Seller Frequently Asked Questions

Home Pricing

Q. Doesn’t it make sense to price our home higher because buyers will negotiate the price down?

A. Because virtually 100% of today’s home sellers have their home marketed on the internet, today’s home buyers can shop on-line anonymously. When perusing on-line, home buyers are able to compare your home against other homes to see if they feel it is a value (price and feature). In essence, they are able to judge your home without even having to make an appointment. If you price a home too high, many buyers will make the decision to not even view your home in person. Your home will then remain on the market for months, while you continue to pay your mortgage payment, basically eroding any sort of profit you were hoping to make by pricing it higher. The best strategy is to price it correctly so that prospective buyers searching on-line believe that their offer would even be considered.

Q. Does it make sense to test the market with a higher price for a short period of time?

A. Because newly listed properties typically attract the most interest from buyers during the first three weeks, it is imperative that you price it correctly to attract educated buyers. When looking on-line, buyers are going to compare your home with other homes on the market. If they do not perceive your home to be a value (price and features), they will not make an appointment to see your home, thereby causing it to languish on the market. The longer the home stays on the market, the less you can expect to receive for a selling price because buyers feel that a seller will take less for a home that has been on the market for a long time. Moreover, if you do happen to get the price you want for your home, you run the risk of it not appraising for the full price. When establishing your sales price, it is important to also consider your objectives – do you want to sell it quickly or are you looking to achieve the highest price possible?

Q. If I list my home at or below the market, won’t buyers think there is something wrong with it?

A. Because buyers have access to a wealth of information on-line they, now more than ever, have a keen sense of a home’s real worth. Moreover, because your home will presumably have an adequate amount of photos showcasing it to prospective buyers, they will be able to see the quality of your home on-line. Additionally, buyer agents will know it is priced realistically and they will let their clients know. I think that pricing a home below its market value is a great strategy. It’s all about getting more people in the door to hopefully create a situation where you will have multiple offers to choose from. A Multiple offer situation will ultimately drive up the sales price.

Q. What are methods to determine value?

A. There are two methods that can help sellers determine price. The first method, a Comparative Market Analysis (CMA), is prepared by a listing/seller’s agent and is used as a means to informally provide a reasonable price range at which a seller may list their home for sale. The CMA typically contains local real estate activity for the last 90-120 days pertaining to active housing inventory (used to show how your home compares to the competition), under contract housing inventory (demonstrates what price range was sufficient for an offer to be tendered), and sold homes (shows the exact price at which the home sold). There is no charge for the CMA and should not be confused with an appraisal, which is the second method. Other data to consider in the CMA is list price versus sold price and days on market.

An appraisal, performed by an appraiser hired by the seller, is also designed to help determine the value of the home. Just as in a CMA, the appraiser makes an on-site visit to the home to see first-hand the home’s condition to make an evaluation against similar homes in the area.

Listing Your Home For Sale

Q. Do I have to use a Realtor to sell my home?

A. While I do not recommend it to the uninitiated, you do not need to work with a Realtor or sell a home. Please understand that we are professionals that can guide you through the process. But, if you decide to be unrepresented, just make sure you have the knowledge, capability and time to:

Comply with all state and federal laws
Understand the current market environment
Properly price home
Properly prepare home for sale
Understand the Contract forms that you will be using
Market your home to the widest audience
Make appointments to show your home
Sellers – Negotiate so you can maximize your profits
Ensure that the buyer adheres to contract terms
Not engage in activities that will result in legal ramifications.

This is a complicated process that can have real negative implications. Please be careful when working without an agent. We are here to protect you throughout the process.

Q. When is the best time to list a house for sale?

A. The simple answer is – whenever you are ready to sell your home. While Spring is typically when most homes go on the market, homes go up for sale all year long. During the Spring, sellers will have more competition for their home because there are typically more sellers going on the market during this time. However, there are more buyers as well. During the off-peak seasons – Fall and Winter, we typically see fewer homes go on the market, and fewer buyers. But you can be assured that the buyers who are looking during these seasons are extremely serious just as the sellers are.

Q. How long will it take for my home to sell?

A. It depends. All sellers need to understand the temperature of the market. The best way to do that is to have your Realtor, provide you with a market analysis. This analysis will show you:

Active homes, which represent your competition,
Under contract homes, which represent price points that buyers felt to be enough of a value to make an offer
Sold homes, which show you definitively what a home sold for relative to its list price.

When reviewing the details of this market analysis it is important to understand factors that include days on market and list price versus sold price ratio. But looking at these numbers is not enough, you need to know the features and benefits of the properties in this analysis to see how they compare to your home to understand why homes are priced and/or sold for what they did.

Q. Should I fix my house up before it goes on the market?

A. To successfully sell a home, it needs to “win a price war and a beauty contest” all at the same time. If you hope to achieve the highest selling price and the shortest amount of time on the market, you want to make certain that your home shows well. The type and amount of work you do depends largely on the price you’re asking, the timeframe you have to get the home ready based on your listing deadline, and the present condition of the house. Quite frankly, potential buyers want to buy a home that shows well and is well taken care of. Buyers will steeply discount items that they feel need to be improved or replaced. Moreover, homes that do not show well also give the buyer the impression that it was not well taken care of and that there could be other issues.

Q. What should one do to make the home show well?

A. Regardless of the market, all sellers should make certain that their home has the curb appeal to draw potential buyers into their home. Keeping your lawn mowed, shrubbery trimmed, trash removed, toys off the lawn, etc. On the inside of the home, make certain that the walls are freshly painted, that the home is clean and de-cluttered, that there are no strong odors, and that personal photos and mementos are kept to a minimum. Because the buyers should be able to envision themselves living in your home, it is best to limit distractions.

If improvements need to be made, make certain that you do not over improve – start with simple improvements such as painting, carpet cleaning/replacement, replacement of fixtures, etc. If more significant improvements are required, consider making those improvements only if the local real estate market will support the cost of the improvements. If licensed contractors are required for any of the work, use them and pull permits as necessary.

Q. Should I make any major home improvements?

A. Certain home improvements are useful to almost everyone and have proven to add value or shorten the time on market. These include adding central air conditioning; building a deck or patio; finishing the basement; doing some kitchen or bathroom remodeling (updating colors on cabinets, countertops, appliances, panels, etc.); and adding new flooring. On the other hand, improvements that return less than what they cost are generally ones that appeal to individual personal tastes that not everyone may share. These can include adding fireplaces, wet bars and swimming pools, or converting the garage into an extra room. The challenge that comes with any home improvement designed to help sell your house is recouping your investment. There’s always the risk of over-improving your house — that is, putting more money into it than neighborhood prices will support. It’s always best to chat with your Realtor to help you determine what improvements to make.

Q. When selling a home what information must be disclosed?

A. In Maryland, sellers are required to disclose latent defects and material facts. Both of these disclosures represent information that a buyer would want to know about if considering your home for purchase. Failure to disclose these items could result in legal action so when in doubt always disclose.

Contracts

Q. What are contingencies?

A. Sales contracts typically contain several “contingency” clauses, or stipulations that the sale is subject to. Typical contingencies include a buyer’s ability to obtain financing, inspections (structural/mechanical, wood destroying insect, radon, chimney, well and septic, etc.); HOA/Condo association document reviews, etc. If any of the contingencies that were stipulated in the contract cannot be removed, the contract is declared null and void and any earnest money deposit should be returned to the buyer.

Q. Once a home is listed, how will prospective buyers gain access to view it?

A. Potential buyers gain access to a home through the assistance of either their Realtor, if they choose to work with one or the seller, in the case of a for sale by owner situation. The buyer’s realtor will make an appointment to view the home and receive all of the necessary information to gain access to the home. Buyers are not allowed to view properties unescorted.

Q. How do I best evaluate an offer?

A. Evaluating offers must first take into consideration your current situation, reason for selling or other objective. When evaluating an offer you will work with your Listing Agent (if you have hired one) to weight the importance of the following factors in light of those considerations – highest price, the most likely to close, with the least amount of risk or aggravation from the buyer. How you choose to weight these factors will be directly in proportion to what you deem as most important.

Q. Should I take a contract contingent on the sale of a buyer’s home?

A. The answer is, it depends. While the ultimate decision to accept or reject any offer is up to the seller, you want to understand the aspects of the home sale contingency and where the buyer’s home sale falls according to the following spectrum:

Is the buyer’s home on the market
Is the buyer’s home on the market but not under contract
Is the buyer’s home under contract
How far into the contract process is the buyer – You want to understand what contract contingencies of the buyer have been satisfied on the sale of their home

Depending upon where the buyer is in the sale of their home you may opt to accept an offer with a home sale contingency. But make sure if you do, that the one that you accept will have the highest likelihood of closing so that buyer may buy your home. A lot can go wrong in a normal non-home sale contingency contract. Adding a buyer home sale contingency definitely adds another layer of risk and complexity.

One way to hedge your bets is to include a Kick Out Clause addendum in your contract. This will allow you to void the contract with the current buyer if a non-home sale contingency buyer surfaces. Specifically, the kick-out clause allows the current buyer to have 72 hours to remove their home sale contingency or else the contract becomes null and void. You will then be able to accept the contract of the non-home sale contingency buyer.

Q. Do I have to make all the repairs asked for during the home inspection?

A. The repairs that you choose to make will depend on how the contract is worded and how motivated you are to sell. You may choose to adjust the purchase price or contract terms instead of making the repairs, but the buyer may not be obligated to accept. Major repairs will generally require a renegotiation. Your agent will be able to advise you on a case-by-case basis concerning common practices and negotiation tactics.

Marketing Your Home

Q. How do I reach the right potential buyers?

A. Property marketing is key to reaching the largest audience possible Because we really don’t know where you buyer will come from your Real Estate Professional should use marketing that targets buyers regardless of their location: Elements of this marketing include:

Internet-based marketing – Let’s face it, if you want to cast the widest net then you need to market your home on-line. Whether you choose to represent yourself or work with an real estate professional, you want to get your home on your local Multiple Listing Service. This will ensure that your home is seen by the widest amount of eyeballs. Properties listed on the MLS do not solely remain there. Through an internet data exchange the properties listing on the MLS end up on third party real estate sites that allow buyers to perform searches in addition to the search that a Buyer Agent has set up for their clients.
Social Media – Post the home on social media sites to generate interest.
Broker’s Open – A broker’s open targets other realtors who may have potential buyers. The Listing Brokerage’s Agent will send emails out to their colleagues inviting them to preview your property. Brokerages maintain a vast list of local realtors and this is a great way to get the word out
Open houses – Technically you already have a 24×7 open house and it is called the Multiple Listing Service. But, if you want your Listing Agent to host an open house be prepared for both neighbors and prospective buyers to view your property. Be careful, to secure valuables and any medications that you may have in the home.
Signage – Proper signage at the front of your home alerts both neighbors and prospective buyers that your home is for sale. Add a QR code and passersby can get immediate information about your home just by scanning it. Of course, they can also type in your address into any search engine or home search app.

Q. What should a seller expect from an open house?

A. The open house can be a valuable part of the marketing process, offering prospective buyers the chance to view houses in a low-pressure, “browsing” atmosphere. With that in mind, you shouldn’t expect it to generate a sale, at least not directly. What you should look for is interest expressed and requests for private showings made to your sales professional in the days following the open house. If many prospective buyers attend, it shows you that the property is attractive and saleable. If very few people show up, it can indicate that the price is too high, and cause you to look for ways to improve curb appeal.

Q. Should I try to avoid being at home when the house is shown?

A. You should definitely plan to be out of the house during any open house your sales professional has scheduled; the same goes for first showings to prospective buyers. People often feel uncomfortable speaking candidly and asking questions in front of current owners. You want them to feel as free as possible to picture your house as their “dream home.”