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Tips For Selling Your Home

Tips For Selling Your Home

Are you thinking of selling your property and looking for tips for selling your home? You’ve come to the right place, my friend.

I’m going to take you through the home selling process step-by-step and provide as many tips for selling your home as I can. By the time we’re done, you’re going to have a checklist that will save you time, money, and stress.

My goal?

To provide you with nothing but value, so that you’ll give yourself the best chance to do the following:

  1. Spend the least amount to maximize your returns
  2. Sell for the highest price in the shortest amount of time
  3. Reduce stress during your home sale

Ready?

One of the biggest financial transactions of your life, the home selling process is important and has eight critical steps.

You’ll walk away with home selling tips for each of these and the eight steps to selling your home consist of the following:

home selling process

Tips For Selling Your Home #1: How to Find a Good Realtor to Sell my House

I know, I know…

You’d rather avoid this until the last minute, right? I don’t blame you. However, choosing the right agent before you start getting the home ready can save you time and money.

How?

An experienced and savvy agent can provide you with valuable tips for selling your home. Many home sellers will start getting their home ready before partnering with a Realtor®. Sometimes this works, but many times it causes more stress, time, and money. We see many homeowners tackling a list of items that they think need to be completed before they put their home up for sale.

If you partner with the right agent, they should provide you with a list of tips to sell your home fast that will give you the biggest bang for your buck. I’m going to give you a checklist of six things that can do this, no matter what type of home you have. More on this in a bit.

Here are three tips for finding a Realtor® when selling your home:
tips for finding a good agent to sell home

Once you have interviewed at least two or three agents and made a decision on which one to go forward with, there are three extremely important questions you should ask them:
tips on questions to ask your realtor when selling your house

While you will likely have several other questions in addition to the ones mentioned here, these three are absolutely critical to understand before you begin working with your Realtor® and are just the first of many tips to selling your house that will save you time, money, and stress.

It doesn’t matter if your Realtor®is a family friend, someone you found online, or someone from a local real estate office.

Knowing the answers to these three questions will not only help you get the most from the sale of your home but can also help you save thousands of dollars.

It can also help to establish a level of comfort with a person you will be working closely with over the next few months during the process of selling your home.

So, why are these three questions so important if you’re looking for tips to sell your home?

Let’s review each one in a little more detail.

 

How to Find a Good Realtor to Sell my House

QUESTION 1: How Much Do You Think You Can Sell My Home For?

This is an extremely important starting point that cannot be emphasized enough.

You might already have a rough idea on what your home might be worth. But do NOT base this off of Zillow’s Zestimate, or any other online home value estimate.

While sometimes they can be a useful place to begin, these online home value estimates don’t include several key factors that have a tremendous impact on your home’s value.
tips for an accurate home value

 

Online home valuations cannot and do not take these factors into their calculations.

In fact, despite being one of the most popular real estate websites, Zillow even admits that their home value estimates are not always accurate.

When interviewing a real estate agent, you want to make sure they know:

  • Your neighborhood
  • The local schools (whether they are good or bad), and most importantly
  • The comparable homes (also known as comps) that have sold near yours

 

Why does all of this matter?

This information can and should be used when negotiating with buyers and their agents to sell your house for the most money.

Most Realtors®will have a comparative market analysis (also known as a CMA) when interviewing with you.

What’s a CMA?

A CMA is a summary of homes that have recently sold in the area that are similar to yours.

There is a certain set of criteria that you want to make sure your listing agent is using when establishing a CMA for your property. These can vary depending on where you live. For this example, we’ll use a single-family-residence in the average suburban area. In Silicon Valley, these can include areas like Sunnyvale, Cupertino, Santa Clara, Los Gatos, Saratoga, Almaden, Willow Glen, Mountain View, Campbell, and other parts of San Jose. Properties that are being used as comps for a typical suburban neighborhood should be:

  • In close geographical proximity (within a half-mile radius is best and the closer the better – you can go farther if needed)
  • Most recently sold (within the past six months at most – more recent the better)
  • Close in the interior square footage
  • Same or close to the same number of bedrooms and bathrooms
  • Similar sized lot

These are the same requirements a real estate appraiser uses when appraising a property. The more similar characteristics that a property has to yours, the better.

After the agent has the selected comparable homes, they should make certain adjustments based on a few key factors:
home selling tips

Condition of the Home

The most important of all is usually the condition of the home. If your home is in a much better condition in comparison with one of the ones it’s being compared to, then your home should have a + adjustment and should be valued higher.

Location of the Home on Its Street

Another important adjustment can include the location of the home on its street. For example, if your home is located on your street where the average home is (i.e. not on a corner by a stop sign or intersection), and a home it is being compared with is on a busy street, your home may receive a 7%-10% positive adjustment in its potential selling price as a result.

So, if the home on the busy street that it is being compared to sold for $1,300,000, your home may be worth roughly $90,000 to $130,000 more.

 

Other Adjustments

Other tips for selling your home include adjustments used when evaluating the comparable homes’ different neighborhoods, different schools, and the property condition.

 

What’s Not Included in a CMA….But Should Be

There is one thing that is not typically included in a CMA or online home value estimate that can have a big impact on the potential sales price of your home.

This is the layout and floor plan.

It can vary drastically from house to house, and often comes down to personal taste. But if the layout and floor plan of your home are in line with what a certain buyer is looking for (usually an open layout), it can have a big impact on the desirability of your property.

But the same principle works both ways. If your home doesn’t have an ideal floor plan or layout in the eyes of your prospective buyer, they might be turned off, even if everything else is perfect.

 

Get An Accurate Listing Price When Selling Your Home

When speaking with and interviewing real estate agents and reviewing their proposed CMA, there is one thing you absolutely must be aware of:

There are some agents who will suggest a listing price that is higher than what is realistic. They do this so that you get emotional and excited about an inflated price and will decide to work with them to sell your home.

This would be considered bad tips for selling your home and should ring alarm bells.

When you sign a contract to work with an agent, it is usually an exclusive agreement between you and the real estate brokerage for a certain period of time. That period of time is up for discussion, but other brokerages will typically include six months for the duration of the agreement.

It may be very tempting to work with an agent who suggests or even “guarantees” they can sell your house for a higher amount than what you think your home is worth – but if it seems to good to be true, then it usually is. In this scenario, my suggestion would be to get a second opinion.

Red alert home selling tips advice: Make sure your agent backs up their suggested price with data (i.e. best comps with accurate adjustments).

Why is this important if you want the best tips for selling your house?

Because of the ever-important number of days on the market for a property.

 

How Can “Days On The Market” Affect Your Home Sale?

The longer your home stays on the market, the more you start to lose leverage as a seller. Depending on what type of real estate market it is, the average days on market can differ. In a seller’s market, the days on market are usually shorter. In a buyer’s market, they’re usually longer.

If your home is on the market longer than what is average, buyers will begin to wonder whether there is something wrong with your property that could explain why it hasn’t sold sooner.

Eventually, your agent will most likely tell you that the longer the house is on the market, the more it can hurt your sale. They may tell you that despite having done a substantial amount of marketing, the best thing that can be done is a price reduction.

But why wasn’t this considered when you first started working together, before you put your home on the market?

Obviously, nobody can predict the exact dollar amount your home will sell for, but a good Realtor® should be able to give you a detailed analysis on how they came up with their suggested price. Unfortunately, this isn’t always the case.

This type of scenario is common, but there are ways you can steer clear of it when you sell your home.

Understanding how the days on market can affect your bottom line would be one of a few towards the top of my list of valuable home selling tips.

So, How Do You Avoid An Unrealistic Listing Price When Selling Your Home?

home selling tips

The Difference With Condos

If your property is a condo, these comparison guidelines may be a bit different.

Comparing your property to others within the same complex is always best, even if you have to look beyond the last six months for the most recent sale.

 

Next, An Example

Imagine that you are about to sell a single-family residence and your real estate agent has just presented you with some comparable properties nearby.

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process of selling your house

With your hypothetical property and these three comparable properties in mind, here’s a rough idea of how your agent should be making adjustments.

Note: This is a similar approach to how we put a market analysis together for a prospective client. The Nestimator will take into account the best comps and your recent neighborhood market trends, and your SoldNest agent will adjust the analysis if needed. By doing it this way, our clients get the best of an accurate algorithm and a local expert.

Now, let’s break down what your home value would come out to based on the three comps. Again, this is just a rough example and the adjustments on price per sq ft would probably be a little different (this can be broken down into a whole different conversation).
real estate selling process

how to sell your home

 

If we wanted to, we could make an adjustment for the lot size. But depending on the area, the difference between a 6,000 and an 8,000 square foot lot doesn’t have as big of an impact as the other adjustments.
sell my house fast

Determining Your Home’s Value

 

Next, we take the sum of all three and divide by three to get the average.
sell my home

Taking the average of all three is a very basic approach and this is just an example of how your potential Realtor®should be looking at the comps and making adjustments. This can vary by market, neighborhood, and the type of home, but this gives you a good idea on the approach your listing agent should be using.

If you’re speaking to a listing agent who doesn’t understand this, doesn’t include adjustments, and is just discussing similar homes that sold close to yours, do not count on them to be able to negotiate top dollar when selling your home.

Once a Realtor®shows you these numbers, they should also have a suggestion on the list price for your property. But it’s important to keep one thing in mind; the list price and the sale price of your home are two very different things.

The list price can be used strategically to attract more potential homebuyers. Listing your home at a certain price does not mean that you need to sell it at that price.

Important Tips For Selling Your Home

A good agent with an understanding of the sales activity in your neighborhood will list your home at a price comparable to other homes that have recently been sold in your area.

They’ll do this with one goal in mind: to meet or exceed your expectations by selling your home for the maximum price in the least amount of time.

Our example provided a comparative market value for your home at $1,343,000. This may mean having a listing price of $1,299,000.

 

So, why is the listing price lower?

Because you will likely get more attention on your property than you would if you listed it at around $1,350,000.

The majority of buyers these days are doing their own research online. They have easy access to a lot of data, such as price per square foot in the neighborhood they’re looking in, as well as the average sold price. If you’re a bit lower than market value compared to other homes, you should get a bit more attention.

We always suggest listing a home a tad under market value or at market value to attract more eyeballs. This will depend on what type of market you’re in. For example, if you’re in a seller’s market where homes are selling quickly and buyers are offering a big percentage over the listing price, then you might want to think about listing under market value. This will help get multiple buyers interested and your agent should be able to maximize this and drive the price up. If you’re in a buyers market where homes are taking a little longer to sell without multiple offers, then you might want to think about listing on the high end of what your agent thinks it might sell for. In this scenario, your home may stay on the market longer but the chance of getting your asking price or better should be higher.

Key Takeaways From How to Find a Realtor to Sell my Home QUESTION #1:

  • You want a detailed analysis of your home with data to back up their suggested list price
  • If you think it’s an inflated price, get a second opinion
  • The suggested listing price should be a strategy to maximize the sales price

 

How to Find a Realtor to Sell my Home QUESTION #2: What is your marketing plan?

Through the MLS and automatic syndication to all of the real estate search websites such as Zillow, Trulia, Realtor.com, the majority of the marketing will be the same no matter which real estate agent you decide to sell your home with.

It’s the other “right” type of marketing that can make a difference.

And here’s something to consider. If you’re in a neighborhood where the same Realtor ® consistently sends out postcards saying something like “Just Listed”, then guess what? They are using the “wrong” type of marketing.

This does NOT help sell your home. Instead, this agent is using your home sale to market themselves rather than your property.

 

Home Selling Tips Red Alert

Make sure your agent is marketing your property, not themselves.

In the real estate industry, this is called “farming.” It’s a method that has been used for decades, but one that needs to change. In fact, it’s one of the reasons why SoldNest was founded.

Homeowners who sell their home are often completely unaware of this tactic. They may think that the Realtor®who has been selling homes in their area for the last twenty years is the neighborhood guru, and therefore is the best Realtor®to sell their house.

Maybe they are. But it’s not because of the postcards they send. You want to make sure they have a detailed marketing plan, in particular, one that will reach the most eyeballs of potential buyers.

 

Where are buyers looking?

The National Association of Realtors ® and Google recently teamed up to uncover trends and insights around digital media usage among home shoppers.

They found that over 90% of homebuyers search online. And maybe what’s even more astounding is that real estate related searches on Google have grown over 253% over the last four years.

The majority of buyers are searching online, and have social media accounts such as Facebook, Instagram, and SnapChat.

It’s critical that your agent has a unique game plan on how to advertise your home through digital marketing.

Remember, no matter which agent you decide to list with, you’re going to get a lot of exposure through the MLS, Zillow, as well as many other websites and applications.

But if you can tap into this buyer pool even further, your chances of selling your home for maximum value increase.

 

More Tips For Selling Your Home

Things That Do Not Have An Impact On Your Home Sales Price

Here are a few things that do not have an impact on how much your house will sell for:

  • Postcards

    These do more to market the Realtor®than your home.

  • A website without proper marketing.

    Many listing agents will say they’ll have a website made for your home. But the question you should ask is “what are you going to do with it?” Most only get it to impress the homeowner. A website or domain name of your home means absolutely nothing unless they plan on advertising your home online. Most will only put the domain name such as www.youraddress.com on the flyer that is distributed at your open house. But this doesn’t make sense since, by the time the buyer sees the website address, they’re already at your home.

  • The name of their brokerage.

    Some Realtors®will say something like “Our company is the 2nd largest in the nation.” That’s nice, but how does this sell your home for more? It doesn’t. If this was twenty or thirty years ago it would have, but not today. The buyer doesn’t care who the listing brokerage is. They care about things like the location, schools nearby, and the condition of the property.

    Many Realtors®will use this brokerage point to try and gain credibility, but it has no impact on your home’s selling price. The number of agents and offices a brokerage has does not help sell your home. Any agent or buyer who is interested in a property like yours will know about your home being on the market when your agent places your home on the MLS.

  • The “Homebuyers Lined Up Around The Block” Line

Be extremely cautious of real estate agents who tell you that they have a buyer looking in your area.

Unfortunately, this happens all too often and similar to the exaggerated listing price suggestion, this is used to get you excited.

Sometimes an agent really will have a buyer and that agent is trying to be pro-active for their client. However,f they really do have a buyer, then ask them to bring the buyer to see the house before signing a contract. Do NOT sign an agreement with an agent for this reason. Even then, if you want to maximize your homes selling price, then you want full exposure and the most amount of buyers knowing your home is for sale. By doing so, you will let the market dictate what your home is worth. Only showing your home to one buyer will usually minimize your potential sales price.

So, what should your agent include in their marketing plan for your property?
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Home Selling Tips When Marketing Your Home

The Importance of Digital Marketing

With most buyers searching online either on a website or on one of the search apps on their phone, it’s critical your listing agent has a targeted digital marketing plan to maximize exposure when selling your home.

The reason why is simple. The more eyeballs that see your home, the more potential homebuyers that will come to visit. The more buyers that see your house, the more demand it receives, and the better the chance you have of selling for more money.

If we know that over 90% of homebuyers search online, then why would you want your marketing dollars spent on neighborhood postcards or newspaper ads? The answer is that you don’t. The chances of your neighbor buying your home are extremely low, and the chances that a buyer finds your home for sale in the local newspaper is also extremely low. Again, many agents use this approach to use your house to market themselves as the “local expert” to other homeowners, not buyers.

 

Getting Exposure

You want your home to have the highest exposure possible. This includes the MLS, all syndicated real estate search websites, and digital marketing.

Unless there’s a very specific reason that you do not want your home placed on the MLS, tips for selling your house “red flags” should be going off if an agent tells you this.

There are some listing agents who might suggest this, so that they can have the least amount of advertising as possible to other agents and buyers, giving them an opportunity to try and find their own buyer and double their commission.

This is a major problem in our industry and one that we’re going to fix.

As previously mentioned, you’ll get the majority of the same marketing no matter which Realtor®you decide to list your home with. But the extra marketing that is done the right way can help sell your home for more money.

How to Find a Realtor to Sell my House QUESTION 3: How much do you charge?

When selling your home, your goal is to put the most amount of money in your pocket. Paying the lowest amount in real estate commissions helps you do that. It’s easy to figure out what you could potentially net from your sale by using our home sale calculator.

One of the biggest misconceptions is that a Realtors ® commission is non-negotiable.

But here’s a little secret: real estate commissions are negotiable and rank towards the top of valuable tips for selling your home.

Here’s how it works:

  • When you sell your home, you pay your listing broker and you pay the buyer’s broker.
  • Depending on your area, this can be 2.5 – 3% each, which makes a total of 5-6% in commissions.
  • Many listing agents will avoid talking about their commissions when initially speaking with you because they don’t want to have an uncomfortable conversation. Many of them can’t justify the real estate commission that they charge.
  • Some may tell you that they are suggesting a lower than average commission, but what they don’t mention is that they are also paying less to the buyer’s brokerage.

If you’d like to see a breakdown of your potential total closing costs and what they consist of, you can take a look at How Much Are Sellers Closing Costs in California?

 

Remember to always ask the agent how much they charge, what the total commission is, and how much is going to their brokerage and how much to the buyer’s brokerage.

When a home is listed for sale and when an agent uploads it into the MLS, there’s a section that shows how much the seller is paying in commission that only other real estate agents can see.

Anything less than the average can sometimes convince buyer agents to not show your property to their clients. Your goal should be to pay the lowest amount in real estate commissions while receiving top-notch service from an experienced real estate agent.

 

The Scoop on Uploading To The MLS, and Other Property Sites

Before real estate search websites and applications were around, a listing agent’s job of “marketing” a property was much harder than it is today.

Today, it only takes your agent about half an hour at the most to input all of your home’s information into the MLS. When they press submit, it’s automatically syndicated to hundreds of websites, including all of the big ones.

So if an agent’s job of marketing a property has become much easier, why are homeowners still paying the same amount in real estate commissions as they did before these resources were available?

It’s a great question that I couldn’t answer and is one of a few reasons why SoldNest was founded.

Compared to the average 5-6% total commissions charged by other Realtors ® and brokers, we only charge 3.5% if the buyer is represented by another brokerage (1% to SoldNest and 2.5% to the buyer’s brokerage) and only a total of 2% if the buyer is represented by SoldNest (1% to your SoldNest agent and 1% to the SoldNest buyers agent). All of our agents are full-service Realtors®, experts at negotiating, and are with you from start to finish.

 

SoldNest 1% Listing Fee

 

Tips For Selling Your House Step 2: Tips For Getting Your House Ready to Sell

Now that you’ve decided which listing agent you’re going to partner with, it’s time to get your home ready to sell.

 

The First Impression

 

“You never get a second chance to make a first impression,” the old saying goes, and it’s especially true when selling your home.

Whether it’s at an open house or a private showing, it’s imperative to make a great first impression to all potential homebuyers. When a buyer visits your home, they generally get a good idea of whether or not they like it within the first twenty seconds or so.

There are numerous things to consider in order to get your home to look its best. Not all of these are mandatory and you may not be in a position to do any of them, but the more appealing your home looks to a homebuyer, the better the chance of selling your house for the highest amount in the shortest amount of time.
get house ready to sell
getting house ready to sell
get ready to sell your house

With that being said, each property is different and not all of these will get you a return on what you spend. Your agent should be able to walk through your home and give you suggestions on tips for selling your home fast that will get you the biggest bang for your buck.

6 Tips For Getting Your Home Ready to Sell

Here’s a list of six things that can usually bring you a return on investment.

1. Declutter

Yes, this can be a pain. However, this plays a huge part in showing buyers how much your space can be maximized. 

Space and storage are biggies. Take down the family photos, clear the countertops, remove all of the small knick-knacks, and straighten up the closets. It’s ok to put everything in the garage when your home is on the market. This is quite common and is what most sellers do. 

2. Paint

Whether it’s the exterior, the interior, or both, a fresh coat of paint is something that can make your home really stand out. 

A home that hasn’t had a paint job in a long time can do the opposite. If you don’t have the time or resources for a paint job, then no biggie. If you have any leftover paint of the same color, then you may want to think about applying some touch-up. 

And stay with neutral and lighter colors. White, off-white, or a light brown color usually work best for the interior. The lighter the color, the bigger it will make the room look. Dark colors will do the opposite. 

3. Flooring 

The flooring that appeals to many buyers right now is hardwood. Laminate and vinyl also make a great impression. 

Do you have carpet in any of your rooms and hardwood underneath? You might want to think about removing the carpet and showing off the hardwood. 

4. Lighting

The more the better. If your home has natural light, then it’s a big plus and you’ll want to show it off.

Do you have any outdated light fixtures? If so, it’s time to kick them to the curb 🙂

Pendant lighting, Edison bulbs, and simple recessed lighting are what’s hot with today’s designers and buyers. Recessed lighting can make a huge difference, but can be a little costly.

Here are two things that aren’t costly that can also help with lighting…

Have the windows cleaned inside and out. Believe it or not, this makes a tremendous difference. And make sure all of your light bulbs are bright and not missing. Walk in every room and check each one. Sometimes just installing new light bulbs is all you need.

5. Update Your Hardware

You’d be surprised at how easily doorknobs, drawer pulls, locks and handles can start to look aged.

Take a good look at your existing hardware, and consider upgrading to newer models. And don’t forget the hinges. 

6. Colorful plants and flowers

Did you know that most buyers know if your home is for them within the first 15 secondsAnd when they pull up to your home the first impression is everything. 

Planting colorful plants and flowers can go a LONG way. Not only in the front yard – but also in the back. 

I’m not talking the exotic expensive stuff. I’m talking about the inexpensive flowers and plants you can purchase from Home Depot.

It gives off a positive vibe as potential buyers are walking up to and around the property.

Tips on How to Stage Your Home

Staging can be an added benefit by helping to get a homebuyer emotionally excited about your house.

A good professional home stager will know which furniture should be placed where, what color scheme will go best, and can also give advice on any work you might have done on the property. They know how to maximize your space.

Although staging can sometimes make a difference in appearance, it’s not always mandatory.

If you’re not using a home stager, you and your Realtor®can boost the overall appearance and feel of your home with strategic furniture placement, by considering things like:

  • Buyers want to visualize how things will fit
  • Will their couch go in that corner?
  • Does it make sense to mount the TV on that wall?

Placing furniture and other items in their ideal locations can help increase buyer enthusiasm about making an offer on your home. Maximizing your space is another item that ranks on the top of the list of tips for selling your home.

Improper staging or leaving your home vacant can leave buyers less interested in purchasing your home and would not be recommended if you’re looking for tips on how to stage your home.

When selling your home, one of the first things you’ll want to do is sit down with your listing agent and get their opinion on what should be done. They should be able to provide you with their opinion and then you can choose what you want to have completed.

 

Tips For Selling Your Home Step 3: Preparing and Planning

 

Now that you have your home ready, the next steps include inspections, disclosures, and some of the pre-marketing.

Your listing agent will guide you through this process.

It’s very important that you fill out all of the necessary disclosures and paperwork. When selling your home, and depending on what state, city, or even neighborhood you’re in, there are certain documents that you need to fill out.

A few of the important ones include certain disclosures, in which you’ll need to answer questions and disclose every single thing you know about the house and neighborhood. This not only helps you from preventing a potential lawsuit down the road from the buyer for not disclosing something about the house that you should have, but it can also help the buyer make a better-informed decision when thinking about writing an offer.

The more information the buyer has up front, the less likely the chance they back out of the sale. These disclosures are part of a package that your listing agent should have ready for any interested buyers and/or their agents.

During this same time, there are several things that your agent will be doing.
what to do to get your house ready to sell

Tips For Selling Your Home

Property Inspections

When you sell your home it’s not mandatory that you do property inspections. However, it’s almost always beneficial.

The most common inspections include a home, termite, roof, pool, and chimney. But depending on your state and the area you live in, there are other inspections that can be common.

We almost always advise our clients to get a home and termite inspection completed.

 

Why Do A Home Inspection?
home inspection tips for selling your home

Tips For Selling Your Home Step 4: Listing Your Home for Sale

 

After all of the prepping and planning, it’s time to put your house up for sale.

“Going on the market” usually refers to the home being on the MLS. Your Realtor®will input all of your homes information including the photos, video and property description into the MLS. The MLS is a database used by agents and brokers. This usually only takes about half an hour or so.

Shortly after, your home is automatically syndicated to hundreds of real estate search sites including Zillow, Trulia, Realtor.com, Homes.com and many more. At the same time, all of the other marketing that your real estate agent has planned should also be starting.

Allowing access to your home can definitely fall under home selling tips and is important. Your agent will usually leave a lockbox containing a house key that allows any potential buyers (only with their agent) and their agents to visit the property.

The easier it is for potential buyers to access your home, the greater your chance of reaching your target sales price.

Your agent should coordinate with you on how buyer agents should schedule a showing. You can have them call your agent directly and then they would call you (assuming you’re still living in the property) to confirm the time, or the buyers’ agent can call or text you to confirm the time.

If the latter is the route you choose, your listing agent should leave a comment in the private remarks section of the MLS (only other agents can see this) giving specific showing instructions.

Make sure your agent is specifically clear on how and when to show your property. If certain times of the day are better or if a certain amount of time is needed in advance, then it’s especially important that your agent puts a description under the private remarks so that other agents are aware.

 

Open House Tips For Selling Your Home

 

Open houses are great, but usually aren’t the deciding factor in selling your home.

It’s an opportunity for buyers to view the home so that they don’t need to schedule a private showing with their agent. Open houses will usually receive the highest amount of traffic on the first weekend after the listing is posted.
do open houses help sell my home?

Broker Tours

A broker tour is usually held the morning of a weekday. It’s meant to have other agents and brokers come and preview the home.

 

It doesn’t hurt to have a brokers tour, but just keep in mind that any interested agents and buyers will already know that your home is on the market. The brokers’ tour does give the opportunity to view your home, so having one doesn’t hurt.

Most of the time, the agents who attend are simply there because they like to look at homes in order to stay up to date with market activity.

 

Keeping Emotions At Bay

Selling a house can be a very stressful time – especially when your home is on the market and other people are coming through to look at it.

If you’ve owned the home for a long time, maybe there’s an emotional attachment.

Removing all or most of your emotions can drastically help during this time. It’s hard to do, but looking at this as a financial transaction can benefit you in helping to transition to your next phase in life.

 

Tips For Selling Your Home Step 5: Waiting for an Offer

 

Waiting, waiting, and more waiting. This is what happens after your home is put up for sale, and the anticipation can start to build quickly.

Your Realtor®should be giving you consistent updates on your home’s activity at least once a week, if not more.
the home selling process

Your real estate agent should open up a dialogue with buyers and other agents to not only gauge interest but to also get feedback.

 

Remember the Days on the Market

The number of days your home is for sale can have an effect on your potential selling price. The longer your home is on the market, the more leverage you start to lose and the more buyers will gain.

Buyers will start to wonder why your home hasn’t sold. Is there something wrong with the house? Is it overpriced? This is where a price reduction might be necessary. Usually, when this happens, the home was overpriced to start with, either suggested by the Realtor®or an adamant homeowner who thought their home was worth more than it is.

This is why it’s imperative that your listing agent understands the comps as well as current market activity and is well versed on the adjustments that were made before suggesting a list price.

 

What happens when a buyer is interested?

When a buyer is interested in your home, they will usually ask their agent to start gathering info about your property.

This will mainly consist of looking at recent comps that have sold, as well as asking for any disclosures and/or inspections you may have done. Depending on your state and area, the protocol may be a little different, but it’s always better to be over prepared with as much information upfront so that they can make a better-informed decision with their offer.

After looking at the comps and asking your agent for any disclosures and inspections you might have, the next step for the buyer would be to discuss with their agent about writing an offer. The discussion is about price, contingencies, and a few other terms that will be included in the offer.

Your agent should go over what you want to look for as a seller in an offer. Price is obviously number one, but there are a few other key things your agent should be looking out for when a buyer submits an offer. We’ll touch on these shortly and all of these are great home selling tips.

Is price the only thing that matters?

The goal is to get the highest price when selling your home, but the highest price is not always the best offer.

Your real estate agents job is to negotiate the best possible price with the best possible terms. Part of what makes a great listing agent is knowing how to negotiate with buyers and their agents. Some Realtors®are not well versed in this and don’t utilize certain negotiating tactics when trying to maximize your home’s sales price.

To ensure your listing agent will know how to negotiate top dollar for your home, ask them what their strategy is to do this. This should not be a broad answer but should be backed up with facts, such as statistical data on recent neighborhood sales and current market trends and why they think they can get the sales price that they told you.

When an offer comes in, your agent will let you know and will usually want to sit down and discuss to ensure you understand the details.

You have three options when a buyer submits an offer on your home.
home selling tips with the offer contract

Rejecting the offer means simply that – you reject it and don’t want to negotiate with them. This happens sometimes, but usually in cases when there’s a lowball offer, or for some reason there’s a waiting period where the seller might want to wait to look at all offers.

If you accept the offer, you are accepting the buyers offer price, contingency periods, and anything else that they have stated or outlined in their offer. When you do, the contract is ratified and the clock starts ticking.

The third option is to send them a counter offer. This usually isn’t done how you see on the real estate listing TV shows where they only talk and negotiate on the phone. This can happen, but it’s followed up with legal documents that are part of the offer contract.

 

Home Selling Tips That Include Possible Items In A Counter Offer

  • Price
  • Contingency timelines
  • Close of escrow
  • Rent back (so that you can stay in the house a bit longer after the sale)

In some cases, there will be one counter offer that you send to the buyer. If they agree to it and sign it, then you’re in contract.

In other cases, there can be numerous counter offers, where your listing agent and the buyer’s agent are negotiating until either both parties agree on all terms, or you don’t and the offer is void.

Once you and the buyer agree on terms and the contract is ratified and the sale turns to pending, it’s not time to celebrate just yet.

There are contingency periods that the buyer has to complete to further do their due diligence.

 

Tips For Selling Your Home Step 6: Reviewing the Homebuyer’s Contingencies

Usually within the first few days (at the most), the buyer will deposit a “good faith deposit”, which is commonly known as an escrow deposit.

Depending on the state and area you live in, this can be different amounts, but when selling a home in California, this is usually 3% of the purchase price.

This deposit will go towards the buyers down payment but is held in escrow in good faith of the buyers’ agreement to purchase your property.

The buyers’ escrow deposit is NOT at risk until they release all of their contingencies. If they release all of their contingencies and for some reason want to back out of the transaction, then their deposit can be at risk.

As soon as the contract is ratified, the clock starts ticking for the buyer’s contingency periods. Their lender will start on the loan process immediately, their appraisal will be ordered, they will start ordering any inspections, etc.

 

Common Contingencies in a Homebuyer’s Offer

 

Contingency periods

On an offer contract, the buyer has options if they want to include contingencies and how long these should be for.

The three most common contingencies are the buyer’s loan contingency, an appraisal contingency, and an inspection contingency.

Another contingency that you might see is an offer contingent on the sale of the buyer’s home.

 

The Three Most Common Contingencies In A Homebuyer’s Offer

Buyer Loan Contingency

This is contingent on the buyer getting their loan conditionally approved. Most homebuyers will get pre-approved before they start really looking at homes for sale.

A pre-approval means the lender did a credit check, checked the buyers’ bank statements for sufficient collateral and reserves, as well as gathered their most recent pay stubs, W-2’s, tax returns and so forth to make sure they qualify for the home loan.

When a contract is ratified, the underwriter at the buyers’ lender will also need to see other documents to give them the full conditional home loan approval. These include the purchase contract, title report, and a few other documents. A buyer will release their loan contingency when they and their loan officer are 100% confident that the financing will not be an issue.

Appraisal Contingency

When a homebuyer is purchasing a house for sale and is receiving financing from a lender, the lender will require an appraisal of the property.

Since the lender is putting in the majority of the money on the purchase, they want to make sure the collateral being used for the home loan (your house) is worth what the offer price is in the contract.

If the appraisal matches the purchase price or comes in higher, then everything is good and the buyer will release their appraisal contingency.

If the appraisal comes in less than the purchase price, then the buyer can back out of the transaction, try to renegotiate with you and your Realtor®, or if they really want the house, they will end up paying bit more out of pocket.

Banks will use the purchase price, or the appraised value for qualifying factors, whichever is less.

Inspection Contingencies

This is a time frame for the buyer to do any and all inspections.

These can include the same inspections you might have done or different inspections. Sometimes a homebuyer will want to have their inspections completed, even though you might have already provided inspections upfront. This is perfectly normal. Purchasing a house is a major financial transaction and it’s always better that everyone involved does as much homework as possible and not try to avoid any shortcuts.

Once the buyer is confident on the inspections, they will release their inspection contingencies.

The Next Steps

When the buyer releases any and/or all of their contingencies, they will do so on a legal document that is part of the contract and signed by all parties. The typical timeline can be anywhere from 0-21 days (give or take) for any of the contingencies.

Some buyers will waive their contingencies in their offer (this is much more common in a seller’s market where there is low inventory) and some might leave them as they are standard in the contract.

They can also be modified in the offer contract. For example, if an inspection contingency is 17 days standard in the contract, a homebuyer might take this down to 10 days to make their offer look a little stronger.

As a seller, this is a good thing, as it shows more commitment from the buyer.

As a seller, once you accept an offer, you’re waiting for the buyer to release their contingencies. When they do, their escrow deposit can be at risk should they want to back out of the transaction.

During this same time and as you get closer to the closing date, you can really start to get everything ready for your next adventure and start making immediate plans if you need to.

 

Tips For Selling Your Home Step 7: Waiting for the Lender

After the buyer removes their contingencies, it’s really a waiting game for their lender to send their loan documents to the escrow company to be signed.

There are conditions (paperwork) that the buyer needs to fulfill before the underwriter will give the ok to draw the final loan documents, but usually this has nothing to do with the seller.

About a few days to a week before your estimated closing date, you’ll be scheduled to sign the final legal documents of the transaction at the escrow company. Your agent will keep you informed about this.

You’ll be signing the legal documents that will transfer the property to the buyer. You’ll need to bring your drivers license and your bank account info (routing and account info) to give to the notary so that the escrow company can wire your home sale proceeds as soon as the transaction is complete.

Around this same time, the buyer will be doing a final walk-through of your home. This is meant to make sure the home is in the same condition as when they first saw it. The buyers will sign a disclosure that is part of the contract verifying the property condition is the same and good to go.

Once the underwriter at the buyer’s lender gives the green light, they will draw up the loan documents and send them to the escrow company for the buyer to sign.

 

Tips For Selling Your Home Step 8: Closing

When the buyer signs their loan documents at the escrow company, you’re a couple days away from the transaction being official.

It’s important that when you leave the home, you leave it in good condition with nothing left behind, and if there are any special instructions coordinated in the contract, be sure to follow through on them. Your agent should remind you of what these are, if any, and should also be explaining the closing process.

A few key things are to leave all the sets of keys, garage door openers, as anything else you can think of that should stay behind.

At this same time, it’s safe to take the utilities out of your name.

Here’s how the closing typically works. Again, this will depend on which state you’re in, but in California, this is the usual process:

 

Home Selling Tips and The Three Steps To Closing A Sale

Step 1

Once the buyer signs their loan documents at the title company, the escrow officer will then send them back to the lender so that the underwriter can make sure all of the T’s are crossed and all of the I’s are dotted. Once the underwriter signs off on the loan documents and there are no more conditions for the buyer to fulfill, the loan is ready to fund.

Step 2

Funding means that the lender sends the buyers’ loan amount to the escrow company via wire. Once the escrow company receives the funds, they will disburse the funds accordingly (i.e, paying off the sellers mortgage, paying commission checks to the buyer and listing agent’s brokerage, net proceeds to the seller, etc).

Step 3

Usually, the day after the funding is when the transaction becomes official. This is known as recording.

The recording is a process where the escrow/title company physically sends someone down to your County recorder’s office with a copy of the grant deed. Then, someone at the counties office will give it the final stamp of approval. Once this happens, the transaction is official and you can officially celebrate!

By now, I hope you have learned numerous tips for selling your home. Each and every step is an important one, and all are interconnected. Selling your home may seem complicated, but with the help of the right real estate agent, it doesn’t have to be. If you’re in Silicon Valley and thinking of selling, we’d love to show you what five-star service is all about and how selling with SoldNest can save you tens of thousands.

Home Renovation Trends in 2018 that Every Homeowner Should Know

Small scale luxury that is both relaxing and functional is on trend for bathroom renovations in 2018.

Remodeling your home can seem like a daunting task, especially when trying to stay current with home renovation trends in 2018.

While a lot of what homeowners end up doing really boils down to personal taste, it doesn’t hurt to be mindful of what’s trending in home renovations if you are thinking about potentially putting your home on the market in the near future.

So, what home renovation trends are the most popular now that we’re a month to 2018? This post will give you the rundown of what you can do to make each part of your house as up to date as possible.

The kitchen

A focal point of the home, the kitchen is the place where functionality and aesthetics merge. This year’s home renovation trends see the kitchen as a place for bold colors that replace the white kitchens of years past. Moody blues and greens are popular choices for cabinets, and even appliances this year.

Dark countertops are also more popular. Black, dark green and multi-colored rust tones are more desirable this year. Another material to consider if you are renovating your countertop space is quartz. It’s incredibly hardy, anti-microbial and easier to maintain than its competitor, granite.

Home renovation trends in 2018 so far also indicate that high contrast marble is a more popular choice, with homeowners looking to make a statement with their countertops.

When it comes to finishing, gone are the days of kitchens that are entirely monochromatic. Mixing and matching color schemes are in style. One way to achieve this look when redoing your kitchen is to paint base walls or cabinets in a dark tone, and upper cabinets in an off white.

For appliances, a feature appliance like a stove or fridge in a bold color can make a statement.

The rise of the smart home

As with many areas of the house, kitchen renovation trends in 2018 are gravitating more and more toward taking advantage of what technology can offer.

Smart kitchens are on the rise, with touches like smart faucets that turn on and off automatically with motion detection. When it comes to appliances, smart fridges can tell homeowners when their groceries are beginning to run low.

Another renovation trend taking over kitchens this year comes down to making the best use of the space available, both with what’s visible and what’s not. Removing upper cabinets that are difficult to reach anyway can free up space to make the kitchen appear larger.

For cabinets that are essential, homeowners are increasingly trying to make these as efficient as possible in terms of space usage. Features such as cutlery dividers for kitchen drawers, or roll out drawers for pots and pans, allow storage space to be used in the most effective way possible.

Gray toned appliances with a dark metal finish are becoming more popular, a departure from the traditional stainless steel or white appliances of kitchens in previous years.

When it comes to kitchen flooring, hardwood floor remains a popular choice, but ceramic tile is not far behind.

A multi-purpose island is a great feature to consider if you're renovating your home in 2018.

Another area of the kitchen that is drawing more and more attention is the island. Home renovation trends in 2018 see the kitchen island as becoming a multi-purpose, central part of the room.

Not only for counter space, the kitchen island is also a storage solution. Sometimes it even contains appliances like a dishwasher or wine fridge.

Kitchen renovations often see the island becoming a bar and a seating space as well. This is particularly true now that open concept homes are more popular. Kitchens and living areas are blending into one more than ever before.

The bathroom

The overarching theme when it comes to bathroom renovation trends in 2018 is comes down to making use of small spaces. Sprawling bathrooms are a thing of the past.

Nowadays, homeowners are making the best possible use of smaller washrooms, while still paying attention to touches that can bring about a luxurious ambiance. Bathrooms are not just a place to get ready before rushing out the door in the morning.

This year’s renovation trends are treating these tiny yet essential rooms of the house as more of a refuge or a quiet place to relax as you prep or unwind from the day.

So what does this look like in terms of re-modelling? Walk in showers, Free-standing single bathtubs, and smaller but well designed toilets and sink bowls are in. The use of shelving as opposed to cabinets combined with large floating vanities all help increase the perception of space.

Bathroom design in 2018

When it comes to the bathroom sink, stone sinks that give off a natural, organic feel are trending this year. Brass fixtures are also making a comeback, both in the bathroom and other rooms of the house.

Colorfully and artfully designed tiles are also in style. Different shapes and textures are on trend, from diamond to arabesque to chevron patterns. Unique tiles aren’t just for the floor. Home renovation trends in 2018 see these being used on backsplashes, shower walls, and even as ceiling accents.

Just like in the kitchen, bathroom renovation trends this year indicate that these spaces will also go more high tech. Smart bathrooms have numerous possibilities for the tech-savvy homeowner.

Automatic faucets and showers that automatically know your preferred temperature are just the beginning. High tech toilets, which have already seen a rise to popularity in Japan, are starting to make their way here as well.

Small-scale luxury that is a prevalent bathroom theme this year can also be found in features like under floor heating, or installation of conveniences like a small fridge for medications or organic skincare products. Another on trend touch is a heated drawer for linens and towels.

Neutral décor with an organic feel reigns supreme in the bathroom this year. Trend conscious homeowners are gravitating toward whites, greys and warm browns for the walls.

The bedroom

In the bedroom, a casual and calm minimalist look is on trend this year. Similar to the bathroom, soothing neutrals and functional pieces are popular choices for renovating homeowners.

When it comes to accent choices, millwork feature walls and detailing have seen a rise in popularity. Shiplap, millwork panels and reclaimed wood boards aren’t a new phenomenon. But big box stores have make them more affordable as DIY options for accents. This trend isn’t going anywhere any time soon, and makes a great choice for bedroom feature walls.

Pendant lights and metallics hit the mark for bedroom renovation trends this year.

Lighting choices have moved away from the traditional bedside table lamp. This year, hanging pendant lights beside the bed are trending, and a metallic look for these is a popular choice.

In terms of utility, more bedroom renovations are seeing docking stations being built in as a handy place to charge cell phones and tablets without cluttering up nightstands or dressers.

The living room

Home renovation trends in recent years have seen open spaces taking the place of what traditionally were separate rooms. Kitchens and living areas now morph together to create spaces that are both for function and for relaxation all in one.

In the living room, earthy colors for walls are on the rise, combined with rich color choices for sofas. The organic feel is also prominent here this year. Many homeowners using mixed materials and implementing wood into their home renovation choices.

Living room renovation trends in 2018 see vintage lighting fixtures such as brass or copper being used for unique features, like hanging pendant lights. A more industrial look in the living room is also on the rise. Some homeowners are choosing concrete accents for their living space.

Outdoor home renovation trends in 2018

With so many home renovation trends to note for 2018 inside the house, it may seem easy to forget about outdoor space. But there are many ways that homeowners can take advantage of their backyard and their home’s exterior.

Unusual front doors that make a statement are becoming more popular this year. For the backyard, creating an outdoor dining space that is a focal point of the garden has become trendy. Outdoor oriented homeowners are making their dining area more of a destination within their garden. This creates a new sense of ambiance for outdoor meals.

Making your outdoor dining area a destination is a trend for outdoor renovating in 2018.

Also on trend this year when it comes to outdoor renovations is taking a fresh look at the common types of enclosures of years past. Traditionally, fences would divide a homeowner’s lot from their neighbor. Now, more and more homeowners are leaning toward the use of interesting plants to create an enclosure as opposed to a fence.

Renovating your home in 2018

Home renovation trends this year are as varied as personal preferences between individual homeowners themselves. Whether your home just needs a little bit of attention, or if you’re considering putting it on the market, having an idea of what is on trend when it comes to renovations is useful.

Renovating your home can be a formidable task. Try picking and choosing and specific area to focus on. It’s easier and more cost effective than trying to do everything at once.

This is particularly true if you’re thinking about selling your property. Home renovations can certainly add value. The right listing agent and marketing techniques can ensure that your hard work pays off when it comes to getting the best possible sales price for your home.

Reverse Mortgages Explained: Is Selling A Better Option?

Selling your home could be more advantageous than a reverse mortgage

For many homeowners, life situations may alter the best financial course of action for them when it comes to keeping or selling their property. Refinancing one’s home may be a necessary consideration, and a reverse mortgage may seem like a viable option.

What is a reverse mortgage?

A reverse mortgage is a type of mortgage through which a homeowner can borrow money against the value of their home. They receive funds in the form of a fixed monthly payment or a line of credit. There is no repayment of the mortgage that is required until the borrower dies, moves away or puts the home up for sale.

It is set up so that the amount of the reverse mortgage will not exceed the value of the home over the course of the loan.

They’ve been around for decades but recently people have become more and more aware of them as a potential debt instrument for homeowners. Reverse mortgages are sometimes cast in a negative light. The financial community as well as the media has been known to be skeptical of them.

Despite this, though, reverse mortgages have become increasingly popular amongst people who are “house rich and cash poor.” This is particularly true of many senior citizens who need additional income to pay for health or long-term care

How do reverse mortgages work?

Reverse mortgages function in the opposite way of a traditional mortgage. With a traditional mortgage, a homeowner borrows money from a lender when they purchase a home. They then make monthly payments to the lender to pay off the balance, while simultaneously building equity in their home. As time goes by, the homeowner lowers their debt by contributing to their mortgage, and in doing this, they increase their home equity increases. Once the mortgage is fully paid, the homeowner officially owns the home outright, never owing anything further to the lender.

A reverse mortgage, as the name suggests, works in the opposite way. Instead of making monthly payments to a lender, a homeowner receives monthly payments from them based on a percentage of the value of the home. This can be paid as a single lump sum. It can also be paid as a regular monthly cash advance that is paid for either as long as the homeowner lives in the home, or based on a certain number of years. Alternatively, it can be paid as a line of credit, or a combination of these options.

Regardless of how the reverse mortgage is set up, the homeowner will keep the title to their home. This serves as collateral for the loan. The homeowner is charged interests solely on the proceeds they receive. Both fixed and variable interest rates are available. Any interest will compound over the span of the reverse mortgage until repayment happens.

The long run

Over time, debt will increase while home equity will decrease for the homeowner. When the homeowner moves, sells the home or passes away, the lender will sell the home to regain the money that they would have paid out.

Once lender fees have been paid, any remaining equity in the home will be received by the homeowner, or in the case of death, by their heirs. In some cases, an heir will have the choiceto repay the mortgage without actually selling the home. According to the Federal Trade Commission, if the homeowner receives more payments than the home is worth, they will never owe more than the value of the home.

Should the homeowner fail to meet the obligations of the mortgages, for example, if they do not pay their taxes or insurance, or if the property falls into a state of disrepair, the reverse mortgage could become due. The homeowner is responsible for paying property taxes, homeowners insurance and for the overall maintenance of their home. But if the value dips lower than the amount the homeowner has borrowed for other reasons, such as a decline in the real estate market, the homeowner can’t be foreclosed upon.

What are the different types of reverse mortgages?

There are multiple kinds of reverse mortgages available. These include single-purpose reverse mortgages, federally-insured reverse mortgages and proprietary reverse mortgages.

Single-purpose reverse mortgages

Single-purpose reverse mortgages are usually aimed toward low to moderate income homeowners. The lender of this type of reverse mortgage decides how it can be used. It may be used to pay property taxes or to go toward repairs to the home.

Federally-insured reverse mortgages

Federally-insured reverse mortgages are also known as Home Equity Conversion mortgages. They are issued by private banks. Home Equity Conversion mortgages are insured by the Federal Housing Administration. They are the only reverse mortgage product that is guaranteed by the federal government.There are no restrictions in terms of income or medical conditions. There are also no regulations as to how the money from these types of mortgages can be spent. The main downside, though, is that for this type of reverse mortgage, the maximum loan amount is limited. At the moment, it Is limited to the lesser of the appraised value of the home or the HECM FHA mortgage limit of $625,500.

Proprietary reverse mortgages

These types of reverse mortgage can also be accessed from various lending organizations. They offer amounts that are higher than HECM loans, but the difference is they are not federally insured. They can also be significantly more expensive. Homeowners with homes of higher value will find these types of mortgages the most advantageous.

Pros and cons of reverse mortgage

As with most financial decisions, there are many pros and cons to consider. Here are few of the positive aspects as well as drawbacks to getting a reverse mortgage.

Pros

  • For a homeowner planning to stay in their home, a reverse mortgage can be a good, reliable source of cash flow.
  • It’s easier to qualify for a reverse mortgage than a traditional mortgage. This is because your credit score does not play a role in your application. In addition, you only need enough income or assets to continue to pay for things like homeowners insurance, property taxes and costs associated with maintaining your home.
  • For seniors, there are no taxes on the money that they get from a reverse mortgage. Since it’s not considered income, it’s not taxable.

Cons

  • The interest generated by the loan is not tax-deductible over its term. The only way that it can be deducted is when the loan is fully paid off.
  • Reverse mortgage loans can actually be more expensive than they appear at first. In addition to interest, reverse mortgages have a lot of fees and extra costs, such as mortgage insurance. These extra costs can add up quickly.  Sometimes it comes to the point where they are actually more expensive than regular mortgage fees. (To avoid this, it may be suggested to take out a reverse mortgage as a line of credit as opposed to a lump sum payment. By doing this, the homeowner only pays the interest and annual insurance premiums in the amount that is actually being withdrawn).
  • HECM sets loans on how much you can borrow from a reverse mortgage, particularly in the first year
  • Reverse mortgages use up equity in your home
  • Homeowners and their heirs will be left with fewer assets
  • Homeowners will not be able to give or sell their home to their children during their lifetime without repaying the mortgage first.

Selling your home vs. getting a reverse mortgage

For homeowners that are considering refinancing their home for additional income, there’s another option. They may consider selling their home altogether. For a homeowner who is willing and able to move, this could be advantageous. Selling gives the homeowner the ability to leverage the equity that they have built from their property.

Selling could be a better option anyway if the home is too big for the homeowner’s current needs. Many people decide to downsize after children grow up and move into homes of their own. Furthermore, if the current home is costly to maintain, or has high property taxes, moving into a smaller home may be a better option. Proceeds from the sale of the original home can be used to finance a smaller and more affordable home.

Another option for homeowners considering a reverse mortgage is to sell their home to their kids. A sales-leaseback agreement allows homeowners to sell their house. They then rent it back to using money generated from the sale.

The bottom line

Whichever route a homeowner decides to take, it is important to carefully evaluate the pros and cons as well as the financial implications of their decision. While reverse mortgages may be beneficial for some, selling may be a better and more lucrative option in the long run if it is affordable.

If after assessing your financial situation, selling seems like the best option for you, SoldNest can help. We provide expert real estate insights and digital marketing expertise for your property at just a 1.5% fee. We can maximize your final sales price while saving you money.

Getting Started With Backyard Lighting Ideas

String lights are just one idea of many when it comes to backyard lighting

Backyard lighting ideas come in all shapes and sizes. They range from quick and easy DIY projects to strategically installed fixtures. Regardless of your budget or the size of your backyard, there are countless ways to add life to your outdoor space through lighting.

Lighting can completely change the ambiance of a room inside of your house, and the same is true for the backyard. When it comes to outdoor space in particular, backyard lighting isn’t just aesthetically pleasing, it is also adds an extra sense of safety and increased visibility if you are outside at night.

Start by taking a close look at the lighting options your backyard already has. Identify where power outlets are, and where fixtures have or could be installed. This will make it easy to identify what’s missing, or see how you can work with what you already have.

Some general tips to bear in mind when making decisions for your next backyard lighting idea include:

  • Make sure pathways are well lit. This is an absolute must if you plan to be using your backyard at night.
  • Avoid light pollution by aiming lights carefully, and shielding bulbs to concrete light where you want it. Indirect light is ideal for patio spaces.
  • Consider task lighting, for example, around a cooking area in your backyard such as the BBQ
  • Think about going the environmentally friendly route, and purchasing solar powered outdoor lights.

Multi-dimensional lighting

Multi-dimensional lighting can do wonders to create a unique feel for your backyard. A well lit backyard should have lighting that is both functional but also decorative. Installing fixtures like wall scones on the side of your house ensures that you have the right amount of light necessary to entertain at night. But add some lighting to your garden, or string lights through the trees, and you can create a sense of ambiance for evening entertaining.

So, what are some backyard lighting ideas that you can test out right away?

Create lights out of canning jars

The first thing you’ll need to get started is a few indoor/outdoor lighting cords from Ikea or somewhere similar. You’ll also need a few large Mason jars.

Use a drill to cut a hole in the metal lid of the jar. You can also add some color by applying translucent outdoor glass paint. Then, screw the jars into the cord fixtures and hang in a cluster above an outdoor patio table or seating area. You may need to get an extension cord to reach a nearby socket for power.

Mason jars can be used both for candles and hanging overhead lights

Make paper bag lanterns

You can take outdoor string lights to the next level with some colorful paper bags and ribbons. This backyard lighting idea also has the added benefit of being a great party decoration.

All you’ll need is a utility knife to cut a slit through both sides of each bag, about two inches or so from the top. Then, open the bag up and cut an X in the bottom middle. You can slip ribbon, two feet in length, through the slits and knot it.

Take your string lights, and push a bulb through the X so that the socket is fully inside. Using tape, seal in the wire and socket, and do the same thing to cover the remaining bulbs.

Turn clay pots into outdoor lampshades

After purchasing a few small clay pots, you will need some chain. Slip a thin metal rod through chain ends, then, wrap an elastic band around the ends. Once this is done you can hook an LED light into the middle. Put the light and rod inside the pot, and pull the chain through the drain hole. The rod is then essentially a brace, holding everything in place. This way it’s also easy to remove the light when it comes time to replace the batteries.

Flip the pot so that the chain is right side up and hang from a flower pot hook attached to a fence.

Make tin can lanterns

Start by collecting a few tins cans of different sizes. Then, fill them with water and freeze them. Once frozen, punch a design using a hammer and nail. Once the ice has melted you can paint the exterior of the can.

Create small wire hangers for jars and hang on a railing

Using wire to wrap around the mouth of a mason jar is a quick and effective way to make a handle. This can then be hung on a railing or a balcony. Pop a tea light inside each one, and you have a series of mason jar candles.

Make cupcake lights

Similar to the paper bag lanterns, this is simply a matter of using an existing product for a brand new purposes. Colorful cupcake wrappers can become tiny lampshades for your outdoor string lights. Just cut an “X” in the bottom of each wrapper and pop them over each lightbulb on your string.

Fabric covers or translucent glass paint are just the beginning when it comes to outdoor string light ideas for your backyard

Hang tea lights

Using several pieces of ribbon of different lengths, hang tea lights from tree branches in your backyard. Make sure that the ribbon is long enough to avoid the candle from being a fire hazard.

Use a hula hoop and icicle lights to make a chandelier

Wrap ribbon around an old hula hoop. Then, wrap the entire thing with icicle lights and hang from a porch ceiling for a different and easy to assemble piece of backyard lighting.

Make an illuminated table runner with beer bottles and Christmas lights

Recycled beer bottles stuffed with tiny Christmas lights, and placed strategically in a row along the middle of a picnic table will not only light up your next outdoor meal, but can also be assembled in a matter of minutes.

Light up your trees

Wrap tiny outdoors lights around the entire trunks of a couple of small trees in your backyard. This backyard lighting idea works for not only summer entertaining, but can also make a great holiday decoration. Lights like these ones from Restoration Hardware should do the trick.

However you decide to do it, adding different kinds of lighting to your backyard is a great first step to refresh your space. If updating existing fixtures, make sure to turn off any necessary breakers, or consult an electrician as appropriate.

Lighting can make all the difference

Regardless of how you decide to refresh your outdoor space with these backyard lighting ideas, it can make a world of difference. Even the smallest or most subtle details can create a new ambiance for your backyard for both you and guests to enjoy.

How Smart Home Technology Can Help Sell Your Home

Smart home technology can be highly appealing to the next generation of buyers

Considering how smart home technology can help sell your home is a new and exciting possibility in the world of real estate. It’s unique to this day and age. But by 2020,  projections show that more than 30 billion devices will be part of the “Internet of things.”

The primary motivation for most people to invest in smart home technology is safety. But many people also want to make their home more energy efficient and convenient.

As a seller, there are several possibilities as to how smart home technology can help sell your home. Smart home technology can be a noteworthy advantage to your property that is likely to be well received by many prospective buyers. This is especially true in a tech-fueled area like Silicon Valley.

What is smart home technology?

Smart home technology includes everything from heating and cooling controls to lights, appliances and keyless entry systems, all controlled remotely by a smart phone or tablet. The overarching goal is to make life easier and safer, while saving money on utility bills. All of these points can be highly appealing to a buyer looking at your property.

How smart home technology can help sell your home to millennials

The generational appeal is also strong. More and more millennials are breaking into the real estate market and looking for their first home. This generation and Gen X’ers that came before them love smart home technology for the convenience and security it provides. In fact, studies show that 72% of millennials would pay $1,500 or more to add smart features to their home. And 44% would invest over $3,000 to transform their current home into a smart one.

If you’re targeting a millennial or Gen X homebuyer, it is very likely that adding smart technology to your property before you put it on the market will be advantageous. These features can serve as a great selling point when showing a buyer your property.

And the good news is, you don’t necessarily have to do a full home makeover. Even just adding a few smart home features can be useful selling points for your property.

We’ve consolidated a list of the most popular smart home features available right now for you to chose from:

Smart security

  • What is it? Smart security includes features like cameras, keyless locks, motion sensors, smart door and window sensors.
  • Why it’s a selling advantage: You can assure your potential buyer that they will have control no matter where they are. They can eliminate worries about things like the garage door being left open, because it’s all controlled remotely. Smart locks will save them the trouble of having to cut extra keys. Security cameras will allow them to have better visibility into their home while they’re out. This is especially advantageous if they have children or pets.
  • How to install it: There are many smart home security installation tips and tricks available online, like this step-by-step guide to installing a keyless lock.
  • What’s on the market now: For a keyless lock option that will work with your current deadbolt, check out the Augusta Smart Lock. As far as smart security cameras go, the Nest Cam Indoor provides 24/7 live video, and sends notifications when it detects activity.

Smart thermostat

  • What is it? Similar to smart security systems, smart thermostats work via smart phone or tablet. This means you can adjust your home temperate no matter where you are.
  • Why it’s a selling advantage: Smart thermostats allow you to save on energy bills. When asking yourself how smart home technology can help sell your home, lower bills will likely appeal to any buyer. With smart thermostats you can adjust the temperate of your home to your habits and daily routine. And you can do it from anywhere. All you need is an internet connection.
  • How to install it: A smart thermostat is a feature you can install yourself in a few easy steps.
  • What’s on the market now: Unrivalled by its competitors in terms of specs and capabilities, the Ecobee4 includes responsive display, remote sensor technology and built in compatibility with Amazon Alexa.

Adding smart thermostats are one way to use smart technology to sell your home.

Smart lighting

  • What is it? Lighting systems that are controlled remotely by smart phone and tablet. But with the added bonus of being able to adjust themselves depending on natural light and weather pattersn. Smart bulbs are more expensive than regular light bulbs, but they last longer and are more energy efficient.
  • Why it’s a selling advantage: Smart lighting brings many benefits when it comes to how to use smart home technology to sell your home. Smart lighting can allow for a better sleep. (Lights can automatically adjust to time of day and can aid the natural production of melatonin). They can create a better mood by adjusting to darkness in winter months and according to the weather. Smart lighting also provides increased security. You can program it to behave in a way that makes it appear that you are always home. You can also point out to your buyer that they will be saving money on energy bills from motion activated lights.
  • How to install it: There are many different ways to outfit your property with smart lighting, and a few considerations to take in mind when beginning the installation process.
  • What’s on the market now: The Philips Hue White and Color Ambiance Equivalent Starter Kit creates light of multiple colors throughout your home and can be controlled by voice.

Controllable shades

  • What are they? Blinds or shades that operate via smart phone or tablet. They can be set to go up or down at certain times of the day.
  • Why it’s a selling advantage: One major benefit of controllable shades is convenience, especially for windows that are more difficult to reach. It’s possible to set smart shades to open when it’s time to get up. They function as a natural alarm clock. Furthermore, they will save on energy bills by having shades open or close depending on the time of day to maximize on natural light. They also have the added security benefit of being able to adjust when you’re away, making it look like someone is always home.
  • How to install them: Handy YouTube tutorials show you how to put controllable shades up in a snap.
  • What’s on the market now: Smart Shades are not only controllable by smart phone or tablet, they also run off of solar power.

Emphasizing your selling points

So, you’ve outfitted your house with these products and are ready to put your home on the market. But what do you and your real estate agent need to know to create compelling selling points for your possible buyer?

Smart home technology can be entirely controlled by smart phone or tablet.

First, you will need to fully understand the system and its features. You have to be able to talk confidently about these products and why they are a great addition to the home. The more comfort and familiarity you and your listing agent have with these products and how they work, the more trust you will build in your buyer. You’ll be able to answer their questions and make them feel at ease.

Putting together a short guide could also help. It’s something your buyer could potentially take away and read on their own about the smart features in your home. Since this tech is new to most people, millennials included, it will help persuade a potential buyer who may be reluctant because they think the smart technology is too complex.

Talk about privacy

Since smart home technology backs up to the cloud, there may be concerns around privacy when transitioning from one home owner to the next. Being open about this with your buyer will make them feel more at ease. Refer to the checklist from the Online Trust Alliance for a breakdown of steps you and your buyer can follow when it comes to transferring ownership of your smart home to keep both parties’ personal information safe.

Getting ready to sell your smart home

The advantages of smart home technology are undeniable, from energy savings to increased security. Having a real estate agent who knows how to market your property to the right audience, and can confidently explain the advantages of your smart home technology will allow you to sell your home for the best possible price. A customized marketing plan is critical to success, and is just one part of the selling process that can save you thousands with SoldNest.

Sell your home for the highest price at only a 4% real estate commission

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What Does Contingent Mean in Real Estate?

Real estate contingencies are important to understand for both buyers and sellers

Understanding the answer to what does contingent mean in real estate is critical whether you’re a buyer or seller. It’s undeniably a pivotal part of the home selling and home buying process.

So, exactly what does a contingent offer mean in real estate? A contingent offer occurs when an offer on a home has been made by a home buyer and has been accepted by the seller, but the contract has certain criteria that must be met to finalize the transaction.

For a contract to be binding, a condition put into the contract needs to be met first. This is also referred to as a contingency.

In this article,  I’m going to outline everything you need to know about contingencies. This includes how real estate contingencies can protect you and how you can use them as leverage when selling or buying your home.

How Many Contingencies Can be in an Offer?

Technically, there can be contingencies of any kind in a real estate transaction. But there are three you’ll be most likely to hear about. These include an inspection contingency, an appraisal contingency, and a financing contingency. These contingencies are standard on the purchase contract in California, and are also common in most other states.

Sometimes, a buyer makes an offer on a home for sale that is contingent on the sale of their current residence. This type of contingency isn’t as common, particularly when market inventory is low and demand for homes is high.

This type of market is known as a seller’s market. It generally means there are more buyers than there are homes for sale. Because of this, buyers need to stay competitive with their offer. This is due to the fact that sellers often will have several offers to choose from. This usually means that a buyer won’t be placing a contingency that would take up more time for the seller. The sale of a buyer’s current residence that is placed as a contingency in an offer is usually more common in a less competitive market.

How do Contingencies Work in Real Estate?

When a buyer is thinking about putting an offer on a home, the first thing they do is their homework. This includes researching nearby recent sales, and requesting to look at all of the seller’s disclosures, reports, and inspections. Most buyers will ask their agent to gather this information. Then, the buyer and their agent will thoroughly go through and do as much research as possible.

When the buyer is ready to put the offer together, they’ll discuss which terms they would like to include. The two biggest ones involve price and the contingency periods. In California, there are standard time frames for the contingencies – but the buyer has the option to reduce the timeframes, or waive them altogether.

When selling your home, you shouldn’t only look for the highest price being offered. You should be looking at the contingency periods as well. Sometimes the highest price isn’t always the best offer.

Here’s an example to illustrate this point. Imagine a scenario in which two prospective buyers have placed an offer on a home. One buyer offered $1,250,000 and waived all of their contingencies. The other buyer offered $1,260,000, but kept their inspection and appraisal contingency.

Real estate contingencies should be considered along with price when evaluating offers from buyers.

Which one would the seller be more inclined to accept? The seller’s agent should be going over the details, including pros and cons in a scenario like this, but this is an example where contingencies in a real estate transaction can influence a seller’s decision on an offer.

Where Escrow Comes In

One of the biggest effects and influences of contingencies in a real estate transaction has to do with the escrow deposit. This is not only the case in California, but also in many other states across the country. When the contract is ratified, the buyer needs to put a deposit in escrow within 72 hours. This is because 72 hours is the default timeframe, but this can be cut down to less time if the contract says so. This deposit is usually 3% of the purchase price and is applied to the buyer’s down payment.

There’s a key piece of information to note if you’re a buyer. In order to have your offer look a little more enticing to the seller, state that you’ll deposit the 3% within 24 hours. If you’re a seller, your agent should be a little aggressive. They may see if they can get the buyer to make the escrow deposit within 24 hours instead of the standard 72.

Once the buyer removes their contingencies, their deposit can be at risk. This means that if the buyer wants to back out of the transaction after releasing their contingencies, then they may be at risk to losing their deposit to the seller.

If the buyer still has contingencies in place, and wants or needs to back out for a specific contingency reason, then they can do so and get their deposit back. You’ll want to confirm what is specifically stated in your contract. Your agent should be able to go over this with you.

Next, let’s break down each of the big three contingencies in real estate that are the most common.

Home Inspection Contingency

The home inspection contingency refers to the timeframe allocated for the buyer to do any and all of their inspections. This includes having their own home, termite, roof, or pool inspector come out to the property. It also includes bringing a contractor out to the home. Any other type of inspection the buyer wants carried out would also fall under this real estate contingency.

When selling a home, the seller needs to disclose as much information about the house as possible. Anything and everything they know, whether good or bad, will need to be detailed in standard disclosure forms.

The seller’s agent will provide these standard disclosure forms to the seller to fill out. These disclosure forms, along with any reports and inspections the seller has done, should be put together by the seller’s listing agent. They should be easily accessible for any buyers and their agents by the time the house goes up for sale. This can be done in several different ways. Some examples include putting a link directly on the MLS that only other agents can access or having a Dropbox or Google Drive link ready to share. They can also be sent via email with attachments.

Along with the disclosures, the seller will need to provide certain reports. The two most common ones in California are the title report, also known as the prelim (short for preliminary title report), and the Natural Hazard disclosure.

Preliminary Title Reports and Natural Hazard Disclosures

The title report is the legal description of the property. It documents who the current owners are, any liens on the property, and encroachments. It also documents easements, the current tax rate and instalments for the current owner, as well as how the current owners are vested.

The natural hazard disclosure is a report that is required in the state of California that the seller must provide. The disclosure will state if the home being sold lies within a hazard area. There are six of them that must be disclosed. They include a special flood hazard area, and dam inundation. They also include very high fore zone, wild land fire, earthquake fault zone, and a seismic hazard. As a side note, if the property does fall within one of these hazard areas, most lenders will require extra insurance that the buyer will need to purchase.

A natural hazard disclosure is a report that is required along with any disclosures that are part of the home inspection contingency.

In addition to providing the required disclosures and reports, the seller has the option to have any inspections done on the property that they’re selling. If you’re a seller, you might be thinking that this is a waste of money. In fact, the opposite is true.

Two Reasons For Getting Inspections Upfront

It’s in your best interest to complete inspections on your home upfront for two reasons. One, if there are any major problems that arise from these inspections you will know about it and decide if you want to tackle it before you put the house up for sale. But the second reason, in my opinion, is the most important. The buyer will have the opportunity to see these inspections before writing their offer. This is huge and can pay off for you in a big way.

If you’re a home buyer and you’re doing your research on a home that you’re interested in, wouldn’t you be a bit more educated on the property and be able to make a more informed decision on your offer because you have this information upfront? Chances are, you would – and most buyers do.

In California and especially in Silicon Valley, home, termite, roof, and pool inspections are the most common. Again, these are optional for the seller, and either way, the buyer will have the option of doing their own inspections once the contract is ratified. But it’s in everyone’s best interest if these are provided upfront.

A Firsthand Example

As a seller, your agent should be able to leverage these inspections and negotiate a better offer. I just sold a house in Almaden Valley, which is an upscale neighborhood in San Jose. My clients were adamant about not doing inspections upfront. They purchased their house in 1985, and said when they bought it, the seller didn’t provide any inspections and that they had to pay for them. Why should they have to conduct inspections for a new owner? I explained how the buyer would most likely include a home inspection contingency in their offer if we didn’t provide one upfront. Eventually, they decided to get a home and termite inspection.

Both reports came back very clean, with only the home inspection having a few minor recommendations. Because we had the inspections upfront, this helped the buyer feel more comfortable in writing the terms of their offer. This also helped me negotiate their offer $100,000 above our asking price without any buyer contingencies. The buyer did all of their homework and decided to use our inspection reports in their decision of waiving their contingencies with their offer.

Needless to say, having these inspections done upfront helped the seller get an offer that they may not have without them. It also helped the buyer get their offer accepted on a home that they really love.

Sell your home for the highest price at only a 4% real estate commission

Appraisal Contingency

An appraisal contingency refers to the time frame the buyer has to not only have their appraisal completed, but more importantly, signed off by their underwriter at their lender.

In a hot market (like the one we’re in now in Silicon Valley), also known as a seller’s market where the supply of homes for sale is very low and buyer demand is very high, it’s not uncommon for a buyer to reduce or even waive their appraisal contingency.

An appraisal contingency usually only applies to buyers who are getting financing. But it can also sometimes be a part of the contract in an all cash transaction. This, however, is not that common.

An appraisal is required by every lender and is a condition on the buyer’s loan, as the house is the collateral for the loan amount the buyer is requesting. The bank wants to make sure that the house is worth what the agreed upon sales price is.

The appraisal contingency is not only important for the buyer, but also for the seller too. If the house does not appraise for the sales price and the buyer has an appraisal contingency in their offer, then three things could happen. One, the buyer can try to renegotiate the price. Two, the buyer can pay the difference. Or three, the buyer can back out of the transaction.

The Importance of Comparables

If you’re a buyer, you want your agent to pull comparables and do their homework. They will want to look at what has recently sold in the area before writing your offer. A good agent will not only pull the comps, but will also make adjustments. This is similar to what an appraiser would do. When comparing the subject property to what has recently sold, some of these comparables might include the condition of the home and the location of the home on the street. Why is the location on the street important? If a home is on a corner, by a stop sign, or on a busy street, the value can be 3-10% less than it otherwise may be. Comparables may also include certain upgrades to the property, as well as proximity to good schools.

You and your agent will also need to take into account the most recent trends in the neighborhood. Is there a very low supply of homes, and are they selling quickly? If so, then you should factor in a small percentage increase in value compared to a home that sold 3-6 months ago. Doing your homework and working with an experienced agent who knows how to make these adjustments can only help you in making a more educated decision on your offer price.

What Happens if the Appraisal is Lower than the Sales Price?

A lender will only use the sales price or the appraised value, whichever is less. A lot of the time, the appraisal will come in at or right around the purchase price. The appraisers get a copy of the purchase contract before they go out to the house. If the value of a home cannot be justified with surrounding comps, then the appraised value may very well be less than the purchase price.

When this happens, the lender will use the appraised value as the amount that they’ll lend on. For example, if the buyer and seller agreed upon a $1,200,000 purchase price and the appraised value comes in at $1,150,000, then the lender will lend on the $1,150,000 – not the $1,200,000. In this scenario, the buyer does not pay the full difference of $50,000. This is a source of confusion for many.

If the buyer planned on putting 20% down on $1,200,000, that means they planned on a $240,000 down payment. If the value from the appraisal comes in at $1,150,000 and this is what the lender is going to lend on, then that means tehy’ll need to pay 20% of $1,150,000 (which is $230,000) plus the difference of $50,000. This means that your down payment would be $280,000. In other words, if the appraisal comes in lower than the purchase price, then the buyer will need to come up with 20% of the appraised value, plus 80% of the difference between the appraised value and purchase price.

What Does This Mean?

If you’re the buyer in this scenario, this means you will now need to put down $280,000, which is $40,000 more than what you anticipated. This is why having a good agent to assist you with justifying your offer price in a seller’s market is important. In many cases, the offers are above the asking price. If you’re waiving your appraisal contingency, (which many buyers do in a hot market), then you want to be sure that there’s a good chance that your offer price can be justified by recent sales and the necessary adjustments.

If you’re a seller and you receive an offer without an appraisal contingency, your listing agent should be doing a lot of vetting on the buyer. They should be doing this anyway, but more so when an offer comes in without an appraisal contingency.

Why Vetting the Buyer is Important

Let’s say you’re selling your home, and you get an offer for $1,500,000. Your agent gets the offer, the signed disclosures and reports, the buyer’s pre-approval letter, and proof of funds for the 20% down payment. In Silicon Valley, submitting these items with an offer are pretty standard. In other parts of California and in other states, it’s not as common.

Now, let’s say you accept the offer. Next, the buyer puts down their escrow deposit and the lender orders the appraisal. But the appraisal comes in at $1,440,000. Does the buyer have enough funds to pay the difference? You and your agent aren’t sure, because your agent didn’t confirm this beforehand.

Your listing agent should always ask the buyer’s agent if the buyer has any more funds. They should also ask what happens in a scenario where the appraisal comes in less than the purchase price. If the buyer only has enough funds for the 20% down payment, then this is something you’ll need to take into consideration when looking at their offer.

Loan Contingency

A loan contingency, also known as a financing contingency, is the time frame the buyer has to make sure they’re getting the loan.

A loan contingency is not the same thing as a pre-approval. When a buyer removes their loan contingency, they’re just about 100% certain that they will have no issues with the loan.

When a buyer receives pre-approval, they usually submit their most recent pay stubs, tax returns from the previous two years, and their most recent bank statements along with their loan application. Depending on who the lender is, the loan officer may issue a pre-approval. In other cases, it will come directly from an underwriter. It’s ideal if the buyer gets the pre-approval after having an underwriter look at their initial loan documents.

The underwriter is the person at your bank who is looking over all of your loan documents. They are the decision maker. A pre-approval will still have outstanding conditions such as the purchase contract, appraisal, and title report, among others. But when the pre-approval comes directly from the underwriter, all parties involved can be a little more confident that the buyer will be able to obtain financing.

What Happens Next?

After the contract is ratified, the first thing the buyer and their agent will want to do is tell the loan officer of the offer’s acceptance. The loan officer will start the loan process right away. First, they will need a copy of the contract, the title report, and the escrow company information.

At this point, the buyer’s loan is conditionally approved. This means the lender is going to approve them, but only after they meet a certain number of conditions. Once they meet all of these conditions, then the lender will draw the loan documents and get them ready for the buyer to sign. This process can take anywhere from 20-30 days.

When the buyer releases their loan contingency, they want to be 100% certain that there will be no issues with the loan. Before a buyer waives their loan contingency, they should have a discussion with their loan officer. They will want to tell them that they’re removing their loan contingency and will also want to make sure that the loan officer gives them the green light.

As a seller, your listing agent should be doing a lot of vetting when you receive an offer. Much like asking for proof of additional funds, the seller’s agent should make a phone call to the loan officer and have brief discussion with them about the buyer’s financing situation. This can give the seller and the listing agent a clearer picture on how just how well qualified the buyer is.

What Does Contingent Mean in Real Estate?

So, how does one sum up the answer to the question “What does contingent mean in real estate?” The biggest takeaway to remember? You shouldn’t count on the transaction being close to complete until the removal of all of the contingencies.

Contingencies in real estate are important for both buyers and sellers to consider.

If you’re a buyer, make sure to do your homework and have contingencies in your offer. This of course could vary depending on what kind of market you’re in. Regardless, I always suggest to my clients that they should have an inspection contingency at the very least. And depending on the situation, I almost always suggest an appraisal contingency as well. In a tumultuous seller’s market, like the one Silicon Valley has been in for some time, often the buyer doesn’t have a choice but to waive all of their contingencies. In a neutral market or a buyer’s market, the opposite is true. Because the number of homes for sale is higher than usual and the demand isn’t as high, home buyers have more leverage.

What You Should Do as a Seller

If you’re a seller, make sure your listing agent is doing a considerable amount of vetting on the buyer and their offer. Make sure they’re calling the loan officer for the buyer before you decide which direction to go with the offer. Also make sure they’re playing through every scenario. For instance, if the appraisal comes in short and there’s no appraisal contingency, can and is the buyer willing to pay out of pocket? Do they have pre-approval from an underwriter? Or did a loan officer issue it?

As a seller, your listing agent’s job is negotiate the best possible terms in the offer you accept. This doesn’t always mean price. Sometimes, an offer with strong contingencies, but lower price compared to another offer can be better. One important thing to remember: don’t celebrate until all contingencies are released from the buyer. In fact, don’t celebrate until your home sale proceeds hit your bank account. Never count on the sale of your home almost being completed until the buyer has released all of their contingencies and the appraisal is completed without any issues.

If you’re thinking of selling your home and live in Silicon Valley, your neighborhood SoldNest agent can sell your home for more and save you thousands. Not only can we help ensure you receive the best possible offer in terms of both price and contingencies, but we also provide better overall service and marketing – and only charge a 4% commission. To see what your home might sell for, we’ll provide you with a thorough market analysis. You can request one here.

How Much Are Seller Closing Costs in California?

Figuring out the closing costs associated with your property is important process for a seller in California and nationwide.

If you live in the Golden State and are thinking about selling your home either now or sometime in the near future, then one of the first questions you might ask yourself is “How much are seller closing costs in California?”

Selling your home is probably one of the biggest financial transactions you’ll ever make. It’s important you understand the costs involved and also how they will impact your bottom line. We’re going to break these down in detail. First, this article will go through the closing costs for a seller in California. Then, it will also show you tools and resources that will help you get a rough estimate on your net proceeds and if you’re in Silicon Valley, potentially save you thousands of dollars.

Understanding What Seller Closing Costs in California Are

First, it is important to understand what exactly closing costs for a seller in California consist of when you are about to sell your property. There are four major groups these closing costs can be categorized under. These include:

  • Real estate commissions
  • Escrow and title fees
  • Transfer taxes
  • Miscellaneous items

Some of these costs can vary depending on what county and city you live in. Depending on the value of your home and the final selling price, your closing costs can come out to a large amount.

City transfer tax in California

Many Realtor’s ® avoid talking about a seller’s closing costs because it can be an uncomfortable conversation for them. This is often because they have a hard time justifying their commissions. Understanding what your closing costs will be and how much these are going to cost you when selling your home will help you be better prepared in knowing who and what you’re paying for, as well as why. The next section will break this down further.

What Is The Real Estate Commission In California?

The average real estate commission in California is 5-6%. But you don’t necessarily have to pay this amount. Contrary to what some real estate agents will tell you, real estate commissions in California are negotiable. In fact, it says this on the first page of the listing agreement you’ll sign with your agent.

 

real estate commissions are negotiable in listing agreement

 

When you go to sell your home, you will pay your listing agent’s commission. You will also pay the buyer’s agent’s commission. The usual 5 or 6% is normally split 50/50. When you commit to your Realtor ®, you will sign a listing contract with them. This contract is usually an exclusive agreement between you and the agent’s broker. (The broker refers to the company that the agent works for).

The California Listing Agreement When Selling Your Home

When you sign the listing agreement, there are a few important things that you’ll want to look out for. One of these things is the total commission. It’s important to understand how much is going to your agent’s brokerage, as well as how much is going to the buyer’s brokerage. Some listing agents will avoid talking about this when discussing the closing costs for a seller. This could be because they may try and keep more of the commission for themselves.

An example of this might be an agent who is charging you a 6% commission, but really paying the buyer’s agent 2.5% and keeping 3.5% to themselves. This is something you should look out for and discuss with your agent upfront. The listing agreement you sign with your Realtor ® specifies not only the total commission percentage but also how much your listing brokerage will be paying to the buyer’s agent.

Below is an example of our listing agreement. The 3.5% is the total commission that the seller pays. Of this, 2.5% is paid to the buyer’s agent (if the buyer is represented by another brokerage). If the buyer is represented by SoldNest, then the total commission drops to 2%.

 

California real estate listing agreement

 

This is where your agent can add in any additional terms to the agreement.

 

real estate commissions in california

 

Since we’re talking about the listing agreement, I’ll mention one more thing you’ll want to watch out for. This is an exclusive agreement between you and the brokerage your agent works for. This means that you cannot work with another agent to sell your home for the time period that the agreement is good for.

Many agents will tell you that the listing period has to be six months – it doesn’t. Similar to the commissions, this is also negotiable. Other brokerages will tell their agents to always say or use six months because this will ensure they still get paid even if your home takes longer to sell. You should only agree to a time period that you’re comfortable with. These dates are filled in on the top of page one.

 

real estate listing agreement dates

 

Saving On Real Estate Commissions in California

How can you save on real estate commissions when selling your home? There is one critical first step. Ask. Real estate commissions are negotiable. Any agent who tells you otherwise, or paints the picture that commissions are non-negotiable, is flat out lying. Most agents avoid talking about commissions because they can’t justify how much they’re getting paid. Instead, they’ll talk to you about how great their company is that they work for (which has no impact on the sale of your home). They may also talk about who they are, and how long they’ve been in the business. While this may be interesting background information, it doesn’t necessarily correspond to how well they will be able to sell your property.

Interviewing a real estate agent is just the first step of the home selling process. Finding out how much you are going to pay in commission should be one of a few important questions you can ask upfront. Your goal should be to try and get the best service and the best marketing at the lowest commission. Along with this, you want to be partnering with someone you feel comfortable with.

There are some agents who will charge you less in commission. But most of the time, you’re not getting the service and the marketing that you should. Most of these discount real estate agents only do the bare minimum. This includes putting your home on the MLS, having an open house, and having flyers made. It’s not to say that real estate agents shouldn’t do these things. They should do these things and more.

Time For A Change

Many homeowners think the seller closing costs in California are too high and due for a change. We agree. This is one of the reasons why SoldNest was founded. We’re a full-service brokerage with lower commissions.

Below is an image showing how much a seller would pay for the “standard” real estate commissions in California on a $1,500,000 home compared to what they would pay with SoldNest.

 

Silicon Valley Real Estate Commissions

 

Commissions are a fundamental part of seller closing costs in California. When selling your home and discussing commissions with your potential Realtor ®, the most important thing that you should do is ask how much they charge. If they respond with a total commission of either 5 or 6%, then ask if they will do it for less. After all, the worst thing they can say is ‘no’. Some might respond and tell you that their broker doesn’t allow them to. Most of the time though, this is false.

Don’t Compromise On Quality When Selling Your Home

It’s also important to remember in these conversations to ensure you are not getting a lower quality of service. You should be getting a full-service listing agent who will do more than just put your house on the MLS, hold an open house, and have some flyers made. Your agent should know how to structure a specific marketing plan for your home to maximize interest and create the highest possible demand. Doing so can get more buyers interested in your home and help drive the potential selling price higher.  Targeted digital advertising is better today than ever before. There is no reason not to have a customized and tactical marketing plan for the sale of your property. And it shouldn’t cost you extra to do so.

Your agent should know how to structure a specific marketing plan for your home to maximize interest and create the highest possible demand. Doing so can get more buyers interested in your home and help drive the potential selling price higher.  Targeted digital advertising is better today than ever before. There is no reason not to have a customized and tactical marketing plan for the sale of your property. And it shouldn’t cost you extra to do so.

Paying less than the average California real estate commission rate can help save you tens of thousands of dollars. All that you have to do is ask.

SoldNest 1% Listing Fee

Escrow Fees In California

One of the first things your listing agent will do after you sign the listing agreement with them will be to open escrow. It’s customary in California for the seller to choose which escrow company they’d like to use. If you have one that you want to use, you can mention the name and contact info to your listing agent. Alternatively, your agent can do it for you. Working with an escrow company isn’t necessarily the first thing that comes to mind when you think about putting your property on the market. But it is an important part of the final stages of selling a home, and the overall seller closing costs in California.

Alternatively, your agent can do it for you. Working with an escrow company isn’t necessarily the first thing that comes to mind when you think about putting your property on the market. But it is an important part of the final stages of selling a home, and the overall seller closing costs in California.

Working With An Escrow Company

You might ask “Why does there need to be an escrow company?” “Escrow” is a neutral third party that handles the transfer of the deposits, documents, funds, and other things in a real estate transaction. The funds are held in a trust with your escrow officer (escrow agent) until a specific condition or event takes place according to the contract signed by the seller and the buyer. In other words, the escrow company is the party that crosses all the T’s and dots all the I’s in order to protect both the buyer and seller. An escrow officer acts as a neutral third party throughout the entire closing process.  It is important to ensure that the buyer and the seller are both protected as money and property change hands.

For providing their services, the escrow company charges a fee. These are usually referred to as “escrow fees” on your settlement statement. A settlement statement shows the disbursement of your costs as well as your net proceeds. You will see this when you sign the final documents. Exactly who pays the escrow fees in California will depend on which county your property is in.

A rough calculation of the cost is $2.00 for every $1,000 of the sales price, plus $250. So if your home sells for $1,000,000, and you live in a county that requires the seller to pay, you’ll pay an escrow fee of roughly $2,250. Most escrow companies charge around the same amount.

Title Insurance

Another fee that you’ll see on your settlement statement is title insurance. Sometimes title insurance is bundled alongside escrow fees. Title insurance is an insurance policy that protects a party from a financial loss due to defects on the title. There are different policies that cover different things. Typically, a title insurance policy usually protects the party from things such as someone claiming ownership of the property. It can also protect against liens that might pop up during or after the transaction closes. Sometimes in the process of selling a property, it can turn out that more people have a right to ownership than previously thought. Title insurance works to protect against this. For the buyer, title insurance protects against things like potential unpaid debts that the seller may have had, ensuring that they don’t have to take these on.

Typically, a title insurance policy usually protects the party from things such as someone claiming ownership of the property. It can also protect against liens that might pop up during or after the transaction closes. Sometimes in the process of selling a property, it can turn out that more people have a right to ownership than previously thought. Title insurance works to protect against this. For the buyer, title insurance protects against things like potential unpaid debts that the seller may have had, ensuring that they don’t have to take these on.

Title vs. Escrow

A title insurance policy is issued by a title company. Sometimes, escrow companies are under the same umbrella as the title company. Title companies are usually big corporations and many of them are publicly traded. Escrow companies take a lot less capital to start and can be their own separate entity. In Northern California, the escrow company will usually handle the title services. In Southern California, they are usually two separate companies during the transaction.

Similar to how the cost of escrow fees are determined, who pays the title insurance in California depends on the county your property is in. Sometimes the buyer pays for it, sometimes the seller pays for it. In other cases, it can be split 50/50.

Whether the seller pays for it or not, the policy covers the buyer. If the buyer is getting financing, they must also purchase a similar policy that protects their lender.

Not sure what these fees will mean for you? You can use a California escrow fee calculator from Old Republic Title company to get an estimate on what you might be charged based on your sales price.

You can also see a separate breakdown of who pays escrow fees in California

California Transfer Tax

Part of the closing costs for a seller in California is city and county transfer taxes. These are two separate tax payments made to the county and city where the property is located. Every time a property changes ownership, the local governments want a piece of the pie.

Every county in California has a transfer tax except for San Francisco County. The cost of county transfer tax in California is $1.10 for every $1,000 of the sales price. So if your house sells for $1,000,000 and your property is not located in San Francisco County, then the county transfer tax would be $1,100. This tax is another one to be considered in closing costs for a seller in California.

Not all cities in California have a transfer tax. Only some of them do, and the city transfer tax is either paid for by the buyer, the seller, split 50/50 between the two, or is negotiable. Your listing agent should be able to break these costs down for you upfront when meeting with you about selling your property.

The cost for the city transfer taxes varies from place to place. In Santa Clara County, areas San Jose, Palo Alto, and Mountain View all have city transfer taxes. The San Jose areas also include Almaden Valley, Willow Glen, Evergreen, and Silver Creek. The cost is $3.30 for every $1,000 of the sales price. On a million dollar sales price, this comes out to $3,300. For these three cities, the cost is split 50/50 between the buyer and seller. Cities in Santa Clara County that do not have a city transfer tax include Saratoga, Los Gatos, Cupertino, and Sunnyvale.

Real estate city transfer tax in San Francisco operates under its own unique calculation. If your property is in San Francisco County, the chart below will give you an idea as to roughly how much your city tax will be based on your sales price.

City transfer tax in California when selling a home

Miscellaneous Fees As Part Of Seller Closing Costs In California

When you see the final breakdown of your closing costs when signing the final paperwork for your real estate transaction, you’ll notice there are several miscellaneous items. These aren’t anywhere near the cost of the other charges as part of a seller’s closing costs. Even though they take a smaller hit overall on your finances, it is still nice to know what these may include.

Some of the miscellaneous fees might include a notary fee, a recording fee, and HOA fees (if you have an HOA). If you’re paying for any inspections and don’t want to pay them upfront, you can also include these under miscellaneous costs. Adding them as part of your closing costs can help you get a better picture as to how much you’re actually netting from the sale of your property.

Seller Closing Costs In California

In summary, when you sell a home in California, you will have closing costs that you will need to pay. It’s always best to understand what these costs are, and especially how much they are. The answers could help make a decision for your next step in life a bit easier.

If there’s one thing that to take away from this, it’s that real estate commission in California is negotiable. In my several years of experience in the industry, I can’t tell you how many homeowners I’ve talked to who thought that 6% was the standard real estate commission. The Commission is the highest dollar amount of a seller’s closing costs. As a real estate broker, I personally feel that this is way too high and is one of the reasons why I founded SoldNest.

It is the case that real estate search websites such as Zillow and Realtor.com are becoming the initial go-to sites for most buyers in their home search. What this means is that a real estate agent’s job of “marketing” a home has become a lot easier over the last 5 to 10 years.

The point is, you shouldn’t have to pay more than necessary without sacrificing top service.

An Important Resource For Sellers In California

There is a lot of work that goes into selling a property. Sometimes, it can be daunting when you are unsure of what it may mean for you financially. But the good news is that there are tools and resources available to you when selling your home.

Want to get an idea of much you might be paying for in terms of seller closing costs in California? Check out our free California seller closing costs calculator. You’ll be able to get a sense of how much your closing costs as a seller might be. This will allow you to begin preparing for the process of selling your home.

Understanding all of the fees involved in the final stages of your home sale before you even begin is one of many tips for selling your home. It is valuable to understand the ins and outs of every step of the way from the very beginning of selling your home to the end. This includes understanding seller closing costs in California.

If you’re thinking of selling your Silicon Valley home sometime soon and would like to work with a top agent who will provide better service at only a total of 2-3.5% real estate commission, then you can see more about SoldNest here. We’ll provide you with a thorough market analysis of your home without any obligation.

Why Use A Realtor ® When Selling Your Home?

Considering the question, should I use a real estate agent to sell my home? There are several reasons why it may be a really good idea.

Since it is theoretically possible to sell your home on your own, you may begin to ask yourself the question, “why use a Realtor ®?” Not doing so may seem tempting. You would after all be saving money that would otherwise go toward paying a commission fee. And you would have complete control over the selling process yourself.

But in reality, selling your home without the help of a professional could actually cost you more money in the long run.

Realtors ® bring years of experience selling houses. They know many tips and tricks that you may not be aware of, through no fault of your own. Not only that, but selling your home by yourself may turn out to be much more of a stress-fueled hassle than it’s worth.

In this article, we’ll explain the key reasons why you may want to think twice before deciding to forgo hiring an experienced Realtor ® to handle your home sale. We’re not saying that selling your home as a for sale by owner can’t be successful, but we’ll explain why using a Realtor to sell your home can do you more good than bad. Regardless of whether you choose to work with SoldNest for your home sale or not, this is advice that anyone selling their home now or in the future should know.

So, why use a Realtor ® when selling a home?

Buyers’ Agents May Not Show Their Clients Your Home

It may not seem fair, but it’s a reality that must be considered. For the Realtor ® on the buyer’s side, entering into a transaction in which they know that they won’t be working with another real estate professional can be a deterrent.

With other properties available that have listing agents working on the seller’s behalf, a buying Realtor ® may simply decide to skip your property in order to work with another agent.

This could happen even when a client has specifically expressed interest in your property. The buying agent may attempt to dissuade them from perusing it, knowing that it will be an added headache to close a sale directly with the seller themselves.

They may also be concerned about complications that crop up during closing. The seller may not have any real estate experience for what is inevitably a complicated process with a considerable amount of paperwork and legal considerations.

While there are some agents for home buyers’ who may proceed with showing clients your property, there are others who will only consider it in the event that no other inventory is available. There’s a stigma that the buyer’s agent may get slighted at the end of the day by not receiving a commission. This makes them less motivated to undertake showing your home to their clients.

Emotional Attachment Can Get in the Way

A home is a personal place. No matter what, you will most likely feel some form of emotional attachment to your property. But this could be a huge hindrance when it comes time to sell your property.

You may list your home for more than its worth. Your attachment to your home could sway your decisions around considering a lower counter offer. You might also feel a sense of desperation to sell if you’re on a tight timeframe. This means that you may give in too easily to the first offer that you are presented with without considering potential to others.

The majority of homeowners do not know the real market value of their home. Some may look at Zillow or some other online home valuation. While these sites can sometimes give you a good starting point on your home value, they rarely give you an accurate portrayal of your homes true value. Why? Because they don’t take into consideration certain features between your home and other homes that have sold close by.

Comparing Your Home To Others

There’s a lot that goes into setting the right list price for your home. What comparables are you using to compare your home to? Are you using similar homes with interior square footage, bedrooms, bathrooms, lot size, etc? What adjustments are you making between your home and the comparables? If your home is located in a desirable area on your street (maybe even a cul-de-sac) and a recent home that sold nearby is on a busy street, how much more value do you think your home should have? This is only one small example that should be taken into consideration when comparing your home to other similar properties that have recently sold nearby. Setting the right list price is crucial to selling your home for the highest amount in the shortest amount of time. Most of the time, only a good listing agent will know how to do this.

Staying Grounded

Working with a Realtor ® will allow you to keep your emotions at bay. This is because you’ll always have the opinion of an objective professional. Having an experienced advisor with you every step of the way will help make the process much smoother and less stressful.

To start with, a reliable and experienced listing agent will help you establish the right listing price for your home. They have no emotional investment in the property. This means that their decision will revolve entirely on market data and logic.

Following Up Without Appearing Desperate

It is easier for listing agents to follow up with buyers as well. When Realtors ® follow up with a buyer’s agent, it’s fairly normal. It is their job to be staying on top of the potential transaction.

But when a seller does the same thing, it can come across as being overly eager. It can also appear a bit desperate to make a sale. This can happen even if that’s not the case. Unfortunately, it can inadvertently signal to the buying agent that they may be able to get the property at a lower price.

From a more personal standpoint, if selling your property on your own, you will also need to prepare yourself to handle negative feedback as to why buyers are not keen on your property. As the homeowner, this could come across as hurtful. Maybe certain aspects of your house that are of sentimental value are complete turnoffs to people who come for a viewing. Are you sure you want to hear negative things about a personal space that you love?

Handling Feedback

By selling with a listing agent, any and all negative feedback filters through a third party. Your real estate agent will be able to pinpoint ways to extract positive action points from negative feedback, sans the sting. They will also know which feedback to actually pay attention to, and what to disregard.

A filter for feedback, your listing agent will be able to see things about your home that will help in the long run. An experienced and good real agent know what makes a home sell. They know the characteristics that are desirable for buyers in your area.

A Realtor ® can take a completely objective look at your home. They can figure out what you can improve before your first viewing or open house. They will pick up on things you otherwise might not have. This could be possibly because you didn’t notice, or maybe because you didn’t consider these aspects to be flaws.

A Full Time Job

When asking yourself the question “Should I use a Realtor ® to sell my house?” you also need to seriously ask yourself how much free time you actually have.

If you have a full time job, or otherwise noteworthy time commitment elsewhere, chances are you don’t have the hours in the day to effectively sell your home. This is because selling your home is a full time job in itself.

Since it’s the biggest financial transaction you’ll ever make, you will want to make sure it’s done properly. To do so requires a considerable amount of flexibility and time. This means being available at very short notice, and at almost all times during the day, evenings and weekends if there are buyers who want to see or discuss your place.

Letting a listing agent handle this will take a huge amount of potential stress off your plate.

An agent can provide a lockbox, meaning that your property can be viewed even while you are not there. And with a dedicated Realtor ® for whom getting people to view your home is their job, you will be able to ensure more eyes on your property.

The more eyes on your property, the greater the demand. The greater the demand, the greater the price you can charge for your home in the end.

A Listing Agent Has Industry Connections

Real estate agents also know other real estate agents. They know the industry, meaning that they have contacts that they can reach out to about your property that you simply would not have exposure to through listing your home on your own.

The Right Marketing

“Why should I use a listing agent,” you may ask yourself, “given that I can list my house online myself?”

Indeed, you may be able to list your home independently on real estate websites. But this is only step one of a much larger job. To get the maximum possible sales price for your home, marketing (and marketing to the right people) is key.

A customized digital marketing plan, created by a professional who knows the industry and your neighborhood, will allow you to sell your home for the highest possible value. Not only will they be able to help by creating a marketing plan, they should also know exactly what type of prospective buyer to target it toward. If you do use a listing agent when selling your home, make sure they are not just providing the standard MLS and online syndication.

Over 90% of buyers are searching for properties online. And almost every single of  one them has some type of social media account. Because of this, it’s imperative that your Realtor ® has a specific digital marketing plan. In other words, make sure they are spending the marketing dollars on the places that they should be (such as Facebook, Instagram, Google, YouTube) and not on marketing tactics that will help market their name in your neighborhood so that they can get the next listing. “Just listed” flyers is the perfect example of this. This does nothing to help sell your home, but does help market the agent in your neighborhood as being a “neighborhood expert”.

Targeting the Right Buyer

Being able to pinpoint your potential buyer will help minimize how many times you need to show your home. If you sell on your own, you run the risk of hosting many futile viewings that go nowhere.

It’s a lot of work to keep your house in top shape when potential buyers come to visit. The ideal situation is to only have to do this a couple of times.

An experienced listing agent who has already targeted the right demographic through online advertising will have filtered out people who are just browsing, and bring only serious buyers to your home. They will be able to understand what is important to these people when considering their future home, which saves you as the homeowner a lot of potential hassle.

From the buyer’s perspective, it’s a bit awkward to have a seller present when viewing a property. A buyer may be more likely to rush through your home if you are there at the time.

The Nitty Gritty

Once you have an offer, it’s all downhill from there, right? It’s not quite that straightforward.

What if you didn’t know how to tell if an offer was worthwhile? A listing agent will be able to help you figure out the difference between a good offer and one to pass on.

Not only that, but they will be with you during the negotiating process and are working in your best interests. They will be able to use their experience to negotiate the best possible price. They can also do so without becoming emotionally involved.

Full Disclosure

With every home sale comes an extraordinary amount of paperwork that is essential in order to close. One part of this is a full disclosure that clearly outlines any problems with your property. This is required by law, and is something that listing agents have experience with.

If a seller does not disclose everything, they run the risk of a lawsuit if something goes wrong later. Listing agents understand the implications of disclosure law. They will be able to help create your disclosure. After all, most of them know all of the things that it will need to include.

What if your listing agent makes a mistake in the process? (They are human too, so it’s not entirely impossible). But the good news is that protection exists. Listing agents have professional errors-and-omissions insurance to protect themselves. This means if problems do arise down the road, they can often resolve themselves without the seller’s involvement. This likely wouldn’t be the case if you sold your property alone.

Still Wondering, “Why Use a Realtor ®?

The biggest financial transaction of your life is certainly an important decision to weigh all the possible options for. Moving on its own is already one of the most stressful events in a person’s life. And that’s without the pressure of being the person also responsible for selling your home.

And what about money? It may be tempting to save some money along the way that may have otherwise gone into a Realtor ®’s commission.

But what if it were possible to hire a highly qualified agent who knows precisely how to market your home to the right audience, and still save you some money?

The Best of Both Worlds

With SoldNest, it is possible. We charge just 4% in commission to our clients, substantially lower than the standard 6%. Our percentage is made up of 1.5% of the listing fee, and 2.5% that goes to the buyer’s agent.

For a considerably lower commission, you will get full service Realtor ® who will create a customized digital marketing plan for your home. They will be with you every step of the way, answering any and all questions you have at any time.

Regardless of where you stand on the question “Why use a Realtor ®?” it is important to make sure that you don’t do a disservice to this important financial decision. For more advice, or even a quick chat, feel free to contact us.

What Is An Escrow Company And What Do They Do?

Understanding what an escrow company is will be an important part of any real estate transaction

Learning what is an escrow company and what they do likely won’t be the first thing that comes to mind for a homeowner selling their home. From putting the property on the market to considering their next move, there are many aspects of selling one’s property that may take center stage. Despite this, however, understanding what an escrow company is and what they do for both sellers and buyers is a pivotal aspect of the property selling process.

Defining ‘Escrow’

There are two things that ‘escrow’ can technically mean. The first, and what this article refers to when evaluating what is an escrow company, is a third party organization in a real estate transaction. The escrow company handles the financial exchange between the buyer and seller, and distributes money as instructed.

The second definition of ‘escrow’ is in relation to an escrow account. It’s an account in which a homeowner may have their property taxes and insurance payments included in their mortgage payment. In this case, the lender will ensure that property taxes will be paid to the local county on behalf of the homeowner every six months. They will also make sure that insurance payments are paid to the insurance provider. This post will focus on the first of the two definitions and answer the questions: what is an escrow company, and what do they do for homebuyers and sellers?

A homeowner will always have closing costs to pay in the final stages of selling their home. The greatest of these expenses is the real estate commission to both the listing agent and the buyer’s agent. But there are additional things to consider. Other costs include city and county transfer tax, title insurance, a few smaller, miscellaneous fees such as recording and wiring fees, and of course, escrow fees.

What are Closing Costs?

What exactly are all of these other various closing costs that a seller will need to pay? County transfer tax refers to the tax charged by a county when real estate is sold and transfers to another owner. The amount of this tax that a seller will pay depends on location. In Santa Clara County, (the majority of Silicon Valley), the tax rate is $1.10 for every $1,000 of the sales price. In San Francisco County, the tax ranges from $6.80 to $7.50 per every $1,000 of the sales price.

City transfer tax, on the other hand, is a similar tax that homeowners pay to the city (rather than the county) where the property is. It is not in effect everywhere. San Jose, Mountain View and Palo Alto all have a city tax. The other cities in the Silicon Valley area (as well as San Francisco) do not.

Title insurance protects the parties involved in a real estate transaction from financial loss due to defects from title. The specifics vary by country. In Santa Clara, the seller pays for the buyer’s title insurance policy while the buyer pays for the lender’s policy. Through this distribution, all parties will have protection from any potential loss in the transfer of property from the seller to the buyer.

From the buyer’s perspective, there are many fees that they will need to consider. These include lender fees, third party fees, pre-paid items and any necessary interest rate adjustments. They also include escrow fees.

What is an Escrow Company?

With all of these various fees and costs, where does an escrow company come into all of this? Simply put, escrow is the transfer of funds or a deed from one party to another after an agreed upon event has been completed or particular condition has been met.

Buyers and sellers will want to know that no funds will be transferred or deposited until all of their respective terms have been met. For all of the previously mentioned transactions involved in the closing, a third party escrow officer will be assigned to handle the transfer of large sums of money from one party to another. This will happen only upon meeting all of the pre-determined conditions.

Escrow is essentially a neutral party involved at the end of a real estate transaction. They are responsible for making sure that neither the buyer nor the seller receives a property or payment respectively until everything they previously agreed upon has been done. An escrow company will also ensure the satisfaction of all requirements of both parties, as well as the mortgage company. They protect the buyer by making sure the property is fit for transferral from one owner to the next. Similarly, they protect the seller by ensuring that they will receive payment for the property as promised.

Typically, the selling agent will open escrow with a company of their choice. The escrow company acts as the neutral party handling the financial transfer. They are also responsible for ensuring that all necessary paperwork is complete. An escrow company will also be in charge of reviewing all conditions for the monetary transfer to take place. They handle funds, loan documents and wires, and follow the instructions indicated in the real estate purchase contract.

What Needs to Happen Before Closing a Sale?

But what kind of conditions apply for the transfer of funds to take place? These will vary between each real estate transaction. They may include the finalizing of any previously agreed upon repairs or upgrades to the property. Another typical condition is the successful completion of a home inspection. The buyer passing approval for financing is can be a condition as well. The specifics of each set of conditions will likely be different depending on the transaction. Regardless, the funds and property deed will remain in escrow until the approval of all conditions. In the event that something goes wrong, the escrow officer can ensure termination of the agreement.

Escrow Companies vs. Title Companies

What is an escrow company? The role of an escrow company is separate to that of a title company. A title company handles the transfer from a legal perspective. They ensure that all rights and interests of a property are in line to proceed with the transfer. The role of a title company is to ensure that legally, the property may transfer from one person to another. They must do a thorough check to ensure that there is nothing to prevent this transfer from happening. Any mistakes or misinterpretations in legal documents, false ownership of the property, or previously unknown family members of the seller who may in fact have some form of entitlement to a share could all prohibit a real estate transaction from proceeding.

Individual regions maintain different practices for escrow and title companies, as well as their interaction. For example, in northern California most escrow companies handle both escrow and title tasks. In southern California, escrow and title tasks are separate.

Who Decides Escrow Fees?

Individual states do not regulate escrow fees. These fees will vary depending on the costs of producing the service, any potential liability and possible overhead expenses that may involve a profit factor.  The escrow officer can provide a closing cost estimate at the beginning of the transaction to both the buyer and the seller. This will show the seller how much their approximate net proceeds would be, as well as what they could expect to pay with regards to escrow fees. An escrow company does not have control over the costs of other aspects of the closing process such as title insurance or any changes on behalf of the lender.

Working With an Escrow Agent

The escrow officer’s role is not to provide any kind of advice to either party. They can objectively discuss the instructions for the closing to take place. They must remain completely neutral. The escrow officer cannot advise either buyers or sellers as to whether or not they are making the ‘right’ decision. They also can’t discuss whether either party is or getting a ‘good’ deal from the transaction. Anything to do with legal matters is a discussion that should take place with an attorney, not an escrow agent.

Closing the Sale

The signing of final documents between a buyer and seller will take place at an escrow company. A notary will typically be present. In the instance of an all cash deal, a notary is not a requirement. With all conditions complete, the transfer of the funds and deed between the buyer and seller will proceed. This is typically referred to as the closing date, and takes place several weeks after a formal offer.

Understanding what is an escrow company provides clarity on a critical part of the closing process. Escrow companies ensure that the entire transferal of property and funds from one owner to the next is fair, timely and in line with the conditions of both parties. A neutral middleman, an escrow company will make the final and important stages of buying or selling a home safe and secure for individuals on both sides of the transaction. Learning what is an escrow company early on in the selling process will prepare homeowners for what they can expect when closing.

Two Things Your Listing Agent Must Do When Selling Your Home

An agent reviews a listing with clients

Many homeowners are unaware of what their listing agent should do, and shouldn’t, when it comes to selling their home. Any property sale is undeniably a process involving many steps. But there are two pivotal things that can make or break the final price of your property. And not every listing agent is doing them correctly.

A big decision

Selling a home is a significant transaction in most people’s lives. It’s something that they will typically only ever do twice or maybe three times. As a result, home sellers generally have little experience or exposure to the process. Many simply assume that the agent they hire is doing the right thing. This is especially the case if the listing agent is thought of as the local ‘neighborhood specialist,’ with years of seemingly unquestionable experience in the industry and the area.

Unfortunately, in many cases, this couldn’t be further from the truth. This post outlines in detail the two most important things that you should understand when selling your home. It will explain what your listing agent should and shouldn’t do when it comes to both of them.

#1: SET THE RIGHT LIST PRICE

What Your Listing Agent Should Do

Often, the suggested list price of the home being sold is discussed during the initial meeting between the homeowner and the listing agent. Many homeowners have a rough idea as to what their home may be worth. But it’s imperative to get an opinion of a professional in the field. A good listing agent will be realistic with their clients and will avoid the temptation to over promise in order to secure the listing. Most listing agents will provide you with a CMA. (This is also known as a comparative market analysis). They should be able to justify and explain exactly how they arrived at their suggested list price for your property.

A CMA will usually show other properties that have sold recently in the neighborhood. For single family residences in most suburban neighborhoods, it is important to make sure that the recent sales that are noted in the CMA are within a half mile radius at most, and are not more than four to six months old. The closer the property and the more recent the sale, the better. It’s also a good idea to view other listings that are currently active, as a change in the market can happen quickly. You may know someone that sold in your area relatively recently, but it’s entirely possible that a change could have happened between that point and the point at which you decide to sell your own house. 

The importance of square footage

After comparing homes that are close by and have been sold most recently, make sure that your listing agent is also comparing your home to others with a similar square footage. This comparison is essential. Despite being a common reference point for overall size, how many bathrooms or bedrooms a home has is irrelevant. But why? Let’s say that the average home in your neighborhood has 4 bedrooms and 2 bathrooms. It’s 2,000 square feet in size. Let’s also say that your home falls into this category. This means a home that recently sold in your neighborhood that has 5 bedrooms, 3 bathrooms, and is 3,200 square feet is not an accurate comparison point. Most of the time, a larger sized home will sell for much less per square foot.

It is equally important not to go the other way, and use a 3 bedroom, 2 bathroom, 1,200 square foot home as a comparable – a smaller home of this size will usually sell for a much higher price per square foot. The bottom line: make sure that before establishing your listing price, your agent is comparing homes of a similar size in square feet to the one you are selling.

Making the right comparisons

When reviewing what has recently sold in your neighborhood, it is pivotal to ensure that your listing agent is comparing apples to apples. They should be able to explain any and all recent sales, outline currently active listings in your neighborhood, as well as be able to explain the current market in your neighborhood and give you an informed, data backed suggestion for a list price that will make your home attractive to potential buyers. While there are other aspects, such as the condition of your home compared to others, where your home is located on the street, schools in your area compared to those near recently sold homes, etc., the first and most essential contributing factor to determining the listing price of a home is its interior square footage.

Your listing agent should also explain that the list price is used as a marketing strategy, and is not the same thing as the potential selling price. Depending on the market, the sales price can exceed the list price if it has been determined strategically. With sites like Zillow, Trulia, and Redfin providing data and currently listed homes for sale, buyers are doing much more legwork and independent research than even ten years ago.

Days on market

DOM, or “Days on Market”, is another critical number to bear in mind when selling your home. The longer your home stays on the market, the more leverage you lose and the more the buyer gains, as people begin to question if something is wrong with a property that has been listed for a long period of time without having sold. This is why overpricing your home in the beginning can end up costing you much more in the long run.

What Your Listing Agent Shouldn’t Do

The first major real estate agent faux pas is to over promise in order to secure the listing. Unfortunately this happens all the time, and there are a lot of agents who are unaware and sometimes even unethical when it comes to this. Often, they will tell you exactly what you want to hear, so that you’ll sign the listing contract with them – all the while, knowing that there is a good chance that your house will not sell for that much and that you’ll eventually have to drop the list price. But guess what? The unfortunate thing is that at the end of the day, the agent still gets paid – and the only one missing out is you.

Just this week, I had a meeting that exemplifies this. I met with a homeowner about potentially selling their home, located in Almaden Valley in San Jose. I put together a CMA, citing two good recent sales that we could use as comparisons. One of these recent sales started off with a ridiculous list price. The home had 4 bedrooms, 3 bathrooms, and was almost 3,300 square feet, which is only slightly above average for this neighborhood. The average sales price for homes in the area that are of this square footage over the last few months have been anywhere from $1,700,000 to $1,925,000. The starting list price for this one? A whopping $2,195,000!

The problem with overpricing

There was nothing about this home to justify this starting list price. In some cases, there might be a rare view, extravagant upgrades, or another exceptional characteristic of the property that could potentially justify a bump above what has recently sold. In this case, there was nothing. This listing started off at an extremely high price of $667 per square foot. The property sat on the market for three whole months. The price was reduced three times before the home finally sold at market value ($1,767,500, or, $536 per square foot).

This home in Almaden Valley was clearly overpriced by the listing agent

If this home had been originally priced at $1,749,000 (or even $1,799,000), there’s a strong chance that it would have sold within the first few weeks of being on market, and for a higher price. Because of the emergence and subsequent proliferation of property search websites, many buyers are extremely savvy when looking for a home in the neighborhood they’re interested in before they even attend their first open house. If these well informed buyers see a listing for a house that they know is overpriced, they likely won’t even come for a visit, let alone put in an offer.

The outcome

So, what about the listing agent who sold the home in the example I gave? Whether or not she was adamant regarding the starting list price, we’ll never know. Sometimes sellers think their house is worth much more than it is. They may want to list it at an unrealistic price despite being advised otherwise. Regardless, this listing agent did a huge disservice to her client by listing their home at such an inflated price. If the property had been listed at a much more reasonable price, the seller would have had a higher chance of netting more money from the sale.

But what about the buyer? Who represented them? In this case, the listing agent did. The seller potentially ended up losing tens of thousands of dollars, but it appears as though the listing agent received a brokerage commission check of about $88,000.

#2: MARKET THE PROPERTY THE RIGHT WAY

What Your Listing Agent Should Do

This next point is critical. Real estate prices fluctuate according to supply and demand. Your agent can help control the demand. It may sound like a lofty ambition, but this is actually part of their job. They should know exactly how to attract the greatest number of buyers to your home. If they can do this, you’ll have a higher chance of selling for the greatest amount of money. The more potential buyers that see your home, the more likely it is that more buyers will be interested in writing an offer. Subsequently, the more potential buyers that are interested in writing an offer, the better chance that one of them will offer a higher dollar amount – because they will recognize that the demand for your property is high.

Priorities

So, what should your agent be doing when it comes to marketing? First and foremost, they should be advertising where your potential buyers are. Unfortunately, a lot of agents aren’t doing this. I believe this is a huge problem, and is actually one of the reasons why I founded SoldNest. Many agents and brokers are uneducated when it comes to marketing. I do think that over time, the brokerage industry will better equip itself with the marketing expertise needed to effectively sell a home.

Unlike the real estate markets of decades past, today’s home buyers are doing a great deal of research and property searching on their own. They do this through websites and applications such as Redfin, Zillow, and Trulia. These real estate search sites in turn get their data and listings from each local MLS database.

The truth about creating a property listing

I’m going to let you in on a little secret. I know this from personal experience working in the industry. It takes just 20-30 minutes to upload a property’s information to the MLS database. That’s it. And once we press submit, the information and photos automatically syndicate to most of the property search sites. Some agents will paint the picture that they’re doing some of this work – creating individual and unique listings on each and every site – but more often than not, they are doing nothing apart from the uploading of the property details to the MLS database. Everything else is automatic.

How can you make sure that your listing agent is putting in the best effort into selling your home? First off, your agent should know who your potential buyer is. “Someone looking to buy a home in the neighborhood” doesn’t cut it. Are they newlyweds?  A family with young kids looking for good schools?  A bachelor, or maybe an executive? Whoever your potential buyer might be, it’s incredibly advantageous for your agent to know this so that they can properly market your home to that type of person. While it’s true that your buyer could be anyone, it is also true that if the bulk of the advertising is focused on the target demographics, the demand for your property can be substantially higher.

Spending marketing dollars the right way

Once they have the potential target audience established, your real estate agent can spend marketing dollars in the right places. Without question, the best way to reach your maximum audience is through digital marketing. There are numerous platforms for this, but the three biggest ones are Facebook, Instagram, and Google. Facebook and Instagram have very specific settings for who will see the ad for your property. You can narrow down your audience by a few factors. These include age, type of employment, interests, if the user is looking to move soon, and more. Facebook and Instagram track everything about their users. While it may sound Orwellian, this tracking isn’t necessarily a bad thing – many users actually would like to see advertisements for products or services that they may find useful, as opposed to ads for something they have no interest in.

What I love about Google

Google is one of my favorite platforms to advertise on. Hopefully your agent has a dedicated, mobile friendly website for your home. If they do, Google ads can be highly effective. Google allows advertisers to have their ads show up when a user types in certain search terms. (These are also known as keywords.) For example, when we list a home, we input over 110 search terms that our ad shows up on if typed into the platform. It’s imperative to think about of what types of terms a buyer might use when looking for a property. The most popular search terms are “city/neighborhood homes for sale”, “city/neighborhood real estate”, “homes for sale in city/neighborhood.” It’s important to understand this, seeing as 92% of buyers now search for homes online.

While some buyers will default to real estate search sites, many of them will go to Google and type in specific search terms in their desired city or neighborhood. This is a tremendous opportunity to separate your home from the competition, since when you sell your home, you may have other neighbors that are also selling theirs.

How Google can help sell your home

If your agent knows how to place ads on Google and can have your ad show at the top of the search results, this is a great opportunity for your home to stand out from the others on Zillow, Redfin, and other similar sites. When the user clicks on your ad, they then go to the website for your property. Be sure to ask your agent if they have experience with placing ads on Google and whether they are Google AdWords certified, as truth be told, I still haven’t met an agent who does this for their listings.

Here’s an example of one of our ads for a home that just recently sold in West San Jose. Along with our other advertising platforms, the Google ads helped us receive four offers within four days, and allowed us to break a record for the highest priced home ever sold in the 95130 zip code.

A Realtor using Google Ads will allow you to get more eyes on your listing

The listing itself

Besides advertising, professional photos and a well-written property description are critical.  No matter what, your agent absolutely must hire a professional photographer to take pictures of your home. Believe it or not, some agents take photos from their phone and use them on the listing. This blows my mind.  When 92% of buyers search for properties online, the first thing that they want to see are the pictures. You only have a few seconds to grab their attention to have them keep scrolling. Generally, if the pictures appeal to them, they will take a look at the property description.

In the process of uploading the info about the home we are selling on the MLS, real estate agents also create a property description. Along with the photos and property characteristics, this property description is populated to all of the search sites. It has got to be intriguing. Your agent should be selling the property for the highest possible price, and doing this starts by creating excitement for buyers. Viewing the home through professional photos and an effectively written description is how to first pique their interest. 

What Your Listing Agent Shouldn’t Do

Never, ever should any real estate agent market themselves ahead of the listing. The reality, however, is that this happens all the time – especially with agents that you may be familiar with.

How does this happen? Previously I mentioned how most buyers search online first, and that’s where your agent should advertise your property. There is no one who can tell me otherwise. It’s common sense. If we know that most buyers search online, have a Facebook and/or Instagram account, and use Google as their search engine, then logically these places are where your home’s advertising should be.

Understanding the audience

Buyers aren’t looking for their future home in the local neighborhood newspaper or magazine anymore. Why would they? In the time a monthly publication is refreshed in newsstands, five more properties may be listed in their area online.  So who is reading the neighborhood newspaper or magazine? Homeowners – not prospective buyers.

Branding gone wrong

You will see a lot of the ‘neighborhood listing agents’ advertise a home they’re selling in their local newspaper or magazine. They do this to market themselves as an agent – not your listing. A critical aspect of marketing and advertising is knowing who your target audience is. Marketing strategically to them rather than the general public is key. Buyers are not looking for their future home in your local newspaper. The chances that the potential buyer of your home is currently living in the same neighborhood they’re looking in is extremely low. If an agent tells you that they’re going to place an ad for your home in the local newspaper or magazine, press them for alternative options. Tell them you’d rather have the money spent on digital marketing in places where buyers are actually searching.

A real estate agent should be listing properties digitally and not relying on traditional print media

Many of the same listing agents have been advertising in newspapers and magazines for years. They want to keep placing ads in the same paper so that homeowners in the area keep seeing their name.  These agents are effectively branding themselves. When it comes time for one of these homeowners to sell, they are more likely to give them a call over another unknown agent. Many agents have made a lot of money by using this approach and marketing themselves. The chances of it actually helping you sell your home are extremely low.

Property descriptions matter

These next two things I’m going to discuss might seem like common sense. But it’s amazing how often agents overlook them. When your listing agent is writing your property description, make sure they write a detailed and compelling overview of the property. It needs to catch your attention. I have come across countless poorly written property descriptions during my years in the industry. 

Here’s a perfect example, which is in fact one of the worst. Not only does this not spark excitement or intrigue about the property, but this listing agent is actually making it very clear that they will sell for less than the list price. This is completely counterintuitive to what a property description should be doing. Your agent’s job is to drive demand and negotiate the highest possible price. This example represents the complete opposite of what your agent should do when listing your property.

The description a Realtor writes when your home is for sale is critical

Having your home on the MLS and creating effective advertising will bring maximum exposure. Any agent who tries to tell you otherwise likely does not have your best interests at heart. Only in rare cases does it make sense to not list the home on the MLS or minimize the exposure. (For example, for security reasons in the cases of a celebrity homeowner or extreme luxury property).

Driving demand

 Your agent’s job is to drive demand, and I cannot emphasize that enough. The MLS is the central hub where the agents of prospective buyers look for new listings, where buyers view homes. More importantly, it is the source of data for all of the real estate search sites. In some cases a homeowner may not want their home advertised for whatever reason. But often, in these cases, the agent usually hasn’t properly explained the benefit of effective advertising.

But usually there’s only one reason an agent will try and keep the property off the MLS and keep the advertising to a minimum. That is so that they receive double the commission. If the advertising is minimal, they have a better chance of reaching buyers without agents. The problem is that your property has much less exposure, which usually means much less demand. The lower the demand, the less likely you are to sell at the highest possible price.

Why targeting is critical

The better targeted the advertising, the higher the chance that you net more from the sale of your home. Here’s an example of an agent who is actually sending out postcards about not advertising a seller’s home. While I understand the approach with the holiday season coming up, not advertising the property is a huge disservice to any seller. When selling your home, it is important to understand the significance of maximum exposure and more importantly, to make sure that your home reaches the right target audience.

Spending money on digital advertising for your listing should be a priority for your agent

Work closely with your listing agent

It’s easy to simply trust your local listing agent to do the right thing when selling your home. In an ideal situation, they will, but the reality, unfortunately, is that many do not. Setting the right listing price and marketing your property the right way are the two most important things that you can do to generate the maximum final price for your home. These are things that your real estate agent should be able to do for you at no extra cost. Follow up with and work closely with your agent to make sure that your home sale reaches its fullest potential. By understanding the implications of these two pivotal steps of the process, you will be able to make better decisions regarding your home sale – and make sure that your real estate agent does too.

If you’re thinking of selling your home in the near future and would like a customized marketing plan to ensure you net the highest demand, enter an address, answer a few questions about your home, and we’ll be in touch shortly – with better marketing and only a 1.5% listing fee.