Lori Ashcraft - A Guide To Selling Your Home

A Guide To Selling Your Home

Selling your home involves lots of time and energy, especially when trying to sell it yourself. It means being responsible for advertisements, answering telephone calls, showing your home to strangers and a whole host of other details. Most people find that using a qualified Real Estate agent is their best choice (see our Advantages of Using A Real Estate Agent page for more information).

Whether you choose to sell your home with the help of a Realtor or do it yourself, the following will give you a fairly detailed look at what steps are involved in selling your home.

Appraise Your Home

To help give you an idea of what your home might sell for on the open market, many people conduct a Comparable Market Analysis (CMA). A CMA is a comparison of the recent sales of similar properties in the same area or neighborhood. This information is public and can be found at your local County Recorders Office (Courthouse). Many title companies, including Chicago Title offer CMA’s at no cost. CMA’s take into consideration the unique features of your home and the price at which other homes in your neighborhood have sold for in the last six months.

To determine the actual value of your home, you will probably want to consult an appraiser. Many people hire a state-certified MAI (Member of the Appraiser Institute) appraiser to provide written proof to support the asking price. This ensures that the property is not sold for under market value. The cost of hiring an appraiser usually runs between two-three hundred dollars.

Set Your Price

Determining a sale price for your home can be tricky. The goal is to set a fair price without scaring off potential buyers or letting your house sit on the market for too long. Long selling delays may require you to reduce your price, which may raise doubts in the mind of the buyers or lead them to think that there is something wrong with your home. When pricing your home, keep in mind things such as its location, local school systems, area economic conditions, amenities (deck, finished basement, central air, etc) and average neighborhood home prices. Statistics show that only 10% of prospective buyers will even look at the property if the home is priced at 15% above market value. On the other hand, pricing 15% below the market value provides a 90% return on the buyers willing to view your home. Establishing a realistic and fair price increases your potential to attract buyers and allows you to sell your home in a reasonable amount of time that is consistent with your selling goals.

Prepare Your Home

Outside Considerations

Exercise common sense when preparing your home for a sale. Picture yourself as a buyer and ask yourself "What are some things that I can do to make my house most appealing?" Here are some household maintenance items to consider:

Ensure that the most noticeable things are maintained (lawn, shrubs, walkway or driveway cracks, etc)
See to it that equipment, toys, or lawn and garden items are properly stored
Touch up or paint worn window trim, doors, or siding that looks aged
Store garbage and debris in proper canisters
Caulk and weather-strip around windows, doors, electrical outlets and baseboards, again, for energy efficiency sake.

Inside Considerations
After buyers have been satisfied with the externals, it is important that they become satisfied with what they see inside. One of the most important criteria is cleanliness. An un-kept, dirty home will turn off any buyer. Therefore floors, bathroom tile, and windows should appear noticeably clean. Replace dirty heating and air conditioning filters and shampoo carpets if necessary. Bathroom tubs, showers, and toilets should be clean of debris and hard water stains. Dripping faucets should be fixed and tight or squeaky doors should fit properly. Make sure the house is picked up after and that the kitchen area is clean including the oven and stovetop. Make the inside of your home bright and cheery by turning on the lights and opening up the window blinds.

Areas that will be visually inspected by the buyer such as the garage, basement, attic and closets should appear kept and in order. Today's homebuyers like plenty of closet space and filled closets give the feeling that they are too small. Any items such as posters, pictures or sayings that might be misinterpreted or come across offensive should be removed. Rooms that may have marked walls or dirtied ceilings due to smoke stains should be repainted with a neutral off-white color. Valuables should be put away in a safe place.

Keep in mind that you want to have buyers leave with the impression that your house has been properly kept and maintained. Make them feel like they could live in your house. Therefore, any additional things that you could do to make the house feel like home move the buyer closer toward making an offer. Small things like smell from indoor pets or smoking from cigarettes should be removed and replaced with scented potpourri. Placing live flowers on the kitchen table or guest towels on the bathroom towel rack will give the house and added “homey” impression. A buyer is not much different than you. A clean up-kept house can go a long way and small cosmetic changes can make a difference in the mind of the buyer.

Hire An Attorney

Although hiring an attorney is an additional expense, it is a good idea to do so anyway. An attorney will protect your interest during the course of the entire process and ensure that things are done right and legally. Your lawyer will also evaluate offers from buyers, examine and interpret financial mortgages, be present at the actual closing, and oversee settlements, down payments, sale price issues, and various costs associated with the transaction. Look for an attorney who is specialized in real estate transactions. The cost of an attorney in the Columbus market will run a few hundred dollars. For more information see our Why You Need An Attorney page.

Market Your Home

There are a number of practical things that you can do to market your home to potential buyers. The most common practice is to hold an Open House to give buyers an opportunity to see your home. Advertise your open house by placing an ad in the newspaper giving the time, date and other relevant information. If you’re not sure what to include in your ad, review the real estate section in your local newspaper to give yourself a better idea of what to include. The Internet and real estate magazines are other means to market your home. Some websites will advertise your home for you.

Another marketing option is to finance the home yourself. Owner financing eliminates costs and cuts down on the time it takes to close the house while increasing the number of potential buyers. This process utilizes contract buyers who are hired individuals that purchase the sales contract or note at a discounted price, pay you the sale price of the home, and then manage the mortgage payments with the buyer for the life of the contract. If you choose to provide financing for the buyer, it is recommended that you obtain the services of a real-estate attorney to ensure legal protection.

For a list of tips on how to make your home more presentable and ultimately sell faster, see our Preparing Your Home For Sale page for a list of 51 tips that will make your home more appealing to buyers.

Qualify Your Buyers

After you have a pool of buyers that are interested in purchasing your home, you will want to determine which buyers can really afford to purchase your home. Before you begin a serious negotiation with a buyer, make sure that they are pre-approved by a lender. It is also a good idea to do a background check by investigating the buyer’s debt and credit history. Taking these precautions saves you the time of negotiating a sale with a buyer who cannot really afford to buy. When doing a background check, take into consideration the buyer's current income and employment; cash position and availability of a down payment; the amount time the buyer needs before closing on your home; and the level of interest the buyer appears to be in your home versus others.

Negotiate An Offer

After you have qualified a buyer, it is time to begin serious sale negotiations. Begin negotiating a sale price based on your appraisal value, market analysis, and what you feel your home is worth based on other comparable homes that sold in your area. Determine a price range by which you feel comfortable and then begin your negotiations with a number that is within the high-end of the range. This will give you some flexibility during negotiations. One of the challenges when conducting your own negotiations is objectivity as buying or selling a home tends to be an emotional experience. If necessary, you may want to call your lawyer to gain objective feedback during the course of these negotiations. Although it is an added expense, it is recommended that you enlist the services of a real estate lawyer to oversee the transaction and overall home sale process. Counteroffers are part of the negotiation process. Exchanging sale prices allows for the free exchange of information. Avoid countering on insignificant issues and stick to the main issues. If another buyer comes along and offers a higher price than the first buyer, you can withdraw your offer as long as nothing has been committed in writing because verbal agreements are not binding but counteroffers that have been signed by the buyer and delivered back to the seller are. In cases such as these, be careful not to counter with many different buyers so you don’t inadvertently enter into an agreement with more than one buyer. After a verbal agreement has been made with the buyer, put it in writing to bind both parties into the contract. Before you do so, make sure to conduct a background check and get a pre-approval letter prior to accepting the contract offer.

Sign A Real Estate Contract and Collect Earnest Money

After you have negotiated a price with the buyer, contact your lawyer and obtain a real estate contract. Schedule an appointment with your lawyer and have both parties sign the contract. Be sure to collect “earnest money” which is money that the buyer gives to you as a “down-payment” to ensure his/her obligation to the contract. The earnest money is returned to the buyer at closing.

It is your responsibility, as the seller, to have the Contract of Sale prepared and available for inspection before offering a property for sale. Attached to the contract are the various certificates the seller must provide.

A "Section 149" certificate from the local council, detailing zoning and other information
a sewerage diagram
a copy of the title folio from the Land and Property Information
copies of all documents creating easements or restrictive covenants
a cooling off statement has to be provided
a notice directing parties to the Conveyancing Act 1919 (Section 52A) and the Conveyancing (Sale of Land) Regulation 1995
and if it is a strata unit, the seller must attach copies of the folio of the Register for the lot and common property and a copy of the strata plan.

If the seller does not attach the disclosure information, the purchaser may be entitled to rescind (cancel) the contract within 14 days of exchanging the contract. The purchaser may also have rights to rescind the contract prior to completion if the seller breaches certain warranties required by the Vendor Disclosure and Warranty Regulation.

Allow the Buyer to Perform an Inspection

Standard real estate contracts give buyers the right to inspect the home for possible problems. Repairs to appliances, heating, plumbing or electrical systems will need to be taken care of under terms of the contract. The buyer may also request that you purchase a home warranty policy on their behalf to guard against major home-appliance related repairs during the first year of ownership.

Allow for a Gas & Termite Inspection

Many states, including Ohio, require a termite inspection to ensure that the home is free of termites. It is also required that the seller provide a one year termite warranty to the buyer.

Purchase Title Insurance

In addition to termite and home warranty policies, you will also have to purchase title insurance for the buyer if you live in the central Ohio. The current version of the Columbus Board of Realtors and Columbus Bar Association standardized Residential Real Estate contract has a clause entitled, Title Insurance, which reads: "Seller shall furnish and pay for an owner's title insurance commitment and policy in the amount of the purchase price."

A title insurance policy ensures the buyer and his or her lender that the property is legally yours and is clear of anything that might jeopardize ownership such as prior liens, judgments, or claims that may have been brought against the property due to errors in public records, hidden defects not disclosed by public records, mistakes in the examination of your title. A clear title ensures the buyer that your home is clear for resale.

Miscellaneous Pre-Closing Details

Prior to scheduling a closing, you will need to call your lender to notify them that you will be paying off your mortgage. You will also want to gather all warranty information on your appliances and give them to your buyer.

Schedule a Closing with Chicago Title

The closing is the last step in the process of selling your home. It is here where the selling of your home officially takes place and details become finalized. Most closings are done at title companies. During the closing, legal documents are signed such as deeds, compliance agreements, lien affidavits, and a number of other forms necessary for closing your home. Financial activities take place as well. Outstanding bills are paid, monies are collected and checks are issued. All legal and financial issues are settled and taken care of at the closing. When the closing is over, your work has been completed.

It is important to choose a title company that you can trust who will handle your investments with care and ensure that everything is done right. It is our hope that you will choose Chicago Title. For your convenience, we have offices located throughout Ohio with real estate attorneys available to assist you when called upon. As you contemplate a title company, keep us in mind. We would like to earn your trust as we have from many others. Their confidence in us has allowed us to become the leading title company in Ohio. We hope yours will too.