Frequently Asked Questions
Frequently Asked Questions about Selling
Frequently Asked Questions about selling a home in Massachusetts. Covering everything from getting your home ready to the worst mistakes sellers make. Definitely information you can't afford to miss.
How should I prepare to sell my house?
You need to start by taking a close, objective look at the property. Walk around the exterior with a pad of paper and write down EVERYTHING that needs to be done to make the house look it's best. Do the same inside and then sit down and determine how much time and money you can put into making the property most appealing to perspective buyers. You may want to consider putting some of your belongings in storage to open up some space in the rooms and closets.
This is usually one of the most difficult aspects of selling and sometimes it helps to have an unbiased point of view. If you would like me to go through your house with you and give you an idea of what would make you home more salable, give me a call at (413) 535-8610 or e-mail email@example.com
How is an asking price determined?
Asking price is usually set using a Comparable Market Analysis or CMA. This method uses location, recent sales for comparable homes, quantity and quality of properties both currently on the market and sold, and even listings that have expired, to determine a reasonable price.
Similar homes For Sale now show what we are competing against. Similar homes Sold recently tell what buyers are willing to pay for a home like yours in this area at this time. The expired listings represent the problems of over pricing. The desired result is to find a price that will attract a qualified buyer in a reasonable amount of time.
If you'd like some more information on pricing your home for sale, call me at (413) 535-8610 or e-mail firstname.lastname@example.org
What is the difference between an appraisal and a CMA?
An appraisal is performed by a certified appraiser who uses comparable homes in the area, condition of the property, etc. to determine an official value. An appraisal usually ranges in cost between $350 and $500.
A Comparable Market Analysis (CMA) is usually done by a Real Estate Agent and uses many of the same factors (comparable properties, condition, etc.) to determine an estimated value. A CMA is almost always performed free of charge.
What is the difference between sales price and assessed value?
The selling price of a home is the value placed on it based upon other home sales in the area, condition of the property, and other factors.
The assessed value of a home is estimation used by the city to determine your property taxes. Assessed value has no bearing on the market value or sales price of a property.
Should I price my home high for a little while to see what happens?
If a property is overpriced, it has a tendency to sell other homes in the area, all the while keeping your property on the market longer and losing the initial interest of buyers. Homes that remain on the market for a long period of time almost never get shown. Buyers are interested in something that is new and if a property sits on the market for a long time, they wonder what is wrong with the house that kept it from selling, even if the only thing "wrong" was an inaccurate price.
If the property is priced right the first time, it will usually give the biggest profit.
What repairs should I make before selling?
While you want to be sure your home is as appealing to potential buyers as possible, you need to be careful not to overextend yourself on repairs before selling. Too often a homeowner will invest huge amounts of time and money in repairs just to realize that much of that money will not be recouped in a higher sale price.
If you'd like some tips on what repairs would be best for your home, call me at (413) 535-8610 or e-mail email@example.com
Is it better to make repairs before I sell or lower the price for the buyer to do them?
Certain repairs can bring you a return on your investment. Others, however, regardless of how much you spend, won't add any value to the property. A couple of improvements that do usually bring added value are kitchens, bathrooms, porches, and the exterior. It is very important before you do any repairs to be sure that the money you spend will be reflected in equity.
In some instances, lowering the price for the buyer to make the repairs can open up your home to more buyers who may not be able to afford the home when completely fixed-up, but can put time and effort into the project.
Explain the difference between a "Buyer's market" and a "Seller's market."
A "Buyer's market" is when there are more homes for sale than buyers looking for homes. In this instance, the buyers have an advantage, because they can pick a house and the seller will want to meet the buyer's terms in order to get the property sold.
A "Seller's market" is when there are more buyers looking than homes for sale. Here, the sellers have the advantage because several buyers may be trying to buy the same house and they will most likely meet the seller's terms to get the property.
How can I sell my house in a slow market?
There are a number of creative marketing strategies to use in a slow market. The biggest factor during these times is making sure your home has the most exposure possible to potential buyers.
If you'd like some ideas of how to make your home sell more quickly, give me a call at (413) 535-8610 or e-mail firstname.lastname@example.org
How do I get my home ready for showings?
You may want to keep some cleaning supplies convenient to take care of any quick "sprucing up" before a showing. Make sure floors and tables free of clutter, beds are made, and pet areas clean and odor-free.
Whose obligation is it to disclose information about a property?
It is the ultimately the seller's obligation to disclose any known defects or other pertinent information about the property to an agent or a potential buyer. As a licensed Real Estate Agent, I have an obligation to pass along any information I have regarding defects in the property, as well as other facts that may affect the value or salability of a home to a prospective buyer.
Is a pre-approved buyer better than a pre-qualified one?
A pre-qualification is a letter from a lender stating that, based on income and a rough idea of expenses, the buyer may qualify for a certain loan amount. A pre-qualification is not a guarantee that they will be able to obtain financing, it is solely an estimation of what they can afford.
A pre-approval means the buyer has already submitted a loan application and most of the necessary paperwork to obtain a mortgage. The loan has already been approved, subject to finding a property that appraises for that loan amount.
Pre-approved buyers, therefore, have a distinct advantage when making an offer on a property. Most sellers are more likely to accept an offer when they know the buyer will not have a problem getting a loan.
Are verbal offers legally binding?
Verbal offers to purchase Real Estate are not accepted in Massachusetts. All offers must be made in writing. In most transactions, a pre-printed form known as an Offer or Agreement to Purchase is used.
What happens when a buyer makes an offer?
When you receive an offer from a buyer, you have three options. You can accept the offered price and terms, you could counter the offer with a price or terms that are more acceptable to you, or you could reject the offer altogether.
You can rest assured that when I am working for you, I will always be there to assist in determining what will fit your needs the best.
What if the offered price isn't what we wanted?
If we determine that the price offered just can't be accepted, we can counter. Making a counter offer is a part of negotiating. Or if the offer doesn't even look remotely good, then we can merely reject the offer. But no matter what happens, I will always explain your options to you.
What contingencies are usually put in an offer?
Most offers include two standard contingencies: an inspection contingency, which allows buyers to have professionals inspect the property to their satisfaction and a financing contingency, which makes the sale dependent on the buyers' ability to obtain a loan commitment from a lender. If the seller is to make any repairs to the property, they should also be written into the offer, along with any other specific arrangements made between the parties.
What is a home inspection contingency?
A home inspection contingency allows buyers to have professionals inspect the property to their satisfaction before proceeding with the purchase.
If the buyer is dissatisfied with the results of their inspection, there are several options, depending on how your contract is worded. They could accept the price & terms as you originally agreed and make the repairs once they own the property, ask the seller to make some of the repairs, renegotiate the price based upon work needing to be done, or back out of the transaction altogether.
What is a mortgage contingency?
A mortgage contingency is a stipulation that makes the sale dependent on the buyers' ability to obtain a loan commitment from a lender. If a commitment for loan cannot be obtained by the specified date, then the parties can either sign an extension to give the lender more time to approve the loan or withdraw from the purchase and the buyer's deposit is refunded.
Am I obligated to disclose the terms of other offers to a prospective buyer?
No, you are not obligated to disclose information about other offers to a prospective buyer.
What is an "earnest money" deposit?
A serious buyer will put down an "Earnest Money Deposit" as a show of good faith. This shows the seller that they are "earnest" in their interest to purchase the property.
Who pays the fee of a buyer's agent?
A buyer's agent has a contract with a buyer which states that the agent will help the buyer find a home for a specified fee. The responsibility to pay a buyer agent's commission ultimately lies with the buyer, however, in most cases the fee is the portion of the overall commission normally received by the selling agent. Although infrequent, should it be in excess of the customary selling agent’s fee it is worked into the purchase price of the home and deducted from the proceeds at the closing.
What is a Purchase and Sale Agreement?
Usually signed about 10 days after the Agreement to Purchase (the “offer”), the Purchase & Sale Agreement (commonly referred to as P&S) is a form that expands the initial Agreement to Purchase in detail. It covers in specific detail, such items as mortgage contingency, condition of the property, deadlines for loan commitment and closing date, and details of any other arrangements that have been made between the parties.
What if I decide I want to change something in the contract?
Additions, deletions, or changes of any sort to these documents can be made as long as they are agreed upon in writing and initialed by all parties.
What happens if the bank appraisal is too low?
If a bank appraisal comes in too low, there are several options. You could hire an independent appraiser to do a second opinion and submit a copy to the lender, you could lower the sale price of the property; or you could work out an arrangement with the buyer to pay for some of the buyer's closing costs or other fees in order to balance out the difference between the sale price and appraised value.
What happens if the buyer's loan is not approved by the deadline in the contract?
If a commitment for loan cannot be obtained by the specified date, then the parties can either sign an extension to give the lender more time to approve the loan or withdraw from the purchase and the buyer's deposit is refunded.
What happens if the buyer's loan is denied?
If the buyer's loan is denied, they must notify you in writing before the deadline in your contract in order to keep from forfeiting their deposit. In some cases, you may consider signing an extension for the time for commitment if the buyer feels they will be able to get a loan approved through another lender.
Should I keep making my mortgage payments if I'm selling my home?
Yes. You should not stop paying your mortgage because of the sale of your house. Mortgage payments include interest for the previous month, so, for example, your April mortgage payment pays the interest for the month of March.
If the scheduled closing date is around the same time your mortgage payment would be due, you should try to send the payment early. If you have not made your most recent payment, the funds will be taken out of the proceeds of the sale at the closing.
What is a final walk-through?
A final walk-though is an opportunity to for the buyer to walk through the property and make sure everything is the way you agreed in the Purchase and Sale Agreement. Any work that was to be done before the closing should be completed at this point, and if the property is to be delivered vacant, any tenants should have moved out. If there is a problem and things are not as you'd agreed, then arrangements can sometimes be made at the closing to remedy the situation. The final walk through is usually done within a day or so of the closing.
What happens at the closing?
At the closing, you will be required to sign a deed, and a several tax documents. The buyer will sign a mortgage, and a number of other legal documents. Once you've passed papers, you will receive a check and give the buyer the keys, and they own the property.
What do I need to bring to the closing?
You will need to obtain a passing termite and wood-boring insect report, smoke detector certificate, and final water reading if appropriate and bring them to the closing. I can assist in obtaining these. Also be sure to bring any keys you have to the property.
What documents should I leave in the house for the new owner?
Any important documents such as any warranties or owner's manuals on appliances that are staying in the house. Also, information on the heating system, water heater, roof repairs, new windows, or anything else you can think of will come in handy for the new owner once they take possession of the property.
What are some of the worst mistakes home sellers make?
Overpricing can keep your house from selling, even after the price is reduced. Buyers are most attracted to homes that are new to the market. If a property hasn't sold after a while, many buyers won't be interested because they feel that "something must be wrong with the house or it would have sold by now."
Restricting your forms of marketing can be very detrimental to the sale of your property. Be sure your home has the most exposure possible to the marketplace in order to attract the best, most qualified buyers.
Over-improving a property can cost you valuable time and money. Be careful not to overextend yourself on repairs before selling. Too often a homeowner will invest huge amounts of time and money in repairs just to realize that much of that money will not be recouped in a higher sale price. It is very important before you do any repairs to be sure that the money you spend will be reflected in equity.
Not listening to a professional's advice can keep your home from selling quickly. As a licensed agent, I know how the real estate market works. I've been trained in determining what will make a property sell quickly, and give you the most return.
If you've been considering selling your home, give me a call at (413) 535-8610 or e-mail email@example.com
Jim Lumley, Realtor