Once upon a time you could put a for sale sign in the yard and your house would sell. Today, selling a home is not that simple: popping a sign in the ground does very little to attract a buyer. Placing an ad in the paper, telling your friends and neighbors, holding an open house, putting some photos on the Internet and even hiring a Broker, might help you find a buyer, but you are a long way from getting to a closing. Even after you sell your house, there are many hurdles that you have to continually jump over to keep that sale on track, in order to get to a closing.
Today you actually have to sell your house SEVEN times! At Towne Realty Group in Short Hills, we want you to be aware of the hurdles and how to avoid them. Price it right from the start and follow these tips.
1. First you must sell to the Realtors® – if the local Brokerage community does not agree with your pricing, they may show your house once, but they won’t push it or rush to get their buyers in. They are the match makers and you have to get them excited. If the house is too difficult to show, the price too high, the commission too low, the amount of work needed too much of an obstacle, or if they don’t believe a seller is serious or motivated, they won’t waste their time. There is always another house to show… They don’t really care which house they sell, they just want to sell something and they will take the path of least resistance.
2. Second – sell to the buyers – if the buyers don’t fall in love with your home, they won’t come back. Since approximately 90% of buyers begin their search for a home online, you have to lure them in with great photos or video. They may look once, but the 2nd showing is usually when you know you have serious interest. If the buyer comes once but does not come back, they have rejected your home. Often when the price is reduced, they will come back for another look, but if you wait too long, they may have moved on. This is a courtship and you have to keep them interested. This is like on-line dating. If you don’t get a second date. Forget about it.
3. Third – sell to the family – buyers often want a second opinion and this could be the parents, the kids, an uncle or a sibling. Just to make sure they are not making a mistake, they may even bring a close friend to reassure them that this is the right house. Sadly, this visit is often the kiss of death… If your agent is doing his or her job, before the buyer returns, they will know the feedback and this is when you can try to overcome all or some of the obstacles from the first visit. (Where will my parents stay when they visit? Or how can I add a master bath?) Calling an architect and figuring how, where and how much that will take, might be the reason they are convinced to make an offer.
4. Fourth – sell it to the attorneys – if your house gets an offer and goes into attorney review, this is a phase where lawyers sometimes add language or clauses that can kill a deal. Often the attorney is a family friend or someone who dabbles in real estate; and they believe they are doing you a favor. This is not the case. Even if the buyer is getting a discount, an attorney who does not regularly practice in real estate, could miss some important issues and really create problems. The attorney review can end in an hour, a day or last for weeks. (In NJ we have a 3 day attorney review and in Essex, Morris & Union counties, most of our transactions have both a buyer and seller’s attorney. This is less common in Southern NJ, but if the attorneys don’t get along or agree, or they do not regularly handle real estate or they are semi retired, the house may go back on the market.)
5. Fifth – sell it to the home inspectors – even when you disclose issues about oil tanks or old leaks in the roof or the the basement, or admit to broken appliances, the home inspectors can come and frighten a buyer. We call this the cold-feet-renegotiating-phase. Inspectors can convince a buyer that the issue is bigger and may cost more to repair or replace. One of the main reasons a sale of a home falls apart is due to home inspection issues that cannot be successfully resolved with credits or repairs that are acceptable to all parties. The last thing you want are expensive surprises. We tell all of our sellers to scan their entire property before they list to make sure there are no buried tanks on their property. If one is found our advice is to REMOVE ABANDONED OIL TANKS, before you list the house. Don’t forget that sometimes you also have to close out long forgotten open permits from the local building department for work that was done to the home by you or a previous owner. Most buyers and their attorneys will insist that all permits be closed out and inspected by a official from the construction office in the community, as well as pass the certificate of occupancy specifications or a fire inspection by the municipality.
6. Sixth – sell it to the appraiser – just because a buyer is willing to pay a certain price for a property, does not mean the bank will agree to lend the money. The house has to appraise and if the recent comparable sales are low (due to short sales, divorce, job transfer or desperate sellers) this can impact the the fair market value. Often the appraiser comes from a depressed area or is unfamiliar with the comps. When an appraisal comes in low, the price may need to be lowered or the buyer has to come up with more cash. If neither of these solutions will work, the house goes back on the market.
7. Seventh – sell it to the Underwriters – after you jump through hoops to get your entire life of financial paperwork into the hands of your mortgage representative, your pay stubs, 1099’s, W2’s, tax returns, credit report, student loan receipts, bank statements, stock accounts, pension, IRA, loans, child support, alimony or any other money you have ever spent, earned or owed on anything, you then have to prove to the lender that the house if free of easements, clouds on the title, termites (or infestation or damage from any wood destroying insect), and various other things like no oil tanks, credits or personal property thrown in. The underwriters then usually need 5 business days to review this information before they can release the money for the loan.
Being prepared in advance with the right timing, staging, pricing and finesse of a good listing agent, can help you avoid these pitfalls. Doing a home inspection in advance, resolving glaring issues up front or being prepared to offer reasonable credits, hiring a knowledgable real estate attorney and knowing the comps, can save you a lot of heartache and help you get to a closing. For a consultation about how to get your house sold quickly and at a good price, call Karen Bigos at 201-417-1600. Check out our website for many exclusive listings coming on every week.
Oh and I almost forgot – Sellers need to be sold on the idea to stage it and price it right in the first place or the house will probably just languish on the market for months.