It is no surprise that the home buying process comes with a lot of concerns and questions. The home selling process is no different. Whether you’re selling your home for the first time, or selling your fifth home, the process is paired with many questions. This is simply due to the fact that selling your home is not practiced regularly, and the rules and regulations are constantly changing.
We’ve helped over 200 people sell their home, and our sellers always have the same questions and concerns:
- Home Selling Question #1: What is my home worth?
- #2 What if my house sits on the market?
- #3 When is the best time to list my home for sale?
- #4 What steps can/should I take to prepare to sell my home?
- #5 What am I required to disclose to buyers?
- #6 How much commission is charged to sell my home?
- #7 If I am not happy, can I cancel my contract?
- #8 What are common closing costs for sellers?
- #9 What is a sale contingency?
- #10 What is the difference between the list price and the appraised value?
Home Selling Question #1: What is my home worth?
This is the most common question and the first step in the selling process. In order to list your home for sale, we will have to determine how much it is worth. The value of your home is determined by the market and how much potential buyers are willing to pay.
When a home on your street sells, this affects the price of your home. You can get a quick and instant estimate by using online valutation tools. However, if you want a true valuation of your home, we can provide a more detailed report using comparables (homes similar to yours). We also offer an on-site consultation, which is free and there is no obligation. At this basic walk-thru, we will jot down notes of the home that could potentially increase its value, that the online tool would not be aware of (updated kitchen, bathrooms, etc.)
If you’d like to set up an on-site visit, call us at 443-692-8800.
#2 What if my house sits on the market?
If you’re home sits on the market, it’s most likely priced too high. Refer to the below graph:
Should I price my home higher to leave room for negotiations?
This question usually leads to common pricing mistakes. Many sellers believe it is common practice to list $5,000 more than what their Realtor® suggests, to leave room for negotiations. However, home buyers are more educated so there is no reason to leave room for negotiations. A home priced right will sell quickly and close to list price. A home that is overpriced can sit on the market and make potential buyers wonder “what’s wrong with the house, since it’s not selling?”
#3 When is the best time to list my home for sale?
Many homeowners hold off on listing their home because they’re waiting for the ‘right time to sell.’ But when is the right time to sell?
Many real estate professionals will say that Spring and Summer are great times to sell, and it makes sense. As the warmer months approach, potential buyers venture out looking for properties. The school year ends late Spring early Summer, so families want to move and be settled in a new home before the next school year begins.
Buyers or sellers market?
Another factor that makes it a ‘good time to sell’ is whether or not the market is a buyers market or a sellers market. A buyers market is when the supply (available homes for sale) exceeds demand (the amount of buyers looking to buy homes). Contrary, a sellers market is when demand exceeds supply.
If you’re selling your home in a buyers market, be prepared for your home to sit for awhile before you secure a buyer. This is due to the large number of properties that are available. If you’re selling in a sellers market, keep in mind that you have the advantage. It is likely that you will receive multiple offers to choose from. It is obvious that selling your home in a sellers market is the way to go. You can determine what kind of market it is by looking at available inventory, or asking your Realtor®.
#4 What steps can/should I take to prepare to sell my home?
You never get a second chance to make a first impression. This certainty holds true regarding homes. Potential buyers can make the decision not to see your home before seeing it in person – just by looking at photos online!
Here’s some tips to prepare your home for a successful sale:
- Hire an experienced Realtor® with proven results
- Ensure clutter is at a minimum
- Fresh Paint 🎨
- New Carpeting
- Ensure your home is odors are non-existent 👃
#5 What am I required to disclose to buyers?
When selling your home, it is important to disclose anything that you are aware of about the home. If you are aware of certain defects of the home (leaking roof, bad appliances, etc.), it is best to be upfront with this. Most likely, these issues will arise during the home inspection process. Some, you will be required to fix. However, if you are aware of these defects, it is best to fix them before putting your home on the market. This will help you avoid potential lawsuits once the home is under contract.
Material Latent Defects
In Maryland, sellers are obligated to disclose any known defects about their home, including material latent defects. These are defects about your home that may not be readily observable, but would materially affect the value of the home or a buyer’s decision to purchase it.
- Instabilities or cracks in the foundation
- Plumbing issues
- Leaks in the ceiling or roof
- Toxic conditions, such as the presence of lead, mold, radon or asbestos
- Faulty electrical wiring
#6 How much commission is charged to sell my home?
Another common home selling question is about the commission paid. Typically, agent commission is 6% and is split between the buyer and listing agent.
Commissions are negotiable, period. Don’t allow other Realtors® to tell you otherwise. With that being said, the phrase “you get what you paid for” holds true in real estate. If agents charge a really low commission, do you think they will be aggressive in negotiating the price of your home? Choosing a Realtor® based on lower commissions is a common mistake for home sellers. Because, either way, you will be paying at least 6% commission – whether or not that goes to your listing agent or the buyers agent.
#7 If I am not happy, can I cancel my contract?
This question is not one that sellers like to bring up. The expectation is that the home will sell quickly and for top dollar – their reasoning for hiring you. Every state and listing contract has different terms, but generally speaking, you can cancel the contract for any reason. You can, however, be responsible for any expenses incurred by the agent and/or brokerage.
Our listing contract, for instance, either party can terminate after 30 days, with 24-hour written notice.
#8 What are common closing costs for sellers?
Typically, the biggest chunk of change that sellers pay at closing is commissions (which can range anywhere from 4-8%). A few other fees are title insurance, government taxes and transfer charges.
See an example of expected closing costs on a home in Maryland.
#9 What is a sale contingency?
A ‘sale contingency’ is a common contingency that sellers will see in contracts. A sale contingency means that the buyers have to sell their current home in order to purchase a new home.
#10 What is the difference between the list price and the appraised value?
The appraised value of a home is the estimated value of what a home is worth – ‘estimated’ being a keyword. Homes are typically appraised after it goes under contract. The purpose of a home appraisal is to ensure that the price agreed upon by the seller and buyer is an acceptable value.
The list price of a home is the price set by the seller and Realtor® using comps (just listed, pending, and sold properties in the surrounding area).
What if the appraised value comes in too low?
In addition to ensuring the home doesn’t have any hazardous issues, the bank also ensures that the home is at least worth what the buyer and seller agree upon. There are several scenarios if the appraised value is below the purchase price:
The buyer comes up with the difference.
The buyer must pay the difference between the purchase price and the appraised value. This is an uncommon scenario, as buyers will find it hard to pay more for a home than the bank appraisal indicates it’s worth.
Seller makes concession.
This is the most common scenario when the appraisal comes in under the list price. Sellers have to agree to sell the home for what the appraiser deems is an acceptable value.
Challenge the appraisal.
Challenging an appraisal is not an easy task. The change of an appraisal is slim.
Cancel the transaction.
Unfortunately, cancelling the transaction is a common result of an appraisal coming in too low.