SHOULD YOU SELL?
UNLESS YOUR CURRENT SITUATION REQUIRES YOU TO SELL IMMEDIATELY, YOU WILL WANT TO CONSIDER WHAT CAN BE DONE TO MAXIMIZE THE LIKELIHOOD OF SELLING AT A GREAT PRICE IN THE QUICKEST TIME POSSIBLE, AS SUPPORTED BY THE MARKET. EVEN IF YOU NEED TO SELL IMMEDIATELY, YOU CAN STILL FOLLOW THESE RULES TO HAVE THE BEST POSSIBLE RESULTS.
All too often, the process of selling a house is more time-consuming and tedious than it needs to be; this can be caused by a variety of factors, a few of what we believe are the most important ones are highlighted below.
The Conventional Approach, and Why it’s Flawed…
I like to start off with defining the problem. When selling a house, often times people – including real estate agents – go about it backwards; the event usually proceeds something like this:
Step 1 – CMA
The homeowner or the real estate agent conducts a Comparable Market Analysis, or CMA, to try and determine a range in which the house’s market value is contained, basically what the home is worth. This is one of multiple methods used to assess home value. If you’re interested, I have a video titled “what is value?” which discusses this and other valuation techniques in more detail, but for now, we just want to understand an overview of the typical process to see that there is indeed a better way to go about it. This is Time waster #1
Step 2 – List the house and wait for offers
The house is listed on the internet, as well as the MLS if you are working with an agent. Home buyers either use search filters such as school zone, number of bedrooms and bathrooms or tell their buyers agent to look for a home, and if yours meet their criteria, they often ask their buyers agent, or lets be real, any agent that will drop what they are doing and go show your house to them. This is problematic because they may not even be qualified to look, but they may be the only ones looking, as you listed in a buyer’s market, so you don’t want to turn them down based on a lack of pre approval. You let people in your house that are not financially qualified. This is Time waster #2
Step 3 – Accept an offer (and hope the Appraiser agrees with your sales price for non-cash buyers)
You have finally gotten an offer on your property, everyone’s excited, and then bam you get hit by the appraiser with a value lower than you both agreed upon. The buyer’s lender does not approve the value, and they will not lend what is needed. There are many contributing factors to this, and sometimes they can be fought, but the process becomes lengthy with no guarantee of working out. This is Time Waster #3
Step 4 – Home inspection (when you know you have a messed up house)
The appraisal passed, and now you are in the home inspection period. It’s quite comical, not to mention illegal, for home owners to try and cover up an issue in their property prior to reaching this point. These issues are known as “Material Facts,” and can get people into trouble if left undisclosed when their existence is known. Additionally, they are often uncovered in the home inspection and give negotiation power to the buyer, as it is things that they may need to fix if you don’t. Many deals end here. This is Time waster #4 . Your house is now back on the market, and the hot sellers market has now turned into a slow buyers market.
Following these strategies will help you overcome the issues that can arise when selling a house. Picking a good agent who follows these methods is a great choice.
A Better Approach:
The process we recommend to save time and have a better chance of obtaining a great offer is as follows:
Step 1 – Look at the Market in Your Area
With the right metrics, you can determine if you are in a buyer or seller dominated market, as well as what types of sales are occurring. You may not even want to sell after this, because your negotiation power may be little or none in a buyers market, the average time a house sits for sale on market may be longer than you thought, or the value range doesn’t support what you need to sell your house at. Once you know these variables, you can then conduct a CMA to get an idea of what your home may be worth if you decide to sell.
Step 2 – Fix Stuff, Get an Inspection (then fix remaining stuff)
It is probably true that you could get multiple inspections and they will all turn up some different issues, but going into the sales process not knowing what you are dealing with is extremely inefficient and it sets you up for wasted time and energy. I recommend finding a thorough inspector and then fixing everything you have the money to fix; this establishes more negotiating power, you can include it in your marketing (similar to what a carfax is to a used car buyer), and it can help the appraisal value of your home. Which brings me to Step 3:
Step 3 – Prep the Home for Appraisal and Photos
To get the most for your home, you need to drive the demand up. I do this for my clients by prepping the property inside and out with landscaping and a thorough interior cleaning. Then a professional should come in and photograph, video, and create walkthroughs and floorplans to show off the house as completely as possible to potential buyers. We are in an age where people sit in their comfortable beds and do all shopping online, yes even for houses. That first impression of your houses listing online needs to grab and keep their attention for as long as possible, or they won’t even consider viewing it in person. When you have a great listing, and you are using all available widely visited marketplaces such as Zillow, Redfin, the MLS and others, then you have the best shot at obtaining a great price for your home.
Step 4 – Get an Appraisal
The CMA provided by a real estate agent is not regarded as highly as an appraiser’s opinion of value. This is not to say that the CMA is garbage, in fact, most homes require a CMA as part of the appraisal process. The difference is that an appraiser’s opinion of value is required to be more rigorous and unbiased, which is why lenders use them. Having an appraisal can give you confidence in the suggested value range offered by your real estate agent. By doing this step after the inspection and home prep, the appraisal has a great shot at coming in closer to your agent’s CMA. This appraisal will not be used by the buyer’s lender, but it offers the same advantages as having a home inspection included with the marketing material, mainly confidence to potential buyers that your house is a great house to buy.
If you and your real estate agent follow these 4 steps in this order, you will have the smoothest possible home selling experience and the highest satisfaction with your sale.
You do NOT want to skimp when it comes to marketing. This is your best shot at grabbing attention and driving demand for your property up before anyone even steps foot inside.
Compare the Following
123 Easy St. Somewhere, ID 12345
A great place to call home, this property offers upgrades throughout, including stainless steel appliances, marbled charcoal and pearl white granite counter tops, solid oak cabinetry, and modern bathroom vanities. There is plenty of land for gatherings in both the front and back of the property; guests will love mingling under the cedar vintage pergola, while enjoying food fire grilled on the built in 40″ stainless steel Blaze BBQ. Full recent property inspection available on request, as well as the full list of upgrades and current appraisal.