, neighborhoods, the local economy, and more.
Getting the Highest Price for Your Home
Curb appeal is key and could make a difference whether people stop and take a flyer, or drive right by. Here are a few tips to increase the curb appeal of your home. Staging your home is important. Many buyers will stay in your home longer if it's staged appropriately. I have compiled some ideas to present your home in the most effective manner.
- Title insurance fees depend on the sales price of the home.
- Broker's commission is a full-service fee and will cost anywhere between 6% to 10%.
- Local property transfer tax, country transfer tax, state transfer tax, and state capital gains tax are the charges that you'll pay for the privilege of selling your home. Credit to the buyer of unpaid real estate taxes for the prior or current year are variable and depend on when you close and when your taxes are due. In Arkansas we pay one year in arrears.
- FHA fees and costs are now negotiable between an FHA buyer and seller.
- Home inspections fees are in some circumstances paid for by the seller and include pest, radon and other inspections.
- Miscellaneous fees can accrue from correcting problems noticed during the home inspection. Typically a maximum limit is set in the contract.
Tax Implications of Selling a Home
Selling a home can have a major impact on your federal and state tax returns. Check with your tax consultant on the factors that may affect taxes resulting from the sale of your home. For example:
- Whether you purchased the home or acquired it by gift or inheritance
- Whether you used your home partly for business or rental
- Costs associated with selling your home
- Home improvements or additions, which may help to offset capital gains
- Gain from the sale of a prior home on which tax was postponed prior to the enactment of the federal Taxpayer Relief Act of 1997
The federal Taxpayer Relief Act of 1997 says when you sell your home you can keep, tax free, capital gains of up to $500,000 if you are married filing jointly or $250,000 for single taxpayers, or married taxpayers who file separately. To qualify for the exclusion, you must have used the home as your principle residence for at least two of the prior five years. It is not a one time tax exclusion. You can use the exclusion as often as you meet the qualifications.
The federal Internal Revenue Service Restructuring and Reform Act of 1998 further clarified the law and says you can prorate the $500,000/$250,000 exclusion (not your specific gain) if unforeseen events, such as a job change, illness, or some other hardship forced you to sell before you meet the two-year residency requirement.
Many, but not all federal tax benefits are also available from state tax departments. Be sure to discuss your move with a tax professional familiar with state tax rules, especially if you are moving from one state to another.
Details of a Listing Contract
Obviously the name of the seller and the property address will be included in the listing contract. There are many other things that are included, too, and you should be aware of them. This should be covered in detail prior to you signing a listing contract.
Price and Terms of Sale
When setting the terms of sale, is it price, timing or convenience that is most important to you? You probably have a basic idea of what your home is worth by keeping track of other sales in the neighborhood. Exercise great care in determining your asking price, making sure not to set it too high or too low. In addition to the price, you will disclose what personal property, if any, goes with the house when you sell it. Personal property is anything that is not attached or fixed to the home, such as washers, dryers, refrigerators, and so on. There may be some item that is considered "real property" that you do not intend to include in the sale. Real property is anything that is attached to the home. For example, you may have a chandelier that has been in your family for generations and you take it from home to home when you move. Since the chandelier is attached to the house, it is considered "real property" and a reasonable buyer would normally expect it to go with the house. This would be considered an exclusion and your REALTOR should state it on the listing contract and the MLS system for disclosure purposes.
Lockbox - Yes or No?
A lockbox is basically a padlock with a cavity inside where a key to your home can be placed. Only someone with an electronic key or the combination can get into the lockbox and access the key. Having a lockbox available at your house makes it easy for other agents to get access to your house.
Without the lockbox, agents representing buyers would have to set appointments to meet you or your agent at the house so they could gain access and view the home. This would be inconvenient. Since almost every other house does have a lockbox available, if you do not allow one most agents will simply not show your property. You will miss out on potential buyers.
The listing contract specifies whether you allow a lockbox or not. It is locked into place, usually on the front door and cannot be removed. Only other agents can access the key that is located within the lockbox.
Real Estate Commission
In most areas there is a "customary" percentage that real estate agents expect to earn as a commission. Usually, it is six percent of the sales price. In some areas it can be as high as ten percent. However, just like anything else in real estate, this amount is negotiable. When completing the listing agreement, you and your agent will agree on the amount of the real estate commission.
The listing contract also specifies when the commission is earned. If a buyer presents an offer that meets your listing price and terms, the agent has effectively earned the commission. If a buyer presents an offer and you reach agreement on price and terms through counter-offers, the agent has also earned his or her commission.
Agency Duties of a Listing Agent
The listing contract will specify that your agent is acting as a "seller's agent." This means that, in the sale of your house, they are working for you and only you. However, there may be times when your listing agent has a client who wants to buy your home. If your agent also represents the buyer, the listing contract should specify that they provide an additional disclosure that details their duties as a dual agent. In Arkansas, at the time the listing contract is presented, you will be given the option of allowing your agent to act in dual agency or not. This is your opportunity to question your agent and make sure that you understand seller agency and dual agency.
Avoid the Urgent Sale
Have you ever experienced a situation when urgency became a top priority? Perhaps you planned to drive to the airport to catch an early morning flight. To your surprise at five in the morning, your car battery was dead, it was raining, and there was no one available to drive you to the airport.
You felt the urgency, the pressure to accomplish an objective under adverse circumstances. You may have run three blocks in the rain to catch an airport commuter bus, missed it, then hailed a taxi and paid a substantial fare to arrive on time. Your urgency caused you to suffer great inconvenience, stress, and to spend money unexpectedly. You caught your flight - and paid the price.
To sell your home at the best possible price, avoid urgency whenever possible. Your home is a valuable and quite marketable asset. You can depend on receiving a "fair market value" price for it if you allow enough time for a sale to occur.
Although real estate is a "marketable" asset, it is not necessarily a "liquid" one. The term "liquidity" means "the ability to convert an asset to cash, quickly and with little or no loss in value". While there is always a market filled with home buyers, it is generally understood that a home must be exposed to a wide range of potential buyers over a reasonable length of time to locate a buyer willing to pay full "fair market value".
Conversely, if urgency dictates a fast sale in a limited time period, the owner can expect to "pay the piper" by accepting a lower than anticipated price on less than desirable terms. The key thought is that "urgency" usually translates into a compromise of price, terms and/or convenience.
To achieve financial satisfaction when selling your home, plan ahead. Time the marketing of your home so that you will not feel pressured to sell. Discuss with your REALTOR the details of potential repairs and get advice to repair/replace at the listing appointment. It just may not be necessary. Then, be prepared to wait for the right buyer!
Choosing the Right Price for Your Home
A "listing" is a contract that authorizes a licensed real estate agent to represent a seller in the sale of their property. The agreement outlines general terms, conditions, and commitments between the seller and the agent, including:
- Price and terms
- Duration of listing
- Property description, including items that will transfer with the sale
- Commission or compensation to the real estate agent
- It is always wise to consult an attorney before signing any legal contract.
Price and Terms
The listing states the price at which the owners are willing to sell, as well as any other terms that are pertinent to the seller's situation. In selecting a price, the seller should review comparisons provided by the agent that review similar homes on the market, similar homes sold, and similar homes that were listed but did not sell. This "Comparative Market Analysis" presents comparable homes in a format that assists the seller in identifying a price range as well as an actual target price. It is extremely important that the price be set at a level that is close to or exactly at the point where the analysis, as presented by the real estate professional, indicates the home will sell. Many sellers make the mistake of setting a price that is too high, and the results are often very costly.
Here are common assumptions made by sellers in selecting prices that are above market conditions:
Seller's Reasoning: "Let's just try it at the higher price for two weeks, then drop it if we don't see an offer."
The Challenge: This is the information age. You can safely assume that today's buyer is well informed and price sensitive. A property that is priced over the market will deter buyers who are serious about finding a property. If a buyer has to begin the negotiation with an offer that is way off the listed price, they can assume that their offer will be turned down or countered. They will look elsewhere where the chances of a successful offer situation are greater.
Seller's Reasoning: "Let's just try it a the higher price for two weeks, and then drop it if we don't see an offer."
The Challenge: When a home goes on the market, there are already buyers in the market who are actively looking. These individuals are eager to be made aware of any new properties listed. If the listing is overpriced but the buyer still has an interest in the house, he will either wait for the price to drop or will offer well below the listed price. Either circumstance is unfortunate for the seller. The seller is committed to holding out during this period of time just to test whether the higher price might work. In the meantime, their best buyer is either waiting for the anticipated price drop (and continuing to look at other properties) or is submitting an offer that the seller will reject while they wait to see who else is out there. The general rule, reinforced time and again with actual experience, is that your best offer is the first offer you receive.
Listing at a temporary price simply delays your sale. The market sets the price, so it is likely your price will end up the same regardless of your trying the higher price. What is lost with this approach is time.
Seller's Reasoning: "We have all of the time in the world. Let's price it above the market and hope the market catches up."
The Challenge: There are two issues at play here. First, the fact that the seller is not in a rush to sell, is no excuse for pricing the property too high. It still won't sell! Why not wait a few months, enjoy your privacy, and put it on when there is a need to sell. Houses that sit for months on the market acquire a reputation for being overpriced and not worth showing. People will conclude that there must be something wrong with it if it has been on the market for so long. Real estate agents will show the newer listings before taking their buyers to something that obviously does not beckon to be sold.
Second, it is never wise to set a price according to what a market might do. The things that effect real estate markets such as wars in other countries, stock market crashes, unexpected layoffs, and natural disasters are rarely anticipated but can dramatically shift home prices. Don't count on stability when selecting the price. Choose a price according to today's market and then adjust quickly as circumstance change.
Inspection Checklist for Getting Ready to Sell House: Exterior
- Mow and tidy lawn- (trim edges, gather/tidy hose, rake leaves, water lawn, weed flower beds, stack firewood)
- Walkways/Paths- (clear obstacles, replace stone/edge, clean debris, weed cracks/edges, level blocks/stones, if winter shovel snow)
- Patio Area- (clean patio furniture, weed cracks/edges, clean patio stones, cover barbecue)
- Garbage Area- (place lids on cans, replace old cans, clean area)
- Exterior Walls- (clean siding/stucco, repoint mortar joints, repaint/restain if needed)
- Windows/Doors- (clean sills, fasten shutters, clear window wells, replace broken pane)
- Exterior Lights- (replace light bulbs, clean/replace fixture, secure fixture)
- Garage- (organize work area, clear driveway, lubricate door, box excess materials, clear garage floor, coat driveway)
Inspection Checklist for Getting Ready to Sell House: Interior
- General- (dust/vacuum, clean walls/baseboards, mop/sweep, replace light bulbs, clean windows/doors, replace broken fixtures, repair leaky faucets)
- Entrance/Foyer- (organize closet, remove shoes/boots)
- Living/Family- (organize clutter, adjust fireplace screen, organize closet, clean fireplace, polish furniture, clean/shine hearth)
- Kitchen- (clean all appliances, clean cupboards, clean counter, clean/polish sink, remove counter clutter, remove dishes from sink)
- Bedrooms- (make beds, organize closets, tidy dressers)
- Laundry Room- (clean laundry tub, place laundry in hamper)
- Basement- (dust hot water tank, remove dust-balls, organize clutter, remove cobwebs, ventilate, (open windows)
Ready for Sale - Beautifying Your Home
- Replace House Number- Brass
- New Doormat and/ or Wreath at Front Entry
- Add Fresh Layer of Mulch to Flowerbeds/ Trees
- Add Potted Plants or Hanging Baskets to Deck
- Borrow Lawn Furniture if Need be
- Shoe/ Boot Tray at Front Entry
- Remove Sickly Plants
- Place Linens on Dining Room Table and Server
- Put Away Small Appliances
- Place Bowl of Fresh Fruit on Kitchen/ Dining Table
- Use Flowers or Flowering Plants in Various Rooms
- Build a Fire for Open House or Showing
- Open Book on Coffee Table and/ or Night Stand
- Arrange games in Play Area
- Add New Throw Rugs in Various Rooms
- Use Scented Soaps and Candles in Bathroom
- Purchase and Display New Towels in Bathroom
- Add New Toss Cushions on Bed or Sofa
- Pack and Store Seasonal Items
- Tidy Project in Workshop and Leave on Display
- Prepare As For A Party, Spic and Span
What to do when the realtor calls...
General
- Ask Realtor for 1 hour
- Open all Drapes/ Curtains, Blinds
- Open all Doors and Windows (weather permitting)
- Boil Cinnamon/ Vanilla Sticks
- Vacuum/ Sweep all Floors
- Turn-on Furnace Fan
- Put Car in Garage
- Close Garage Door
- Double check Kitty Litter Box
- Be aware of pet odors and diminish
Bedrooms
- Make all Beds
- Place Miscellaneous Items under Bed
- Close Closet Doors
- Place Laundry in Hamper
Bathroom
- Clean Sink/ Tub/ Shower
- Clean/ Tidy Counter Top
- Clean Mirror
- Organize Towels
- Turn-on Exhaust Fan
- Shake-out Bath Mat/ Rug
- Put Toilet Seat Down
Living Area
- Turn-off TV and Turn-on Radio playing Softly
- Put pets out of way or take with you if possible
- Tidy Sofa and Fluff Pillows
- Tidy Newspapers and Magazines
- Clean coffee Table/ End Tables
- Empty and Remove Ashtrays , spray air fresher
Kitchen
- Remove Dishes from Sink
- Place Dishes in Dishwasher
- Run Dishwasher
- Clean/ Polish Sink
- Clean/ tidy Counter Top
- Clean Stove Top and Refrigerator
Basement
- Turn-off Furnace Fan
- Organize Clutter
Lastly
- Turn-on all Lights in the House
- Dispose of Cinnamon/ Vanilla sticks
- Turn-off Exhaust Fans
- Leave the House if Possible
