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Seller FAQ

Here are some of the common questions we hear from sellers. If you don’t see the answer you need please contact us. We’re happy to help!

How do I know how much my home is worth?

You’ve decided to sell your home but how do you know how much it’s worth?

We’re happy to value your home and provide you with an estimate of the net proceeds you’ll walk away with at closing. No reason to start preparing your home for sale until you know about how much it’s worth and how much you can expect to walk away with from the sale.

Every agent probably values a home differently but we take a two-step approach. First, we come to your home and tour it with you, learning about the location, the finishes, the condition, the layout, etc. This is a 30 – 45 minute visit at your home. Next, we take that information and then we go work on the Comparative Market Analysis (“CMA”), which is the comparison of your homes to other recent under contract and sold homes in your area. This is similar to an appraisal but because we’re not appraisers we can’t actually call it an appraisal.

The CMA will compare your home to other sales and it will make adjustments in value for differences between the homes. For example, if your home has a 1 car garage and all the other sales had 2 car garages we’d have to adjust for that fact. If your home was 150 square feet bigger than the other sale we’d have to account for that fact. It’s not a perfect science (it’s subjective!) but we want to do our best to make sure we’re basing your valuation on recent comparable sales and accounting for the differences to the extent possible.

When a home has very similar comparable sales we can provide a very tight value range, for example we may say you home is worth $395k – $400k. When a home is very unique and we can’t find great comparable sales to go off we may have to provide a wider range, such as your home is worth $385k – $400k. My point is value is really a range, not an exact number.

In addition to recently under contract and sold homes we also look at active competing for sale homes. The fewer options available on the market the higher you can push your price as a seller. (That is why prices are going up right now, inventory is low and buyers don’t have a lot of options!)

Once we have our CMA prepared we’ll deliver it to you in a written narrative format, answering all the commonly asked questions like how much is it your home worth, how much should you list it for, what is the “story” we want to sell to buyers, how long will it take to sell, etc.

In addition to the CMA we’ll provide you with a written breakdown of all the selling expenses so you can see the broker fees, the title work costs, the seller concessions, the property taxes due, etc. No hidden costs. (Quick tip: Some brokers charge you a commission and a separate “administration fee” which to me is a joke. Ask about these upfront. We have one clear commission and no added expenses.)

Once you receive the CMA and net proceeds we then come to a consensus on value and answer any questions you have about the valuation and the selling expenses. This is an important step. Getting the pricing of your home right is critical and the agent should do a great job for you in this area. To me helping you understand your home’s true value based on actual data is one of the most important tasks a broker does for you throughout the entire process.

If the agent you are planning to use does not provide you with a solid written analysis of the value compared to other sales or does not provide you a written estimate of the net proceeds I would rethink your agent decision. Pricing it right is critical and you don’t want to move past this step without solid real world information so you can have confidence in your asking price.

What is the wrong way to select my Seller’s Agent?

Here are the most common mistakes we see when people are picking an agent to help them sell their home:

The agent that values the home the highest. It is tempting to go with the listing agent that says you’ll get the highest price but is it realistic and based on recent sales data or is it just a promise they are making in order to trick you into listing with them in the hopes that they can lower the price later and earn a commission? Be careful here, this is a common trick!

The discount brokerage that says they’ll “save you money”. I see this one happen a lot. Discount brokerages are tempting on paper but because of their low fees they have to operate on a high volume business model. What does that mean for you? In my experience it means low touch service, no dedicated agent helping you, low local market knowledge, poorly executed marketing, damaged relationships with the brokerage community and often an overall bad experience. We have clients that have tried discount brokerages and then used us & we’re happy to have you chat with them about their experiences with both.

Your friend who just got his real estate license. How long someone has been in real estate is not necessarily an indication of how good they are at their job (there are plenty of long time agents who are terrible to prove it!) but I do think we naturally learn as we go in real estate. So do you want to have your agent learning the ropes on your transaction when a mistake could cost you $10k or more?

The first agent you meet. Don’t just meet a broker, talk to him for 5 minutes and decide he’s a nice guy you’d like to work with. Most agents can make a good first impression so you need to dig a little deeper to see if they are really right for your situation. Do they have good online reviews? How did they answer the 12 questions we listed above? This agent is going to have a large impact on how much you walk away with on your sale so take your time on this step.

Yourself. Why don’t we just get a “For Sale By Owner” sign and do this ourselves to save money? This plan sounds good on paper till you get going. Real estate is not rocket science but you don’t do it every day, why would you know how to do it? It would be like me coming to your job one day and saying “no problem, I can do this” without any training or experience. The mistakes you can make due to inexperience (not to mention the stress you will add to your move!) are not worth the potential savings you think you’ll reap.

How Should I select the right Seller’s Agent?

You’ve decided the time is right to sell your home. Great, that’s an exciting first step…but now what? It can be a little intimidating and nerve-wracking to try to figure out where to start the process. So many things to think about, so many questions.

One of the first questions you should be asking yourself is “Who is the right real estate agent to help me with my sale”? I say this should be one of the first questions because your real estate agent should act as your guide throughout the process. Why not have that agent involved from day one so you can get their guidance from the start?

Don’t worry, this isn’t going to turn into a sales pitch saying you should all use our services as a real estate broker. The truth is who you should use depends on quite a few factors and ultimately you want to get the right specialist for your particular needs.

So to help you pick the right agent we’ve put together the following list of questions we would ask if we were in your shoes as a home seller interviewing potential real estate brokers.

Top 12 Questions to Ask a Real Estate Broker before You Hire One:

  1. What experience do you have in [insert your ideal neighborhood]?
  2. How many transactions did you do in the neighborhood last year?
  3. Can you provide 3 recent seller clients from the neighborhood that we could speak to about their experience? (Quick tip: If they can’t give you 3 recent clients from your target neighborhood you may not have the area expert you need!)
  4. What makes working with you different from other agents?
  5. Can you provide us with a written Comparative Market Analysis showing the value of our home and what we could expect to walk away with after all selling expenses?
  6. Can you explain the Seller Agency Agreement? We do not want to do anything that establishes you as our agent until we are ready to decide on a broker, so when does that relationship start? Can you also explain how it could end if we changed our mind? (Quick Tip: Many agents won’t know the answer to this, be careful what agreements you sign with them!)
  7. We understand we pay you at closing, is there any scenario where we don’t close but we owe you a fee of any kind?
  8. Will we be working with you directly or with your team?
  9. Can you explain how it would work if one of your buyers ended up buying our listing? Who would you represent in that situation?
  10. How do you think we should decide between buyers if we get multiple offers? What do you think is most important?
  11. Do you provide any staging or professional photography?
  12. How much do you charge in commissions?

If after you ask these 12 questions and follow up on the references you feel good about the agent then proceed with hiring him or her as your agent. If you aren’t comfortable, even if it’s just a gut feeling, I’d say keep looking and find an agent you like to represent you. You want an agent who you feel comfortable with AND who is the specialist in the neighborhood.

Finding the right agent is like finding the right doctor, you want the specialist who deals with your ill ness every day and knows it inside and out. You don’t want the generalist who learned about it once in school and has a vague understanding of it. The agent’s deep knowledge of the area based on previous experience is a large part of what they bring to the table.

What are the key factors to consider when preparing to sell my home?

You’ve selected an agent and the agent has helped you figure out value. At this point it’s time to get ready to list it! But where do you start? What needs to be done to prepare your home so you maximize your return? Don’t worry, we can help.

First off, there is no magic to selling a home for the most money possible. Homes sell at top price if the seller gets the following 6 things right. So these are the things we need to work on as we prepare you home for listing.

“PLACE”

P – Pricing. It all starts with pricing. Get this wrong and really no matter what else you do you’ll be swimming upstream. Earlier in the process we’ve provided you the value range based on the CMA so if you stay in our suggested price range we can check that off the list!

L – Location & Layout.   Next, we have to consider location and layout. Both things we can’t often change. As we market your home are there location and layout benefits that we need to market? Are there layout challenges that we need to address in our staging? For example, maybe you have a small condo that feels tight and you have huge furniture that makes it feel even smaller! We’ll help you think these things through because often times sellers don’t notice these issues in their own home. If you have a challenge that can’t be changed (you face a busy street) lets just take it into account with our pricing and expectations.

A – Appeal. After that we get to appeal, which means the overall appeal of the property as the buyers walk through it. We want your home to be like a model home, appealing to buyers’ 5 senses. It must be well lit, smell good, organized, decluttered and appropriately furnished. The art and décor should fit the size & style of your home and should also appeal to your most likely buyer. (Who is your buyer? Young working professionals, big family, retired empty nesters…we’ll help you figure it out) Sound stressful or expensive? We’ll have our stager/designer through at our expense and help you get a plan in place for every room that works with your budget. We’re only going to recommend staging & improvements that we think will get you a financial return on your investment.

C – Condition. When we say condition we mean the systems and structure of the home, often times stuff that is mostly behind the walls. Stuff like furnace, AC, sewer line, hot water heater, etc. We’ll help you assess these items and when it makes sense we’ll suggest cleaning or replacement. We have contractors that we know, like and trust that we can recommend. In most cases we don’t replace these big items but we’ll help you understand which ones are likely to come up during the inspection process.

E – Exposure. If we get the first 5 items right all we’re left with is getting your home great exposure on the market. We’ll do this by having our professional photographer shoot the property photos to insure we get great light and amazing angles. We’ll then make sure those photos, along with your custom website, are listed on all the major real estate search sites. Qualified buyers are almost all searching online so we’ll make your home stand out to insure they come see it. We’ll also help you list the home early with a “coming soon” strategy to maximize your number of showings and offers.

What should we expect at closing?

Pop the champagne, you made it! You’re ready to close on the sale of your home.

So what should you expect around closing time?

First, you’ll want to review your closing figures before closing. Typically these can be provided to you by the title company 3-7 days in advance of closing. By reviewing the figures in detail ahead of time you can take your time and understand all the expenses. If you are the type of person who likes to review every document they sign in detail you can request the actual closing documents in advance as well. That’s much better than trying to review things at the closing table where you may feel a little rushed.

Once you’ve reviewed the figures you’re pretty much set for the closing. Just bring two forms of ID and be prepared to be at the closing for an hour and a half. As the seller you’re part of signing the documents will only take about 15 minutes but the buyer’s part takes much longer and you can’t get your funds until they are done.

Not available the day of closing? You can actually sign your documents early if needed. It’s not a problem, just let your agent know and they can coordinate this for you with the title company. Just know you won’t get your funds until the buyer has signed all their documents.

Around the day before closing the buyer will likely want to do a final walk through. This is one last chance for them to walk the home and make sure all inspection items were handled, make sure nothing significant has changed at the property and make sure the inclusions are all there like fridge, washer, dryer, curtains, etc. Don’t feel like you need the property to be in perfect condition, but you do want it to be fairly clean for the buyers when you give them possession. A good rule of thumb is give the buyers the home the way you’d want to receive it if you were in their shoes. A minimum requirement is get all your personal items out, sweep, vacuum carpets and wipe down all surfaces. It’s common courtesy to patch and paint all holes from items you’ve taken off the walls.

Once the buyer has signed the documents and their funds have been provided you’ll want to give them the door keys, mailbox keys and garage openers. So have these ready at closing.

The closing day is a good time for you as the seller to also cancel all your existing utilities on the property such as gas/electric, HOA, cable, internet, etc.

Lastly, celebrate the sale cause you’ve made it through the entire process!

What can I expect once I’m under contract?

Once you sign the contract you’ll need to perform according to the obligations you agreed to in the document. The good news is the seller doesn’t have to do much in this phase, most of the work during the under contract period is done by the buyer.

The contact you sign obligates you and the buyer to do things according to a schedule of deadlines. Your agent can help you keep all the dates, deadlines and obligations organized so you don’t feel overwhelmed. (Quick tip: Since the contract is so important why not ask your agent to give you a copy of one before you even get offers? That way you can read it before things heat up and understand what you’re signing!)

Think of the under contract period as the buyer’s chance to do all their homework on the property that they couldn’t do upfront when they made the offer. After all, they had to bid on it right after they saw it. This is their chance to step back, analyze the property, the title work, get an appraisal, and review the homeowners association documents (if there is one) to make sure everything is on the up and up. Even though the buyer has to do most the work we’ll stay on top of it to make sure they’re doing what needs to be done.

Colorado is a very buyer-friendly state and the buyer’s earnest money (the money they put down up front with their offer to show they were serious) isn’t actually at risk until the dates and deadlines pass. For example, buyers can back out if they don’t like the condition of the property, in their sole discretion, as long as they do so before the Inspection Objection Deadline. So my point is as a seller you should know the deal is not over till your walking away from the title company with your check in hand.

If the buyer appropriately backs out of the contact using one of their “outs” I’ve discussed above (appraisal, inspections, loan approval, etc) the buyer receives their earnest money back and then you as the seller can then re-list the property and seek another buyer. If the buyer inappropriately backs out for no legitimate reason you as the seller get to keep the buyer’s earnest money and then re-list the home to find another buyer.

Another important item I want to note at this point is buyer’s lenders often have delays that can affect the closing date. It’s not uncommon for there to be a few day delay so try to keep your moving plans, etc flexible. If you know upfront this could

How do inspections work?

Inspections are critical. In this tight seller’s market some buyers are waiving their inspections but as I mentioned earlier I think that is a bad move. You should expect your buyer to inspect the home.

In most competitive situations right now many clients are largely giving up their right to object to minor items, but they are still making sure they have an inspection clause in the contract which allows them to object to major health, safety or structural issues.

Almost all buyers will get a general property inspection, most will get a sewer scope and some will get a radon test. The general inspection will cover all the major systems of the home such as HVAC (heating and cooling), roof, structural, plumbing, electrical, etc. If the general inspector finds something that they are concerned about their role is to raise the issue and if it’s beyond their level of expertise they’ll suggest a specialist take a look and offer additional guidance.

The sewer scope is critical because the buyer never knows when there is a sewer line issue, even new homes can have them, and they can cost a ton to repair depending on location and the issue. How much? I’ve seen repairs range from $3,000 – $12,500!

So let’s assume the buyer has the home inspected and they find a few issues. Now what? At this point the process is for the buyer to submit an “Inspection Objection” to the seller noting the issues and requesting either they repair the issues or give the buyer cash in the form of a closing cost concession at closing so the buyer can address the items later. I personally prefer the cash concession route, that way the buyer can control their own repairs & misunderstandings can be avoided between the buyer and seller. I think providing the cash concession lowers your liability as a seller. Why make repairs that could later be scrutinized by the buyer as insufficient?

So as a seller what can I expect to have to repair or pay for? The answer to this is it depends. (I know, that’s an annoying answer) But it does, it depends on the state of the market and the degree to which you as the seller can find another potential buyer. In this market, where there are more buyers than sellers, the seller has most of the leverage and it isn’t likely you’ll have to do a lot of repairs or a large cash concession. That said, I do see sellers still agreeing to repair items if they are structural, health or safety related, which seems reasonable to me. For example, if the radon test comes back above the EPA suggested level then I still see sellers usually covering the cost of that mitigation since it’s a safety hazard.

Inspections and the subsequent negotiation between buyer and seller can be tense. If a deal is going to fall apart it usually happens in this phase. (Quick tip: Maintain an objective position rather than falling into an emotional one. It’s easy for both parties to feel a little frustrated at this point but if you keep your eye on the bigger picture and try to put yourself in the other parties shoes you’ll likely make it through this phase)

Remember, negotiating power is about having options and in this market the sellers have the options. You can negotiate from a position of strength but do so reasonably, your first buyer is likely your best one and you don’t want to start over in the process if you can avoid it.

If I get multiple offers how do I decide which one to select?

Congrats, you have offers on your property! Now how should you decide on which one is best and what do you need to know about the contract?

Your agent can help you summarize all the offers and highlight key differences that matter the most. We put all the key points into one side by side spreadsheet so you can easily see the differences. So what are we looking for in the offers?

5 Key Items to Consider When Picking an Offer

  1. First, how much is each buyer willing to pay? This is obvious and important but it’s not everything.
  2. Home Sale Contingency. Does the buyer have another home to sell, which is called a “home sale contingency”? Basically the contingency gives them the right to back out of their contract with you and get all their earnest money back if their home doesn’t sell. This makes their offer riskier because the chance of it falling through goes up significantly. If that happens you could waste 4-6 weeks of what could have been valuable market time being under contract with a buyer who ultimately could fall through AND get all their earnest money back. That’s a big risk. If you have non-contingent offers the contingent offers usually get put at the bottom of the pile in this market.
  3. How much down payment does the buyer have in the deal? How strong is their lender letter? Your agent should analyze the buyer’s financial strength and assess which one is most likely to be able to close. Buyers will more cash down can absorb appraisal shortages which is key in this market where in my experience about 1 in 5 deals has a low appraisal.
  4. Can the buyer give you the timing you want for closing and possession? This matters and is a factor. In this hot seller’s market sellers are typically calling the shots on timing. If you want to stay in your property a while you can probably sell it and then do a “lease back” where you lease the property from the buyer for 15-45 days. (45 days is about the max usually)
  5. Additional Provisions. Some buyers know they need to do everything possible to win so they massage their offers a bit in the Additional Provisions section. You may see clauses that limit their ability to object to inspection items or that offer to cover appraisal shortages if that occurs. These clauses, which almost always benefit you, often times make the difference in terms of which offer wins so pay close attention here.

If you look at those 5 items in detail typically the best offer will make itself clear. In my experience I’ve noticed an interesting trend. The best offer is usually not the highest priced one, it’s typically 2nd or 3rd in price but best overall because of the other 4 factors listed above. Often times the highest priced offer is offering the most because they know they aren’t the best offer in one of the other 4 areas and they’re trying to compensate for it in price. For example, they are willing to pay the most because they are an FHA buyer with 3.5% down payment and no ability to cover an appraisal that comes in low. Sounds great upfront as a buyer (we can all get $ in our eyes!) but will the deal really close at that inflated price? Don’t fall in love with price, pick the offer that has the best overall package to offer & is likely to close.

Lastly, don’t forget to thank the other buyers that went through the trouble of submitting an offer. Losing out on a home hurts emotionally and you want to make sure you acknowledge their effort. Let them know that if something happens to your contract you’ll notify them right away. You never know, in this market it’s not uncommon for deals to fall through which leaves you looking for another buyer. Don’t burn any bridges.

How does the process work when we make the home live on the market?

The heavy lifting is done! You’ve found an agent, figured out your value and you’ve done all the hard work to prepare your home to list. It’s finally time to list it and see what the market thinks. So how does this step in the process work?

First, let’s chat about when to list your home.   Typically we like to list the home for sale around Wednesday of Thursday but with no showings allowed until Saturday. Why do we suggest this “coming soon” strategy? There are a few reasons. First, it gets the home on the broker community’s radar. They, along with their buyers who have automated searches, start to see it. The second reason is it builds up potential showings for a few days so you get a lot of showings the first day it becomes available. This is good because if you just started showings the first day you put it up on the internet you may get an offer right away. Good problem to have right, but still a problem. If you get an offer immediately you feel like the home hasn’t been exposed to the market and you may be leaving some money on the table. So by listing it a few days early and not allowing showings until Saturday you’re building up demand. Then when buyers start to see it you will likely get quick offers. I would suggest you then let all buyers know that you’ll take offers through the weekend and you’ll select one on Monday. Is this frustrating to buyers? Sometimes…they would rather submit an offer to you on Saturday and have you accept it that day. But is that the best deal for the seller? Probably not. I think it’s best to allow Saturday and Sunday for showings so you know you gave it at least one good weekend on the market. That will end up getting you the best price in my opinion because it will help you draw out buyer competition and hopefully multiple offers. When buyers are worried about losing out to other buyers that’s when your price goes up.

Let’s chat next about showings. How do these work? We, along with most agents, use a third party company called Centralized Showing Service (“CSS”) to set all our showings for us. So buyer’s agents will call CSS and request showings. CSS will have our showing preferences that we’ve established with you and they’ll set the showings according to these preferences. For example, we can set it up so showings only happen during certain hours, they can be as long as you want, and you can set it up so you have to approve each showing if you prefer. We can play with a lot of preferences but my main suggestion is to be out of the home the first weekend. This way we can set it up so agents can go show it easily any time and you won’t be inconvenienced all weekend. You need to be out for showings and it’s not uncommon for there to be 5-25 showings the first weekend so save yourself a headache and plan a little trip that weekend.

CSS will notify you, as well as us, when each showing is set up so we’ll all be able to see how many showings are happening. They will also email each agent for feedback after the showing. We’ll all receive copies of this feedback and look for trends to see how we can improve the buyers experience. If the agents don’t provide feedback we’ll then call them as well to nudge them for their thoughts on the property.

What happens if the property appraises lower than the contract price?

You’ve decided to sell your home but how do you know how much it’s worth?

We’re happy to value your home and provide you with an estimate of the net proceeds you’ll walk away with at closing. No reason to start preparing your home for sale until you know about how much it’s worth and how much you can expect to walk away with from the sale.

Every agent probably values a home differently but we take a two-step approach. First, we come to your home and tour it with you, learning about the location, the finishes, the condition, the layout, etc. This is a 30 – 45 minute visit at your home. Next, we take that information and then we go work on the Comparative Market Analysis (“CMA”), which is the comparison of your homes to other recent under contract and sold homes in your area. This is similar to an appraisal but because we’re not appraisers we can’t actually call it an appraisal.

The CMA will compare your home to other sales and it will make adjustments in value for differences between the homes. For example, if your home has a 1 car garage and all the other sales had 2 car garages we’d have to adjust for that fact. If your home was 150 square feet bigger than the other sale we’d have to account for that fact. It’s not a perfect science (it’s subjective!) but we want to do our best to make sure we’re basing your valuation on recent comparable sales and accounting for the differences to the extent possible.

When a home has very similar comparable sales we can provide a very tight value range, for example we may say you home is worth $395k – $400k. When a home is very unique and we can’t find great comparable sales to go off we may have to provide a wider range, such as your home is worth $385k – $400k. My point is value is really a range, not an exact number.

In addition to recently under contract and sold homes we also look at active competing for sale homes. The fewer options available on the market the higher you can push your price as a seller. (That is why prices are going up right now, inventory is low and buyers don’t have a lot of options!)

Once we have our CMA prepared we’ll deliver it to you in a written narrative format, answering all the commonly asked questions like how much is it your home worth, how much should you list it for, what is the “story” we want to sell to buyers, how long will it take to sell, etc.

In addition to the CMA we’ll provide you with a written breakdown of all the selling expenses so you can see the broker fees, the title work costs, the seller concessions, the property taxes due, etc. No hidden costs. (Quick tip: Some brokers charge you a commission and a separate “administration fee” which to me is a joke. Ask about these upfront. We have one clear commission and no added expenses.)

Once you receive the CMA and net proceeds we then come to a consensus on value and answer any questions you have about the valuation and the selling expenses. This is an important step. Getting the pricing of your home right is critical and the agent should do a great job for you in this area. To me helping you understand your home’s true value based on actual data is one of the most important tasks a broker does for you throughout the entire process.

If the agent you are planning to use does not provide you with a solid written analysis of the value compared to other sales or does not provide you a written estimate of the net proceeds I would rethink your agent decision. Pricing it right is critical and you don’t want to move past this step without solid real world information so you can have confidence in your asking price.

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