THE PROCESS OF SELLING A HOME EXPLAINED
JANUARY 2, 2022 THECOURYTEAM.COM
A Step by Step Guide of the Process of Selling Your Home in MA & RI
Finding a Guide
Thinking of selling your home but unsure how to get started? Wondering what the process is, for selling your home?
The first step in selling your home is thinking about who you are going to use as a Real Estate Agent. This is one of the biggest financial, and even legal transactions many people make in their lives. So really think it through and do your research. Search online first, check out an agent’s reviews, search their websites, and ask around. Search the homes they have sold in the past and look at the quality of the photos and staging from their past listings. You can find a list of our past sales here. If you see an agents sign around town a lot, it may be that they are a strong option, but it’s important to interview at least 3 agents in my opinion. You want to find the right fit for you.
Here are a few tips to think about. Number one – actually interview 3 agents. Studies have shown that most people choose the first person they speak to. That means, whoever falls in your lap is who most sellers are using – regardless of if they are the best option. Get our FREE 10 Questions Interview Guide HERE. Next, ask all of the agents you are interviewing how many houses they have sold like yours. Ask them how long they have been doing real estate, and if they do it full time. Ask them for reviews and testimonials and actually read a few. Research their website, Zillow, Realtor.com, etc. Trust me, this is a big transaction, and it's worth the extra effort.
Finally, ask them what they are going to do to market your home. This is an important one. It isn’t enough to take blurry photos with their cell phone and put them on MLS (We, unfortunately, see it all the time). Anyone can do that. The best agents are TOP Marketers who know how to position and advertise your house to get the best possible outcome for you with the least amount of stress. This includes having a professional photographer. Doing your due diligence can not only protect you from incompetence but also ensure that you are going to get top dollar for your home. Bottom line is, you want an expert, with a track record of success, who is professional, and who sells homes full time.
*Please note – This is our perspective, we cannot speak for any other agents or brokers. There are many agents who don’t do things this way. This is based on our process, perspective, and our strategies.
Initial Walk-Through and Needs Analysis
The second step in the process is inviting your Real Estate Agent to your house to do a walkthrough. They walk the lot, drive the neighborhood, look at similar listings & comps, and check out all aspects of your home. A good agent is looking for selling points, updates, and amenities that make your home more marketable. This helps to determine the desirability of your home compared to other similar properties nearby that have sold recently and thus, a recommendation for a listing price. Many agents come prepared with a listing price recommendation right at that meeting.
We personally don’t bring an exact price for your home on the initial walkthrough. We research the home and its comparable listings first so we have an idea of its general value, but not a specific recommendation at that time. The reason is, we haven’t seen the inside of your home. We prefer to see the house, drive the neighborhood, and then review comparable properties to find the exact price for your home. This way we can compare the conditions, amenities, locations, and layouts. Then we sit with you (or meet over zoom) and we discuss our recommendations. We show you the homes we are comparing the sale to, answer questions, and discuss our clients’ options.
CONTACT THE COURY TEAM REALTORS HERE FOR A FREE IN-HOME CONSULTATION
Establish The Right Price
As I stated previously, establishing the right price is one of the most important parts of selling your home. Try not to inject emotions into what you think the house is worth - because no buyer will. The price must be chosen based on data. Your agent should be an expert at researching comparable sales and aggregating all of the data, making adjustments based on tangible differences, and recommending a listing price. You obviously don’t want to underprice your home, but you also don’t want to overprice your home either. Overpricing may be more detrimental in the end, as the house will sit a lot longer and develop a stigma. You lose a lot of viable buyers while your house sits. Ultimately, it’s up to you what you list your house for. Just be sure to make the decision based on data and not emotion.
Listing Agreement, Deferred Showing Arrangement, and Other Important Documents
Once you have chosen a listing agent to help you sell your home, you will sign a listing agreement. Sometimes, the agent will want to defer showings (that is, to not show the house for a few days and ask all interested parties to go to the open houses instead). This is something we often do, for a few reasons. We want to run advertising, social media marketing, and allow exposure time for the maximum amount of buyers to see the home is on the market. This is to your benefit. The more buyers interested in your home, the higher the likelihood your home will sell, and that it will sell with multiple offers depending on the market conditions. Multiple offers mean people are competing for your home and can result in a higher list price.
There are other documents you will need to sign as well, depending on your location. In RI it is required by the state that all sellers have a signed sales disclosure. This is where the seller discloses any known defects with the house. In general, this protects the seller as you have disclosed all the defects you know of. The buyers will be required to sign this stating that they have had time to read it, understand it, and accept the house with these defects. States also require a lead disclosure to be filled out, asking if you have ever tested for lead in your home. (or that you have no knowledge of lead).
Also, in the states we serve (MA & RI), we are required to have the seller sign a “mandatory relationship disclosure”. This states that your agent is representing you, specifically as the seller agent. Some other forms that may be required that are related to the strategy your agent is implementing: deferred showing, and coming soon disclosure. These are all separate forms that are required based on the strategy you and your team are putting in place, and in some cases may be mandated by the state.
*Be sure to read these thoroughly- this is not meant to be taken as an interpretation of your contracts. You are responsible for your own due diligence. Consult an attorney or your agent for questions or concerns about your contracts.
Preparing Your Property
A talented real estate agent will create a list of to-do’s to have you complete prior to taking photos of the home. Studies have shown that there are simple things that one can do to increase the desirability of your home. Your agent may ask you to declutter, remove personal items, pack, paint, or move things. Also, these same studies have shown that when there are a lot of personal items such as family photos, and clutter on countertops, dressers, etc. buyers have a difficult time imagining their personal items there. This ultimately can make your home less desireable to potential buyers.
In addition to that, there are other tricks of the trade that can help increase desirability. Simple things like neutral paint colors can brighten a dark space and make it feel more inviting to your buyers – making them feel more at home.
The name of the game is to make your potential buyers feel comfortable, and feel like they are “at home”. We want our potential buyers to imagine themselves living and thriving in the space. Buying a home can be emotional for buyers too. Your agent’s job is to help you get top dollar for your home and get it sold, so they should be giving you the tools you need to succeed. They should be experts and have the knowledge and experience about what sells a home, so follow their lead.
If you are selling, you are likely going to have to pack many things into boxes. We tell our clients to begin thinking like they are going to be moving to a new home within 45-50 days. Once your home is under contract a buyer’s lender will need approximately 45 days to get their mortgage complete. This is a great time to purge and sell unused items that you have. Make the house as open, bright, clean, and inviting as you can. Remember, less is more when it comes to decor and furniture. Once your house is “show ready”. This is when our team schedules the simple staging to be set up and professional photos to be taken.
Launch “Coming Soon” & Internet Marketing Campaign
Once professional photos are edited and complete, and the best photos are chosen to display your home, it is time to begin marketing. We want to put your home’s most desirable features on display for all to see. So we often have our team create videos, specialized social media posts, mailers, paid ads, and more – to push your house out to as many potential buyers as possible. With The Coury Team, we do additional marketing such as creating a website for your home, adding an additional sign in front of the house along with your for sale sign that allows drive-by potential buyers to text the website and get the listing information and photos, reverse marketing, call our clients and other agents, and so much more. This helps to create the “buzz” that will help get your home sold fast, for top dollar, and hopefully with multiple bids over the asking price.
Our Team specializes in marketing, especially on social media and the internet. To start, we do this by creating a “Coming Soon” campaign prior to the listing going live officially. Our marketing team works at pushing your home out on social networking sites. We post Facebook, Twitter, Pinterest, Nextdoor, and Instagram posts (and boost them with paid ads from the back end). This helps to blast the home out to your circle and your network’s circle. Our paid ads bring another layer of exposure beyond our connections and out into the masses. We use AI and highly advanced technology to target people who are looking to buy homes on the internet. Many times, we find buyers this way before we are even showing the house. Then we schedule them for showings at the open house.
Finally, we begin our “New to Market” or “Just Listed” campaigns advertising the home and the open houses we’ve scheduled. The goal is to have a line of people down the street waiting to see your house at the open house.
Listing The Property Officially
Next, your house goes live – “Active” on MLS. This is when your home has to be ready for showings. We typically schedule it to be active a day or two before the open house to provide for enough time for the house to get ample exposure. Sometimes prior to the open house agents will do a mailer to your neighborhood or even walk the neighborhood and leave fliers. This can sometimes entice your neighbor’s family members to buy if they want to live near one of their loved ones.
Hold Open Houses & Start Showing the House
When the weekend arrives, it is time to do open houses. You should be sure to clean and stage the house to the best of your ability. Usually, we will have all of the items we used for staging for the photos with us and redecorate the house. It is also very important to take any valuables with you or lock them in a safe. We are there to watch the house but sometimes the open houses can get busy making it difficult to keep an eye on everyone at all times. I always advise clients to take valuables and to then check all windows and doors are locked after an open house.
Open houses are an extremely important part of selling your home. Listings that don’t hold open houses may sit on the market longer and ultimately may suffer the consequences of reduced exposure to the pool of potential buyers. Think about it. This isn’t a Versace Pocketbook you are selling. For many people, this is the biggest purchase of their lives. They want to see the home. This helps them to imagine themselves living there, entertaining their loved ones, playing in the yard, etc. People want to be in the space, so they can mentally determine if the home fits their needs and desires. Bottom line, it is better for you if you hold open houses.
Review Offers & Negotiate
After a long weekend of open houses, hopefully with lines of potential buyers down the street waiting to get in… It’s time to review offers. We typically advise our clients to set a deadline for all offers after the open house and to wait to review the offers until all offers are in. This is in your best interest in our opinion. The more offers, the more competition to win the home, and the higher the likelihood you will get top dollar.
Your agent should disclose any and all offers to you – whether they are in writing or verbal. They should highlight the pros and cons of each. We have a summary worksheet we put together for our clients to simplify the information for our discussion. There are so many important considerations when determining the winning bid, beyond the highest offer.
Believe it or not, the highest offer may not always be the best offer. Why? Because the strength of the offer may be more important. If someone offers $100k over asking, but do not have strong financing, are they really your best bet? The bottom line is your agent should be a skilled communicator and experienced enough to evaluate the pros and cons of the offers. We go so far as to contact each agent AND their buyer’s lender to discuss the strength of their prequalification. Buyers fall through sometimes, we want to be sure yours does not. *Note, Agents must always abide by fair housing laws.
When you put this all together, the picture becomes clearer. Our listings in 2020, had an average time on the market of 3 days before going under agreement. That’s pretty fast. Additionally, our homes had an average of 4 offers at the deadline on the Monday after our first open house. We believe that our professional services prior to listing, our state-of-the-art marketing, and our listing strategies were the reason our clients averaged 106% of the asking price on the sale of their homes in 2020. Some of our houses sold for up to $50,000 over the asking price this past year. To be clear, there is no guarantee, but we believe the harder we work to market your home and prepare in advance, the higher the likelihood we will yield strong results.
Negotiations, Contracts, Attorneys, and Final Purchase & Sale Agreements
Sometimes, there are negotiations that need to be done before finalizing your transaction. For example, we’ve had buyers ask for a piece of furniture to stay, a repair request, or asking to keep the washer and dryer. These things will happen, and it’s up to your agent to walk you through the negotiations and advise as to the best approach. Many people think that the sale of their home has to be an adversarial process. Most experienced and effective agents think “win, win”. The goal is to work through the process so that all parties feel like they won. In the end, all of the terms of the agreement need to be spelled out in the contracts, agreed upon by all participating parties, and then signed and executed.
There are some differences between contracts in RI and MA, but for the most part they do the same thing. Your agents can draw up your initial contracts, but it is in your best interest to hire a strong real estate attorney to review them. They often finalize your purchase and sale agreement. Agents who do this every day will have a network of professionals they have experience working with, and more often than not can recommend someone for you that they know has been reliable in the past.
This is when the attorneys begin their legal work. They essentially coordinate and negotiate all of the legal and financial facets of your transaction. If an issue arises, they coordinate with your agent to resolve the issue. They are the ones who spearhead the process of closing and record the transaction and deeds when all is said and done. All in all, they are there to protect your interests. From here, your agent takes on the role of project manager. They will oversee (but don’t have control over) the buyers/agent, their inspections and appraisals, the attorneys, and the mortgage company. While all of these stakeholders are working, it is the agent's job to ensure deadlines are being met, negotiate out issues, and ensure the smooth progression of the transaction. Some agents have assistants, relationship managers, or transaction coordinators to help them with this.
Inspections & Negotiating Any Issues
Next is your home inspection. The buyer more often than not includes an inspection contingency in their contract. This allows the buyer time to bring in a qualified inspector to evaluate the house. Their job is to find issues with the house. This allows the buyer to know about any defects prior to moving forward in the transaction. Sometimes buyers will ask for a concession of a certain amount of money toward closing costs in lieu of repairs. However, in the strong seller’s market, we are in, buyers aren’t really in a position to ask for repairs because if you have multiple offers you can just go to the next person in line.
The last step for sellers in the process is the appraisal. More often than not, if a mortgage is involved, the appraisal is another contingency that is required in the contract. This contingency allows the buyer – for the purposes of obtaining a mortgage usually, to have a licensed and certified appraiser to evaluate the property and its value. An appraisal is an involved process requiring appraisers to dig deep on property history, zoning, comparable sales, etc. The value they come up with can prevent the buyer from being able to get a mortgage if that value is below the agreed-upon purchase price. In this case, you can either lower the purchase price to the appraised value, terminate the sale, or in some (but few) cases the buyer can pay the difference in cash. This protects the mortgage company from lending money to a buyer, for a house that isn’t worth what they are lending.
Coordinate With Attorneys, Mortgage Broker, Moving Companies, Contractors, Etc.
From here, the attorneys may have documents that they need from you or things that they need to get to you. Little odds and ends. Rarely, if there was something wrong with the home that needed repair, the sellers may need to coordinate with a contractor for the repair of an issue. Your agent is working with the buyer's agent and lender behind the scenes to ensure that they are meeting deadlines and that they are on track to get their mortgage commitment. Ultimately they are making sure that the buyers are clear to close before the closing date. This is the light at the end of the tunnel.
On the seller side, its all planning and packing. You might be buying a house somewhere else at the same time, in which case it is helpful to use the same attorney so they can coordinate the closing on the home you are selling with the one you are buying. This also allows for a smooth transfer of funds, because your attorney can wire funds for the purposes of closing on your new home. It is common for sellers to sell a home in the morning and close on their new home in the afternoon.
Final Walk-Through
Usually the day before closing (or the morning of), the buyers have the right to a final walk-through. This is to ensure the home has remained in the same condition it was in when everyone agreed to the terms of the sale. For example, the seller hasn’t removed a wall or there isn’t extensive damage. Normal wear and tear are expected and acceptable, but there cannot be anything damaged, missing, changed, or broken that didn’t exist when the agreement was made. The home has to be exactly as it was – you cant even swap out a light fixture.
Closing
The closing is coordinated by the attorneys. Before the coronavirus, it was a joyous day when all met and sat at a table to sign final documents. There isn’t much for the seller to do, so they typically are there for a short time to sign final documents and then leave. After leaving your agent or attorney will notify you of when the transaction is on record and the status of the funds. Attorneys all have different ways they handle this and funds. Some cut checks, some wire money, etc. Ask your attorney well in advance about this so you aren't surprised by anything.
In the end, we strive for smooth transactions where all parties are satisfied. Does it always happen that way? No. In life there are unforeseen issues you may have to work through, so be flexible and think win-win. Good luck! Feel free to contact us anytime with questions.
~ Eric Coury
**Disclosure: The views and opinions expressed in this blog are those of the author alone and do not represent the views or opinions of Keller Williams or any other party. The contents of this blog are not meant to be interpreted as individualized advice. Please consult your tax advisor, attorney, broker, and/or financial advisor for specifics on your situation. Copyright © Eric Coury, Colonial Classic Realty LLC
