Home Seller Frequently Asked Questions
SELLER FAQS
Over the years, I’ve met with hundreds of people planning to sell their homes. And whether they are “first time sellers” or have gone through the process before, it seems that the questions are always mostly the same. And that holds true whether they are selling their primary residence, an investment property, a second home or even a property they inherited.
In no particular order, here’s the answers to some of the most common questions I get and some useful seller hacks.
What repairs do I have to make?
Can I sell “as-is”?
Should I stage my home?
How’s the market?
How much is my home worth?
What are you going to do to sell my home?
What is your commission?
Let’s get started.
WHAT REPAIRS DO I HAVE TO MAKE?
You may not have to make any repairs but you do have to comply with CA laws and local requirements.
That means that your water heater has to be properly strapped, you need CO2 and smoke detectors and low flow toilets and faucets.
Where there are local retrofit requirements you will have to comply with those as well. On rare occasions the bank’s appraiser may call out property deficiencies that will have to be repaired such as if there is no heat. But appraisers usually don’t check HVAC.
One thing to consider is that there’s a world of difference between repairs you have to make and repairs you might want to make in order to get a higher selling price and have a smoother transaction. An example would be an end of life roof. It may not be leaking today but chances are a buyer may ask for a credit to replace the roof. That brings is to the topic of…..
CAN I SELL “AS-IS”?
Actually the language in the standard purchase contract we use - the CA RPA, states that the property is being sold in its present as-is condition. The same paperwork also states, seemingly in contradiction, that the buyer may request certain repairs to be made. And then it goes on to say that the seller doesn’t have to make any repairs. Confusing, right?
Sellers will often include language in counter offer terms that the property is being sold “as-is” with no repairs or credits. Unfortunately even if buyers sign and agree to those terms, they often come back and ask for repairs anyway. So that puts the seller in the position of say no and risk the buyer canceling or negotiate - which was trying to be avoided. Personally, I believe that both parties should honor the agreed to terms whatever they may be because the parties relied on those assertions. And as noted above, you still have to comply with a number of laws. That means that even if your sale is “as-is”, you still need to install those smoke and CO2 detectors and strap that water heater, etc.
So can you sell “as-is”. Yes, in certain situations.
SELLER HACK
Some agents recommend getting “pre-listing” home inspections. There’s pros and cons to that. First of all, any inspections or reports you have in your possessions have to be disclosed to the buyer. And whatever you find out, you have to disclose. Sometimes not knowing anything is a better option.
On the other side of the coin, proactively doing repairs that a buyer may ask for anyway is often the best path to then selling “as-is’.
SHOULD I STAGE MY HOME?
If by “staging”, we are referring to presenting your home as if it is going on a first date with the new owner(s), then quite simply, the answer is yes. You definitely 100% want your home to look its best which for most people might not be exactly how they live in the home day to day.
But there are different levels of staging that can be done and that ranges from from professional staging furniture in every room - most often done when homes are vacant, to strategically adding some pieces to your existing furniture.
But before you get to staging, remember that often the biggest bang for the buck is relatively inexpensive - decluttering and deep cleaning.
After you declutter small items, removing or re-arranging some furniture can go a long way toward making the house look a lot better. After that, some freshening up of lighting and other inexpensive touches can make a big difference. I even have had some clients buy furniture and other accessories just for the pictures and first showings and then do returns after we are in escrow.
And yes, you might have to paint if you have colors that are very personal. In rare instances if there is old (orange shag) carpet, replacement is the best move.
For some rooms and vacant homes we can also do “augmented visualization” to make your home look like a model home. In other words, virtual staging.
SELLER HACK
If you have a flair for design, you might want to consider buying some pieces and accessories just for the pictures and first Open Houses and then returning them after you are in escrow. I didn’t think that one up. I noticed that’s what some of my sellers were doing.
HOW’S THE MARKET?
A far better question to ask might be “how’s the market for homes like mine?”.
In general, for over 10 years with a few speed bumps, we have been in what would be considered a Seller’s Market in most of coastal California. And, it doesn’t look like any of that will change anytime soon. There has consistently been more
That’s because so many people are locked into 4% and lower mortgages and just saying no to selling. Most people selling today are the “have-to” sellers, not the “want-to” sellers.
Have-to sales are caused by a change of life circumstances such as divorce, a death, job loss or relocation. It may also include family formation, a move to multi generational living or a growing family. It also assumes that renting the departing residence or refinancing is not an option.
Want to sellers simply are looking to make an elective change in their living circumstances. An example would be people downsizing because as empty nesters they want less space and a different lifestyle. It also includes those living in condo or high rises who want SFRs and vice versa. We saw a lot of want to sellers during the Great Migration but that seems to be over at this point.
SELLER HACK
One of the best ways to generally track how the market is doing is with the interactive Altos market reports you can access here.
HOW MUCH IS MY HOME WORTH?
Everyone asks this question in one form or another even though it may be phrased as “how much should I list for”. When it comes to home values, there’s a lot of different numbers.
The first is the listing price. There are three basic strategies to price your home:
Event Pricing: list lower than the last sale to get multiple offers and into escrow quickly over the list price.
Market Pricing: list at the same price as the last comparable sale and closer to where your home may sell.
Aspirational Pricing: the price the perfect buyer will pay for a unique home with no true comps. Often higher than the market may support.
Two data points to consider:
You can never list too low. Well within reason anyway. Usually 3-5% below market should do it and never, never more than 10% below market.
Leaving “room to negotiate” most often leads to price reductions and selling for a lower price than you otherwise could have attained.
After the list price we get to the market price - what a buyer in an arm’s length transaction will pay. That could be the same. more or less than a seller expects. The market price is typically what sellers mean when they ask how much their home is worth and the only way to truly determine that is by listing the property.
Lastly we have the appraisal value. That’s the amount the bank uses to determine the value of the collateral. Often, the appraisal value is the same as the contract price but sometimes it is not. A few quick points on appraisals.
An appraisal is considered an opinion of value. Different appraisers may have different opinions - even on the same day.
Appraisals for purchases and refinances may come out different with refis being lower.
SELLER HACK
Here’s a report that will give you 3 different values for your home.
WHAT ARE YOU GOING TO DO TO SELL MY HOME?
Whether sellers pose this as the agent’s marketing plan or use other terms, it is probably one of the best questions to ask.
Here’s what I do even though though listing inventory is low.
Twilight Photography
Drone Shots
3D Virtual Tour
Cinematic Video
Property Website
Floor Plans of Your Home
4 Sided Property Brochure
5,000 Neighborhood Postcards
Targeted Social Media Advertising
Syndication to Thousands of Websites
And then there’s even more I do which I’m not going to share here because I don’t need to make it easy for my competitors to copy me.
While most of the bullet points above are aimed at reaching buyers where they are - on their phone or computer, some of the old school tools still work such as having 4 sided brochure handouts for the Open House. (I personally host all opens for my listings.)
The truth of the matter is that agents have about 5 seconds or less to capture buyer interest as they are scrolling through their phones. And what creates stickiness and traffic are gorgeous pictures, videos, 3D walkthroughs and floor plans.
SELLER HACK
If you use social media (doesn’t everyone), make sure that you also promote your listing. It’s free and you never know who you know may be interested in your house or know someone who is. While you may think that anyone in the market will see the listing, there are people who are not actively searching but will become buyers if the right property comes along.
WHAT IS YOUR COMMISSION?
Here’s a few things sellers should know about real estate commissions.
Real Estate commissions are negotiable and not set by law.
In California, any brokerage can sell the listings of any other brokerage.
Most of the large brokerages force their agents to charge 5 or 6%.
As an independent broker I am free to set my own rates and typically they are lower than you would expect from someone with my level of experience. Contact me for details.
Part Two of the Seller FAQ series is in “coming soon” status. Check back for updates.
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