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Home Sellers Checklist

From before you list to once you've accepted an offer, here's a step-by-step guide for making your home sale as smooth as possible.

Be realistic. Ask for help.  Have patience.

That's the advice from real-estate professionals wading through today's tough seller's market.

If you're selling a house, don't skip on pro's services--which can earn you more than it costs--and be prepared to live in a showroom during what could be a bit of a wait for a buyer.  "Price yor home realistically," says Rob Wigton, president of the Nevada Association of Realtors, 'be patient and know that things will stabilize."

That said, following is a checklist to use as a guide throughout the sales process, with links to additional resources.

I-Before you list

Consider a real-estate: Real-estate lawyers can help whether you hire an agent or not.  They can refer you to reputable agents, provide required disclosure forms for your state, answer questions throughtout the process and ensure you receive payment.  Thomas Moens, a real-estate lawyer in Illinois, offers these services for a flat fee of $300.

"While agents are reputable, an attorney's fee isn't based on the purchase price or on wheter it closes.  And we're ethically obligated to represent only our client," he says.  "It's pretty cheap insurance to have someone who's working for you."

Decide whether to hire an agent: The long-standing justification for paying an agent's typical 6% commission is that the agent more than makes up for it with higher sale price.  Today's difficult sellingclimate would seem to bolster that argument.  For the yearEnding June 2007, the median price for all agent assisted saleswas $240,000, while the median price for all homes sold by the owners was $180,000, the National Associaton Realtors (NAR) reports. Agents have access to great marketing techniques, and also represent and bring over buyers.  They also know the legal requirements and have liability insurance, should something go wrong.

Not going FSBO? Select an agent: Selling a house is likely to be one of the largest financial tranactions of your life.  Find a real-estate agent whose experienceand commitment you trust.  Ask friends and neighbors for referrals then interview several.  Some things to ask include:

        *  What's your marketing strategy?  This is where your agent really makes the differece.  Does she list online, in newspaper, magazines?  "That's very, very important," says Andrea DeHaven, a realtor with Coldwell Banker Anchor Real Estate.  "Some agents just like the MLS."

       *  Will you represent me exclusively in the tranaction, or the buyer, as well?

        *  What are your commissions and fees?

        *  What's your impression of my home?

        *  Can you provide the names and contact information for previous clients?

Gather your paperwork: Once you select an agent, he is going to ask you for a lot of information.  Gather these documents:

        *  Prior year's tax bill, utility bills, water and sewer bills;

        *  Declarations, covenants or deed restrictions on the property;

        *  Assessments, surveys and plats:

        *  Sales and repairs of major appilances and building components;

        *  Inspections for pests or environmental hazards;

        *  List of items to be included in or excluded from the sale.

An agent will also run through the disclosure you need to make on the property, basically any problems that could potentially make the home less valuable.

"Without knowing those, you can pretty much blow the whole sale," says Moens, the real-estate lawyer.

You can also find out which disclosure forms are required from your real-estate division.  It's important, because even the most upstanding seller can forget a repair or minor blemish from long ago.

"In Nevada, for instances, if you don't disclose something, and it's found out that you did have knowledge, you can be subject to triple damages," says Wigton.

Get an appraisal: Youcan hire an independent certified appraiser or get a few real-estate agents to prepare comparative market analyses.  CMAs will detail similar houses that have sold in your area over the past three months and will drive the agents suggestedprice per square foot of your home.

Online sites as Zillow and Cyberhomes.com also can provide automated home valuations, though these can differ from what your agent reports.  For now, deep local experience still trumps the computer models, so expect to revise your list price based on your agent's feedback.

"There's not a lot of subjectivity," says Wigton.  "The seller needs to be realistic and realize that the agent has all the tools need to get an accurate picture of what the price needs to bee to sell."

Price it right: Buyers today are savvy, says Walter Molony, of NAR. Eighty-four percent look online before contacting an agent, and two-thirds hire an agent to represent them.

"When your house sits on the market and sits on the market, then your home becomes stale and it looks to buyers like they can negotiate further and the price drops more," Wigton says.  "They say if you set the right price at the beginning, chances are you'll get pretty close to it."

Consider a home inspection: As a seller, it is not your responsibility to conduct a home inspection.  But for about $300, you can uncover potential problems and fix them before listing your home.

Prepare your home: Listen to your agent.  They all have stories of how homes sold for $10,000 or $20,000 less because of some minor repairs, dirt or clutter that could have been resolved for a couple thousand.

Take a look at other homes on the market.  Then proceed with your preparation, in this order of importance:

     *  Major fixes:  If you've become accustomed to the cracks and dents, have a friend or the agent point them out.  "If you notice them and the agent notices them, then nine times out of 10 that the buyer is going to notice them," DeHaven says.

     *  Start on the outside:  Buyer's won't step inside at all if your home is unappealing curbside.  "A lot of times you'll drive up to the neighborhood, there might be weeds growing, some paint peeling, and they'llsay, "No, let's just skip this one," Wigton says.

     *  Paint the interior walls and clean the floors:  This is the most important inside spruce-up, agents say.  "You'll make one first impression, and when thatbuyer walks through you want everything to be clean and new-feeling as you can," DeHaven says.  Go with uniform, neutral earth tones.

    *  Declutter:  One person's cherished object is another person's junk.  All that stuff, every bit of it, is distracting.  Trust the eyes of someone who isn't attached to it, such as your real-estate agent, and be ruthless: Dump it, sell it or store it.

    *  Depersonalize:  "Buyers don't want to place yor family in a home, they want to place their family in a home,"DeHaven says.  Persoal items also distract buyers from imagining the home's bare potential.

Consider hiring a home stager: Barb Schwarz, CEO of StagedHomes.com says 18% of home sellers are now hiring professional stagers, people who spend a day making your home look appealing to buyers.  Their fees average $1,800 in the Midwest, $2,800 on the West Coast and $3,800 on the East Coast and are based on the size of the home and the amount of clutter.

II - While your home is on the market

Keep your home show ready:  If you're serious about selling, then your home has to be a sales showroom first and a living area second.  Not a neat freak?  Follow this simple tip: Keep up on a daily basis.  "If you've done little things--made the bed, picked up the laundry before you lefted work--then you can send the agent through," DeHaven says.

Be able to clear out:  Have a place to go, as well as somewhere for kids and pets.  You don't have to be home when prospective buyers walk through.  It can make buyers feel uncomfortable, restrain them from asking questions and even potentially be a turn-off.

Stay in touch with your agent:  Ask your agent where and how your home is being listed and for updates on buyers interest.  Establish a system early on for when and how your agent willprovide updates.  Put remainders in your own calendar to check for updates.

III - After the close

Stay focused:  "A lot of times, sellers think once you have the contract, oh great, you're over the hurdle," says Stephanie Singer, of the NAR.  But on average more than 20 steps remain.  "It's like climbing Mt. Everest: You made it to the top of the mountain but you still have to come down."

The NAR lists these 10 last pre-closing steps for sellers:

1. Select an escrow agent.

2. Assemble anu condo or homeowners association financial statements and recent reports for the buyer.

3. Order a preliminary title report.

4. Request a satisfacation letter from your present lender.

5. Coordinate the home appraisal and inspections.

6. Arrange final utility readings and payments.

7. Obtain a home warranty policy if you've agreed to provide this to the buyer.

8. Create a formal plan for handling repairs.  When repairs are made, and who pays, is flexiable.  However, it's important that you and the buyer spell out your agreement before closing so no questions arise later.  Put money for any outstanding repairs in escrow account.

9. Have an attorney prepare the deed. (If you're working with an agent, he will typically work with the attorney with this.)

10. Arrange for payment of transfer taxes.  Your agent will make sure that the financial requirements of your county are included in your closing paperwork and discuss possible payment options.

Finally, make sure everyone--and everything--important moves with you:

    *  Notify the post office, utility and insurance companies and friends of a forwarding address several weeks in advance.

    *  Make copies of important records, such as transcripts, employment and financial documents that you might need immediately or can't risk losing on the move.

    *  Find a mover.  You can search and reserve a moving van online at Moving.com

 

               

Dealing with an Eyesore Next Door

In a buyer's market, curb appeal--your's and the neighborhood's--becomes more important.

Fresh paint, a new front door and colorful landscaping often are surefire ways to tease potential buyers over the threshold of a home for sale.  But in some cases, no matter how perfect your pansies, nothing can draw thier gaze past the tired-looking two-story buried in the weeds next door.

More than 60% of 900 people surveyed by contractors-referral site ServiceMagic.com said they have or have had neighbors who make the street look bad by not taking care of the outside of their homes (21% admitted they were the culprit). Common problems: tall weeds and grass, imposing trees or a dying lawn; piled-up junk, particuularly old cars; and peeling paint or a visible exterior defect, such as a broken window.  Sloppy properties aren't exclusive to older dwellings in established or up-and-coming neighborhoods. Bad habits are on display in new developments too, say real-estate experts.

Neighborhood eyesores aren't a new or uncommon problem.  But curb appeal, yours and the neighbor's, takes on greater significances in a nationwide buyer's market.  For buyers, eyesores my present yet one more negotiating advantage.  Remember, appraisals factor in the condition of nearby properties.

Michael Lee, a realty broker for 30 years in the San Francisco Bay Area and author of "Black Belt Negotiating", said sellers near eyesores "don't have to have a fire sale, but need to put their listing at a price that attracts plenty of traffic...or risk having a home that just sits on the market."

"That is death,"he said.  "It becomes the tainted house."

The National Association of Realtors says an eyesore can shave about 10% off the value of a nearby listing.  Market-by-market differences affect that percentage, real-estate experts say, as does the situation--an overgrown lawn across the street is better than a boarded-up property right next door." 

"If there are or were other similar eyesores in the area but the market is heading up, it's likely that the home will get fixed up or torn down sooner than later,"said Bob Golden, a 20-year Atlanta agent with Re/Max.  "If it's the only house in the area that looks bad, it can have a greater impact on the resale of neighboring homes."

Size up the situation

Approaching a neighbor can be uncomfortable to say the least.  In the ServiceMagic survey, 75% of respondents said they'd made no direct contact with their neighbors about the issue; 18% said they comfronted their neighbor, it created tension and the house still looked bad; 4% said their talk produced a satisfactory outcome all the way around and another 4% said the problem was fixed but it created lingering tension.

Neglected properties likely belong to one of two types of people: those physically or financially unable to keep up with the work and those who purposely buck social norms, said Tara-Nicholle Nelson, an Oakland, Calif., broker, author, and creator of female focused resource site Rethinkrealestate.com.

Knowing what you're dealing with is the key.

"In 'Black Belt" we talk about 'spying' on your opponent, true in martial arts and in any negotiation situation," said Lee.  In some cases, the homeowner may have just fallen behind after taking on new responsibilities--for example, a new job--or facing unexpected health issues.  Bringing your concern to their attention may do the trick.  Stress that keeping up the condition of the neighborhood helps the vaule of all properties.  Think: What's in it for us, not what's in it for me.

A group effort may pay off.  Some local branches of the National Association of Realtors have created funds to help older or incapacitated homeowners keep up their exteriors.  Getting other neighbors to collectively rally behind your cause may bear more fruit and may come across as neighborhood improvement projects, not the ranting of a picky neighbor.

Absentee owners--say, if the property is rented out--may require plenty of correspondence, so don't wait until right before you put your home on the market.  If the out-of-town party is agreeable to changes, it may make sense for you to offer to secure contractors or other necessary laborers.

Ask for more than you think you're going to get, said Lee.  Your fallback postion, then is that you will take care of making the fixes, either paying for them or doing the work yourself.

Enexpected sweat equity to resolve someone else's problem may seem more hassle than help, but that first impression is everything these days.  Consider this: Lee admitted he once took a pass on a $750,000 listing just because the seller refused to repaint their dog-scratched front door.

Call in the authorities

If personal negotiation stalls,or if hostile neighbor's becomr threatening, residents sometimes can lean on municipal laws, administered through the building department, health department or similarentity, to get neighbor's to clean up their act, said Neil Garfinkel, a Manhatten real-estate attorney with Abrams Garfinkel Margolis Bergson.

Some area levy fines for keeping around piles of wood that attract animals, as one example. Municipal codes can make for interesting, if dense, reading.  Nelson said that her home city of Oakland includes an anti-rooster ordinance on its books.

Asking about bringing in the authorities, some 20% in the ServiceMagic survey said they 'snitched" on their neighbors, another 20% said they intended to bring in the authorities but hadn't yet, and 14% said someone else in the neighborhood beat them to it.  The remaninder said they just put up with the nearby eyesore.

Getting results can be frustrating.  The government is most likely to act when a property's condition risks public health.  The process of resolving a complaint can be long and time-consuming, real-estate experts say.

Eye of the beholder

Kina Lane, principal in Sunshine Development Partners, which buys and sells property in Chicago, Wilmington, Del., and her own neighborhood of New York's Harlem, stressed that eyesores are subjective.  Real estate, like any investment, carries risk and reward. Proxmity to eyesores may present a buying opportunity to some and keep others from even getting out if the car.

Some buyers, like Lane, see a mix of fixer-uppers and ongoing projects asa fruitful challenge; others don't want daily construction noise over several months or years.  Urban house-hunters might be more tolerant of a mix of building styles and conditions than surburban or rural buyers, she said.

Eyesores aren't restricted to homes, Lane said.  The mix of nearby commerical properties may not fit everyone's sensibilities--a liquor store at the end of the block, for instances.  Other buyers may enjoy the proximity of retial stores.

Empty industrial or retail buildings can have a negative impact as well.  A potential buyer is left wondering if an area is on the rise or on the decline.  A seller setting a listing price must keep the entire feel of the neighborhood in mind, Lane said.

Sometimes the house down the street is in good condition but its purple facade and lawn sculptures don't speak to everyone's taste.  Whether homes need to conform by city ordinance to a general architectural feel varies by area, so check the rules.

In this case, Lee said, expand beyond conventional marketing venues to go after potential buyers who would welcome living in an eclectic neighborhood.  Post your listing in galleries and resturants, in independent newspaper and on an Web sites such as Craiglist.

Develop a buyer profile, Lee said, and then go after that buyer.

Seven Tips for First Time Home Buyers

Think you're ready to take the plunge?  Following these steps first will help ensure you're making the right decision.

Are you a first time home buyer eager to get into the market?  Here are steps to take to help you decide wheter you're ready to take the plunge.

1.  Check the selling prices of comparable homes in your area.  Web sites such as Zillow and Homegain can give you a general idea of what you should expect to pay.  You can also do a quick search of actual MLS listings in your area on a number of Web sites, including the site of the National Association of Realtors.

2.  See what you can afford.  Use Bankrate's mortgage to see what your payment would be.  To get a sense of the maximum you should spend, use MSN Real Estate's home affordability calculator.

3. Find out what your monthly housing cost would be, including taxes and homeowners insurance.  To get a feel for the maximum amount you should spend, including taxes and insurance, use MSN home affordability calculator.  In some areas, what you'll pay for taxes and insurance escrow can almost double your mortgage payment.  According to the Insurance Information Insititute, the average yearly premium can range from $477 in Uthah to $1,372 for unlucky Texans.

To get an idea of what you'll pay in insurance, pick a property in the area where you want to live and make a call to a local insurance agent for an estimate.  You won't be obligated to get the insurance, but you'll have a good idea what you'll pay if you buy.  For an idea of what you'll pay in taxes, Zillow publishes property-tax information for homes all over the country.  Just remember that exemptions and the intricacies of local tax law ( such as Flordia's Save Our Homes value cap) can create differences between what a homeowner is currently paying and what you can expect to pay as a new homeowner.

4.  Find out how much you'll likely to pay in closing costs.  The upfront cost of settling on your home shouldn't be overlooked.  Closing cost should include origination fees charged by the lender, title and settlement fees, taxes and prepaid items such as homeowners insurance or homeowners association fees.  You can see what closing cost average in your state by looking at Bankrate.com's annual closing cost survey.

5.  Look at your budget and determine how a house fits into it.  Fannie Mae recommands that buyers spend no more than 28% of their income on housing costs.  Go much past 30% and you risk becoming house poor.

6.  Talk to reputable real-estate agents in your area about the real-estate climate.  Do they believe prices will continue falling or do they think your area has hit bottom or will rise soon?

7.  Remember to look at the big picture.  While buying a house is a great way to build wealth, maintaining your investment can be labor-intensive and expensive.  When unexpected cost for new appliances, roof repairs and plumbing problems crop up, there's no landlord to turn to, and these costs can drain your bank account.

So consider whether you're ready for the expense and effort of homeownership before pulling the trigger.  Then call me for a consultation!