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SELLING Your Home The essential information you need to know to be a better seller.

Spring/Summer 2016

“

Successful sellers are...

sufficiently motivated to go through the challenges of marketing and selling their home in order to make a move.

”

TABLE OF CONTENTS 1

WHY SELL YOUR HOME NOW?

THE IMPACT OF PRICE & CONDITION

A LOOK AT HOME PRICES

PRICING IT RIGHT

SHOULD YOU SELL YOUR OWN HOME?

SALE PRICE: FSBO VS. AGENT

REASONS A HOME SELLS

5 HOME STAGING TECHNIQUES EVERY SELLER SHOULD DO

6 DEMANDS TO MAKE ON YOUR REAL ESTATE AGENT

SELLER TOOLS YOU NEED

WHY SELL YOUR HOME NOW?

DEMAND IS STRONG

BEST TIME TO MOVE UP

In our current market, buyer activity is high! The latest Buyer Traffic Report from the National Association of Realtors shows that buyer demand is very strong throughout the country. These buyers are willing and able to buy and your home might be exactly what they’ve been looking for!

If you have been wanting to move to a larger, more expensive home, now is the time! Prices are projected to rise over the next year so moving to a higher priced home will cost you more in both your down payment and mortgage payment if you wait.

COMPETITION IS LOW

IT’S THE BUSY SEASON

Housing inventory is still extremely low in most markets. There just aren’t enough homes for sale to satisfy the high buyer demand. This makes for a good seller’s market because home prices are being pushed up. In this type of environment, homes are selling faster and for more money. Take advantage of these circumstances while they’re here!

Spring is peak season for real estate. As the weather warms up, many buyers join in the house hunt. Getting your house on the market now will keep you from missing the buying rush. ©2016 Semonin Realtors®. All rights reserved.

THE IMPACT OF PRICE & CONDITION

Great (price)

PRICE

Not so Great (price)

There is a difference between putting your home on the market and putting your home in the market. It all has to do with the price and condition of your home. A REALTOR® knows the market and what buyers are actively looking for. They can advise you on what your home needs to be in the market.

Great (condition)

CONDITION

Not so Great (condition)

IN THE MARKET

ON THE MARKET

OFF THE MARKET

If your home is IN THE MARKET, home buyers consider your home has an “acceptable price” and/or “acceptable condition”. A home in this category is more likely to have showings, offers, and contracts.

If your home is ON THE MARKET, home buyers do not accept your price and/or condition. This means you will have few, if any, showings, offers, or contracts. However, an adjustment in the listing price, or an improvement in condition, could enhance the attractiveness of your home to buyers.

A home is OFF THE MARKET when the listing has expired, been withdrawn, or has been cancelled. This is often the result of a home which did not meet market expectations. Neither the price nor condition changed enough to change the outcome.

A LOOK AT HOME PRICES The Federal Housing Finance Agency (FHFA) releases quarterly reports on the year-overyear changes in home prices. Nationally, year-over-year home prices are up 5.70% and they have increased 19.91% over the last 5 years. 1-Yr

5-Yr

KENTUCKY

3.87%

10.47%

INDIANA

3.84%

12.86%

USA

5.70%

19.91%

Home prices in each state appreciate at different rates as shown below. Looking at these percentage increases on a state level is important if you are planning on relocating to a different area of the country. The longer you wait to make the move, the more you might be paying!

SOURCE: FHFA 3

PRICING IT RIGHT

Representation of prospective buyers interested in property

The first days of the listing period are when the greatest activity occurs while selling your home. If you are seeing little activity on your home after a few weeks, it may be a sign you have priced it too high and may want to consider a price reduction.

May want to consider a price reduction if activity begins to trail off

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Many people think pricing their home a little over market value will leave more room for negotiation once they receive an offer. In actuality, overpricing will just discourage prospective buyers from looking at their property. A seller should price their home so that it maximizes the demand for the home. With this strategy, the seller won’t be fighting with a buyer over the price, but rather multiple buyers will be fighting each other over the house.

A recent article on realtor.com gave this advice: “Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

SHOULD YOU SELL YOUR OWN HOME? Your goal is to sell your home in the shortest time for the most money. You feel by NOT hiring a Realtor, you can save on the real estate commission by selling the home yourself. But there might be more to the process than you think.

CONSIDER THE FOLLOWING STEPS OF THE SELLING PROCESS:

1 Inspect your home.

Are there any repairs or improvements needed? Gutters and roof in good condition? New paint—inside and/or out? Plumbing and appliances in working order? Clean windows, walls, floors, garage, etc.

2 Make all necessary repairs/improvements. you begin to advertise your home.

All this must be completed before

Analyze competitive market. Investigate properties recently sold or “For Sale” in

your immediate area. Don’t forget to research prices and terms of sales in the current real estate market.

4 Check on financing.

Determine alternatives in financing for your prospective buyers.

5 Obtain yard and open house signs.

Purchase or design a weather-proof “For Sale” sign for your front yard. Don’t forget “Open House” signs. On the day of your open house they need to be placed in strategic locations around your neighborhood—on main roads. (Don’t forget to remove them after your open houses.)

Advertise. Take quality photos and video of your property. Create a posting on the

numerous real estate listing websites, social media and other forums. Check rates for newspaper, homes magazines and television advertising. Create a budget. Write and design an advertisement that will attract the right buyers to your property.

7 Contact out-of-town buyers.

Prepare a plan to reach prospective buyers moving to town. Out-of-town buyers account for a major share of today’s home buyers.

Show home to prospective buyers. Make sure you are available, and your prop-

Hold open houses. Schedule your open houses on weekends. To make your property

erty is always prepared, for a showing. A potential buyer may call anytime and wish to see the home.

more inviting, place flowers in some of the rooms. Scented candles are a nice touch and nothing is more inviting than the smell of freshly baked bread or cookies. It is important that you are available to answer prospective buyers’ questions: information on schools, parks, shopping, churches, etc. Be discreet; buyers may feel uncomfortable with the homeowner around.

10 Prescreen prospective buyers.

Learn to separate “lookers” from qualified buyers. Ask for names and phone numbers. Follow up with phone calls; be careful not to sound overly anxious.

Negotiate with buyers. Throughout the negotiation it is important to remain calm

Home inspection preparation. Many buyers stipulate in their contracts that the

and act as an impartial third party. This can “make or break” a sale.

offer is contingent upon a favorable inspection. Therefore, find out what will take place when your home is inspected and be prepared to respond to problems that may be uncovered. You must be available when the prospective buyers schedule the inspection. A typical inspection will last one to three hours.

Educate yourself on radon testing. More home buyers are now insisting on

Finalize sale. Obtain all forms necessary for the legal sale of your property. Your at-

Purchase your new property. While marketing your current property, locate and

radon tests as part of the home buying process. Contact your county public health department, or call the Environmental Protection Agency (EPA) for more information. Your understanding of radon could be your best ally and eliminate problems with buyers by sounding overly anxious.

torney and banker can assist you with all the details. If not, remember to negotiate with the buyer(s) all final terms: such as price, financing, inspections, date of closing, date of possession, etc. A final walk-through should be planned (have a witness present) in order to prevent any disputes.

negotiate your next purchase. Both transactions should take place at the same time. This schedule will enable you and the buyer of your property to move at the same time.

As you can see, there is a lot that goes into selling a house. A good, full-service RealtorÂŽ has a lot to offer and will complete each of these steps for you.

SALE PRICE: FSBO VS. AGENT Some sellers assume they would net more money from the sale of their home if they didn’t have to pay a real estate commission. However, as you can see below, studies have shown that homes typically sell for more money when listed with a real estate professional. The 2015 Profile of Home Buyers and Sellers from the National Association of Realtors® revealed that: FSBO homes sold at a median of $210,000 last year. When the buyer knew the seller of the FSBO home, the median selling price drops to $151,900. Yet, agent-assisted homes sold for a median of $249,000 - nearly $40,000 more than the typical For Sale By Owner home.

MEDIAN SELLING PRICE FSBOs vs. Agent-Assisted Homes

$249,000 $210,000 $151,900

FSBOs when sellers knew the buyer

All FSBOs

Homes Sold by an Agent

REASONS A HOME SELLS There are a variety of reasons a house will sell. Some are out of your control, but others can be changed or modified so that your home can be sold for the best price.

REASONS BEYOND YOUR CONTROL LOCATION Some neighborhoods are more desirable than others. The better the location, the more money buyers are willing to pay. But a home can’t just be picked up and placed somewhere else. For a house to sell in any location, its listing price should reflect its location and the value of the homes surrounding it.

MARKET CONDITIONS The economy, interest rates, and other factors impact the condition of the real estate market. Unfortunately, all of these things are out of a seller’s control.

COMPETITION High buyer demand and low housing supply makes it easier for the homes that are on the market to sell. When buyers have more to choose from, sellers have more to compete with. Sellers cannot control the level of competition they face, but they can control factors that will help their home outshine the others.

REASONS WITHIN YOUR CONTROL LISTING PRICE Sellers typically have two major goals: 1) to sell their home for the most money possible and 2) sell it fast. To effectively meet both of these goals, the listing price has to be just right. If your home is not selling or getting a lot of buyer traffic, it could be a sign it’s priced too high. Reducing the price is something you can do to help attract offers, but, of course, no seller wants to price their home too low. Work with a REALTOR® to set the listing price of your home. They can explain current market trends and show you prices that comparable homes in your neighbhorhood have recently sold for.

TERMS OFFERED

Attracting buyers sometimes has more to do with the condition and price of your home. Many sellers use certain incentives to help compete in the marketplace. Offering to pay closing costs or including a home warranty with the sale of your home can help encourage buyers to purchase your property over others.

CONDITION OF THE PROPERTY You don’t need to renovate your home from top to bottom in order for it to sell. However the better condition your property is in, the easier it is to sell. Making repairs and staging your home will make for a more impressive presentation to buyers.

EASE OF SHOWING A home purchase is a huge decision for buyers, so they want to be able to actually see a property before buying it. The more buyer traffic a home gets, the more likely it is to sell. Sellers need to make sure their home is available to show to buyers, sometimes even with very short notice.

CHOICE OF REALTOR/AGENT A Realtor’s job is to market your home. Some real estate agents do this better than others. There is more to marketing a home than posting it online. A good Realtor can also provide professional advice and insight as to how you should prepare and price your home to allow for a quick and valuable sale. When you decide to sell your home, interview a few agents first and then make your choice.

5 HOME STAGING TECHNIQUES EVERY SELLER SHOULD DO

To sell your home quickly, staging is a must! But you don’t have to spend a fortune to get your house showcase ready. These 5 simple tips can make a huge difference to buyers and may only cost you a can of paint and some elbow grease.

DE-CLUTTER AND DEPERSONALIZE

During a showing home buyers are there to see your house, not your stuff. A cluttered home is a red flag to buyers that storage space is lacking and distracts buyers from actually seeing the home’s true space and potential. It is also important to remember that buyers are looking for a house that feels like home to them. Family pictures and other personalized items can make it difficult for buyers to picture the home as being their own. Many people have found renting a storage unit to store excess furniture and clutter is worth every penny, getting their house sold for a higher price and much quicker than expected.

USE FURNITURE TO SHOW PURPOSE AND SPACE

When touring your home, potential buyers will be looking primarily at how they will be able to use the space and rooms. Clear all clutter and excess furniture and arrange furnishings to reflect how functional a space is. To avoid buyers becoming confused by extra rooms, give each room a clear purpose. For example, place a desk and bookshelf in a room to stage it as a home office. Open-concept layouts can also leave buyers puzzled when thinking about what to do with one large space. Group furniture to create sections; use couches and chairs to act as walls do and face them away from the dining table. Position furniture to make the traffic flow in a room practical and obvious.

APPEAL TO ALL BUYERS WITH GENDER- & AGE-NEUTRAL DÉCOR When selling your home remember that you don’t know exactly who you are selling to. Keep things neutral and simple so the home will appeal to buyers whether they are male or female, a young bachelor or a retired couple. Think of how hotel rooms are decorated, neutral and clean. Paint the walls a soft, neutral hue and use simple bed coverings and curtains. Bold wall colors can be overwhelming and make a space appear smaller than it is, and patterns like floral or camouflage can be too strong and unappealing to certain buyers.

CLEAN, CLEAN, & THEN CLEAN SOME MORE!

Prospective buyers are going to look at every room up and down, right to left, inspecting places you wouldn’t expect. Polish your appliances, clean inside cabinets and drawers, dust ceiling fans, vents, and blinds, you should even make sure your dishwasher and washer and dryer are empty and clean. Whether you decide to clean yourself or hire professional help, a clean house is vital. It gives buyers the impression that the home has been well maintained and cared for.

DON’T FORGET CURB APPEAL

Just like many people judge a book by its cover, many buyers judge a house by its curb appeal. It is their first impression of the home and determines what kind of attitude buyers will have when entering your house. Poor exterior appearance can cause a buyer to immediately become doubtful and incapable of having an open mind. Major landscaping is not always necessary, but the lawn should looked nicely manicured with a fresh mow, trimmed hedges, raked leaves, and swept porches, decks, and walkways. A coat of paint on the front door and porch railings can also get the home looking clean and new.

6 DEMANDS TO MAKE ON

YOUR REAL ESTATE AGENT

Selling your home is not as simple as putting a sign in the yard and waiting for a knock on the front door. Constantly getting and keeping your home ready for showings, having strangers walk through every room of your home, wondering when you’ll get an offer, and completing all the paperwork correctly are just some of the stresses that come along with selling a home. Hiring a real estate professional can greatly reduce the challenges and headaches you might experience when selling. It is extremely important that you select the right agent to sell your home. In order to do so, you must be able to distinguish between the average agent and the exceptional agent. An exceptional real estate agent will always be worth more than the fee they charge.

BE HONEST Honesty is an extremely important quality for a real estate agent to uphold. The selling process can already be complicated enough, but an agent who does not openly and honestly communicate with their clients can make it much worse. For example, many real estate agents will agree with the price you want to list your home for just to secure the job, only to convince you later that a price correction is necessary. Demand an agent to prove to you that they believe in the price they are suggesting, backing up their claims with comps and statistics, as well as explaining the appraisal process. A home must sell twice: first to the buyer and then to the bank. It is your agent’s responsibility to advise you on a price that will allow for a quick and stress-free sale, if they do not, it may be a red flag that they are not being completely honest with you.

UNDERSTAND YOUR TIME TABLE Whether your move revolves around the arrival a new family member or the start of a new job, you will be trying to schedule your move around some sort of timetable. This can be very emotionally draining, especially if your real estate agent shows no appreciation for the timetables you are setting. While your agent cannot pick the exact date of your move, they should be conscious of your needs and exert any influence they can to make it work.

KEEP YOU INFORMED/EDUCATED Lack of communication is one of the biggest complaints dissatisfied sellers have of their agents. As you watch the clock tick, you will want to know what your agent is doing out there to get your home sold. You will also want to know if and when any challenges arise or if they discover something that needs to be done (e.g. repair, price correction). Good agents will know how to deliver good news, but great agents know how to deliver the good and the not-so-good news, all of which you need to know.

REMOVE AS MANY CHALLENGES AS POSSIBLE Sellers already have enough on their hands when preparing for a move, so it is imperative that your agent knows how to handle any challenge that comes up. Expect your real estate agent to have strong negotiation skills—it is their job to be your voice. If the agent does not represent a seller during each stage of the selling process, or does not do everything they can to get the most money for their clients home in the least amount of time, they have not served their purpose.

HELP WITH RELOCATION If you haven’t already chosen a new home to buy, make sure your agent is willing and capable to help you coordinate your move. There is nothing worse for a seller than realizing they won’t have a roof over their head the night of closing. Furthermore, no seller wants to be stuck paying two housing expenses (whether it is rent or mortgage). If you are buying and selling at the same time, your agent should help you be able to close on your current home and immediately move into your new one. If you are relocating to another part of the country, some agents will help you by referring a relocation service or an agent in your new hometown that can help you with your move.

GET YOUR HOME SOLD! Every seller has a reason for putting themself and their families through the moving process. Whatever it may be, your motivation for selling your home is important to you and your agent should always respect that. Make sure your agent is utilizing every part of the marketing plan that they presented to you and are maintaining frequent communication with you. Consistently remind them that selling your house is why you hired them, and remember that the commission you are paying them should be earned. Some agents will simply put a sign in your yard and you won’t see them again until the closing, great agents will be there with you through every step of the selling process.

SELLER TOOLS YOU NEED! SEMONIN.COM

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