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Selling Real Estate
Selling Real Estate
If you have decided to sell your piece of real estate, whether it’s your home, your summer cottage, or that tract of land in the country, this decision can sometimes be difficult and requires careful thought and analysis. The process of selling real estate can be a long and arduous process, although it can be made significantly less stressful with some vigilant organization.
Real Estate Agent vs. For Sale By Owner (FSBO)
The majority of people will enlist the services of a listing real estate agent to help facilitate the sale of their property. Real estate agents are in professionals who do this for a living hence they should be very knowledgeable and have extensive experience in selling real estate. The real estate agent will advice you what they feel is an adequate asking price for your property, list it on multiple listing services (MLS), advertise in the appropriate media outlets, find prospective buyers, show the property, and handle the bulk of the paperwork involved in the transaction. A real estate agent should significantly reduce the amount of stress on you during the sale of your home.
In order to get the right real estate agent, you should be diligent in your search. There are many real estate agents available, and just like any profession there will be some that are exceptional at their craft, and others that are not as exceptional. Once you have selected some potential agents you should set up an appointment with them so they can answer your questions and concerns. Some questions you should ask in order to help you in the decision-making process include: How long have you been in business? How long have you sold houses in this area? How many houses have you sold in the past year? What is your commission? How would you market my house? How are meeting with potential buyers organized? Who will coordinate? Who are your references?
With the advancement of computer technology and the internet, more and more people are selling their home independently – you’ve probably seen the acronym FSBO in your research of real estate. It Banner Stands for “For Sale By Owner”. Many individuals have taken this route since FSBO cuts out the middleman (the real estate agent), meaning that it eliminates any commission charges that would go towards the agent. In most cases, this will mean saving thousands of your hard-earned dollars. But be warned, independent sellers usually have a good understanding of the real estate market and real estate procedures. This of course requires some considerable investment in time to learning about the whole FSBO process, listing and advertising, showing the property, negotiating and closing the deal. This can be an extremely laborious and time-consuming endeavor, which further compounds itself particularly if you have a full-time job you must attend to. More discussion in regards to this can be found in our For Sale By Owner -FSBO section.
Setting the Price
Setting the sale price for your property is one of the most important and difficult decisions you make in the selling process. Selecting a high price may scare of prospective buyers. Conversely, setting a price too low may leave you short-changed since you offered a much lower price for what the actual value of the property is. Therefore, setting a fair price is vital for both yourself and the buyer.
The first thing that most people do is to compare their property to similar properties in the area by looking at real estate classifieds, multiple listing services (MLS), and the multitude of real estate websites on the internet. By doing this, you will get some sense of your property’s market value. If you’re working with a real estate agent, they will definitely be able to provide a ballpark range on your property’s value. Utilizing Comparable Market Analysis, the real estate agent will show the prices of recently sold houses and ones on the market that are similar to yours, giving you a good idea of the value of your home under the current market conditions.
Another avenue that some sellers choose is to hire the services of a certified, licensed real estate appraiser. Appraisers will examine the entire property, its condition, additional features, and also apply their knowledge on the current real estate market’s trend, to build up an accurate estimation of your property’s true value. Appraisers are also often hired by prospective buyers to assess the property to ensure that the buyer isn’t paying too much for it. A common myth about appraisers is that they apply a specific formula to work out exactly how much each property is worth. This is false as different appraisers can come up with markedly different values. Appraisers weigh certain criteria including location, proximity to desirable schools, and condition of the home and recent sales prices of comparable properties, to arrive at a value. More information on this topic matter can be found in the section Property Appraisal and Market Value.
Selling a Home – Two Mortgages?
First and foremost, if you’re selling a piece of real estate that also serves as your primary residence (i.e. your home), timing is of paramount importance. Selling a home can be tricky because you want to be sure that you have a place to live but at the same time, you don’t want to be saddled with two mortgages. As a rule of thumb, you should never buy a new home before you’re certain that you have found a buyer for your old home.
However, we do understand that this situation may not always be met. For instance, you’ve found the perfect home for you and your family, and there is a fierce competition for it but the seller has accepted your offer. At the same time, your old house has yet been sold. What do you do? Logic says that it probably isn’t the most financial feasible to buy the house, not yet, but on the flip side, it is the house of your dreams they don’t come around very often, much less at the price you have offered. In this case, many people will choose to go ahead with the purchase. This inevitably leads to you procuring a new mortgage to go along with your old mortgage.
Lending companies and financial institutions are all too aware of this scenario, with most people straining to make both mortgage payments. If you’re in this situation, you may be eligible for a bridge loan. A bridge loan is a loan to ‘bridge’ the gap between the termination of one mortgage and the beginning of another. Bridge loans are given using the same criteria as a mortgage so your realtor can help you out.
To avoid any problems you should always co-ordinate moving home with the people who are either moving into your old home or moving out of your new one, as the domino effect can easily mess up your schedule. Make sure that everyone commits to a specific window of time and have everything in writing, with financial penalties for anyone who fails to comply with the terms.
Other Aspects of Selling A Home
Now that you have decided to sell the home and have decided on a selling price, you can now enter the competitive world of selling real estate. This is where most of the hard work comes into play.
It would be quite lengthy to go through all the procedures in this one section, which is why we have organized different topics pertaining to selling real estate. We already have listed two topics: For Sale By Owner – FSBO and Property Appraisal and Market Value. In addition, the following two topics are included to give you a more comprehensive overview of the processes involved in selling real estate: Listing and Advertising and Preparing Your Property For Sale.