TimLordRealtor.com - Sellers

FAQ's

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What are the first steps to selling my home?

The first step is to make the house look appealing. If it needs new carpet or painting and you can afford the work, DO IT. If there are repairs that need to be made, get them done. Curb appeal is very important. Make sure the lawn and yard is well manicured. Flowers and potted plants always help. Oil stains and weeds in the driveway should be removed. When buyers drive through your neighborhood, you want to make sure they notice your house. If they like what they see on the outside, they will ask to see the inside.

Next have a Realtor® come and take a look at your house. Ask them to do a comparable market analysis. Realtors® will do this as a free service. They will research houses like yours that have sold in your neighborhood. What you want to see is what has sold in the past year and no longer if possible. Market conditions change rapidly.

If you are ready to put your house on the market, interview several Realtors® until you find one that you are comfortable working with. They will explain the selling process to you and work up a listing contract for you to sign. At this point your house will be put on the MLS and a "for sale" sign put in the front yard.

Is it a buyers market or a sellers market?

When there are more buyers than sellers, it is a sellers market. Sellers can demand higher prices, negotiate more and get it and create the burden for the buyer.

When there are more sellers than buyers, it is a buyers market. Buyers can demand lower prices, negotiate more and get it and create the burden for the sellers.

In the Metropolitan Indianapolis Area, it is now a buyers market. Typically in our existing market, 50 percent of the houses that are listed don't sell.

What does my agent do for their commission?

One thing you must remember is that the agent does not get paid unless they sell the house. They are out of pocket with all their time and expenses until closing. If they don't sell the house then all the expenses they have uncured are absorbed by them.

Do a Comparable Market Analysis of the house. Explain to the seller how to get the most money for the house. Do a listing presentation for the seller. Fill out the Listing Agreement and all related forms. Fill out the MLS form and take measurements of the rooms. Complete all the forms and get house on the MLS. Get pre-luminary title work done on property. Create website, flyer and marketing material for house. Answer all sign calls, answer questions and possibly show the house. Do Open Houses on a regular basis. Report activity to seller and answer all questions on a regular basis. Accept and review offers on the property. Advise seller on received offer. Help seller negotiate offer. Coordinate offer with buyer's agent. Make sure all time lines on offer are met. Make sure all contingencies are met. Coordinate and be at closing.

How does the buyer's agent get paid?

The seller pays the buyer's agent commission. When the listing contract is executed it spells out the commissions. Even though the commission is paid by the seller, the buyer's agent works only for the buyer.

What are the advantages and disadvantages of "For Sale by Owner"?

The advantage is the seller has complete control and does not have to pay real estate agent commissions. The disadvantage is that they have to spend all their time doing all the work and don't get their house listed on the MLS. Most "For Sale by Owners" eventually list their property with an agent.

Are there advantages to buying a home warranty during the sale of the home?

Yes! It use to be that home warranties were for the buyer. The warranty started the day of closing and lasted a year. Now there are home warranty companies that start when the house is listed and protect the seller from any unexpected expenses while selling their house. Then when the house sells it transfers automatically to the buyer and continues for one year.

Buyers love home warranties. When they buy a house, they don't want to be concerned about repairs the first year. They generally just want to move in and live. Home warranties cost about $400 a year with a small deductible on each service call.

What about lead based paint in my home?

If you home was built before 1978 the federal government requires that a lead based disclosure form be filled out. It asks if the seller is aware of any lead based paint in the home. If they are, they must disclose it.

What is my home worth?

The Realtor® can do a comparable market analysis on your home and determine its fair market value. Another way is to have an appraisal done. For about $300 an appraiser can determine market value. Remember, appraising is an art form and not a science.

Who set the list price of my home?

The seller always sets the price. If the Realtor® feels that the seller's expectations are too high, they can always walk away from the listing. It is not in the Realtors® best interests to take a listing that is priced to high. If the Realtor® takes the listing and it does not sell in six months because of price, the Realtor® looks bad.

Can I price my house higher than market value?

Yes you can but you probably won't sell it. Buyers see a red flag when they see a house priced over fair market value. Chances are that it will get less showings also.

Buyers generally have a price range when they start to look. Every house in the neighborhood might be shown to a buyer except yours because of the price. Buyers that are looking in your price range will compare your home to all the others they have seen in that price range. If yours is priced above market for no apparent reason, savvy buyers will know they can get more house for the money and look elsewhere.

It is best to price your house at market value.

Why should I fix my house up when I not going to be living there?

Why does a used car dealer make their cars all clean and shiny? They want to make their cars look appealing to the buyer. They will sell more and make more money faster.

If there were two houses that were identical in price, floor plan, age and lot, but one needed some repairs, new carpet and paint and the other one did not, which would you buy? The one that needed the work might get offers but they will probably be low ones. Buyers do not want to buy a home and have to do a lot of work on the home before they move in. Today's buyer wants to move in and live.

Do buyers like furnished houses better than empty houses?

It depends on the house. Buyers like to walk into a house and picture their furniture in the house. The less distractions the better. If you house is filled with furniture, tons of personal pictures on the walls and very little free space, this could be a problem for a buyer. Houses with minimal furniture and no personal effects distract buyers the least.

Is it better to fix things, have new carpet/paint or just give allowances to buyers?

If you can afford to have things fixed up before putting your house on the market you are ahead of the game. Otherwise giving an allowance to the buyer is fine. Chances are that the house will take longer to sell with out being fixed up first.

The buyer has made an offer…now what?

It is up to your agent to present you the offer and give you recommendations. A seller can do one of three things. They can accept the offer as is or put together a counter offer or do nothing and let the offer die at expiration. (Offers have expirations dates and times. If the seller does nothing until after the expiration, the purchase agreement is null and void.)

Your agent will recommend to you what is in your best interests to get the deal done.

What is earnest money?

Earnest money is sort of like a deposit on the sell of the property. In the eyes of Realtors® and sellers, the more earnest money you give, the more serious the offer. In a case where the seller gets multiple offers, the earnest money amount may be taken into consideration as to which offer to accept.

What happens during negotiations?

A seller who gets an offer has the option of writing a counter offer. Basically a counter offer is an acceptance of an offer except for the items listed on the counter. These items can be price, allowances, repairs, closing dates, closing costs, earnest money etc. The buyer then has the option of countering the counter. This can go back and forth many times until a deal is agreed to or until either the buyer of seller quits the process because they could not come to terms.

What is involved in the Home Inspection?

When a buyer and seller agree to a deal, it may be based on a home inspection not turning up any major defects. A home inspection company will go through all the components in the house making sure everything is in working order. Electrical outlets, water facets, windows, doors, heating and AC, water heater, stove, refrigerator, dishwasher, roof are just a few of the components. Some inspection companies bring in a laptop and a printer and furnish you with the report at the end of the inspection. Others send it to you a few days later.

On average the inspection lasts about two hours and the buyer is encouraged to attend. Inspections can be another point where negotiations are made.

What are the general time lines between an accepted offer and closing?

In general closings are usually 30-45 days after contract acceptance. Some deals can close as soon as 10 days and some deals take 2 months. Each deal is different. All dates for the timeline are spelled out in the purchase agreement. Most items are from the date of accepted purchase agreement. The following in the purchase agreement determine the timeline:

Time for obtaining financing (number of days from acceptance) Closing (date) Buyer's insurance commitment (number of days from acceptance) Inspection and response period (number of days from acceptance) Homeowner association documents (number of days from acceptance)

If the buyer and seller agree to in writing, days and dates can be pushed back.

The Realtor did a Comparable Market Analysis. Why is my home being appraised?

The mortgage company requires an appraisal from a licensed certified appraiser. Realtor® can only do comparative market analysis unless they are licensed appraisers also. An appraisal is much more than a comparative market analysis. This protects the mortgage company from giving a loan on a house that appraises lower than the agreed to price.

What is a pre-closing walk-thorough?

If there were negotiations during the inspection process and repairs were made, the pre-closing walk-through gives the buyer the chance to inspect the repairs and make sure they were done before closing.

What happens at closing?

Closings generally take place at title companies. The seller traditionally chooses the title company. From the time the deal was signed to the closing date, both Realtors® are in contact with the title company sending them needed information for the closing. By the closing day the title company should have all the information needed to close the deal.

At closing both buyers and sellers sit at a table along with their Realtors® (State law requires that Realtor® attend the closing) and the title company closer. The title company closer is in charge. They usually have a stack of documents that have to be reviewed and signed by both buyers and sellers. Most of the documents are mortgage documents that the buyers will sign. The sellers have it pretty easy. Realtors® usually are making sure their documents are in order and sometimes are getting last minute signatures on disclosure statements.

Once everything is done and signed, the closer leaves the room for about 20 minutes to send documents to the mortgage company so that they will release the mortgage funds. The closer will also make copies of documents for everyone. The closer will then give a check to the seller and give the Realtors® their commission checks. The seller hands the house keys to the buyer and the deal is done.

What are typical closing costs and can you explain them?

Realtors® Commission Title Insurance - This protects the seller in the future of title problems. Deed and Affidavit - Title company charges Property taxes - Usually about one year's worth. Document Prep Fee - Title company fee Messenger Fee - Title company fee Recording Fee - Title company fee

These are typical fees paid by the seller. Each transaction can vary.

What about capital gains on my sale?

Since 1997 you don't have to pay any capital gains taxes on the sell of your home. Any gains up to $500,000 for married couples and up to $250,000 for singles are tax free, as long as you're selling a principal residence, you've lived in the house 2 of the last 5 years and you haven't sold your previous house within 24 months.