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DIY - Selling Procedures to Know

KNOW THE MARKET

The Florida real estate market is unique and robust. While the real estate market may have begun to level off in other parts of the country, Florida remains a seller's market. The influx of

people moving to Florida and homeowner's cashing in on their unexpected gain in equity, are

finally able to move on to the next stage of their life.


What does that mean? A Seller’s Market? It means that there are not enough homes for sale to satisfy the consumer demand, (the desire or need), causing a shortage of homes available, and consequently the sales price goes up. The buyer’s must “out-bid” one another, in a bidding competition, or bidding war as they are sometimes known. This causes home prices to increase quickly, and dramatically.


HIRE A REAL ESTATE ATTORNEY

Consulting an attorney is highly recommended, especially if you are not using a real estate agent. However, it should be noted, a real estate agent is never a replacement for an attorney. It is advisable to consult an attorney for any transaction of this magnitude, and complexity. In some states, an attorney is mandatory in all real estate transactions.


PRE-APPROVAL WITH MORTGAGE LENDER

Find a banker you are comfortable with or get a recommendation from a Realtor. Ask them to

do pre-approvals on buyers that come through your house. Ask buyers to enter their information in the Sign-In sheet before you show them the home. At the same time let them know a pre-approved letter by a lender must accompany all offers. Let them know this is a contingency that must accompany any offer they may present. The seller may notify the Buyer should they wish to continue to show their home until the buyer's loan is approved, or not approved and therefore little time as been wasted.


COMPARATIVE MARKET ANALYSIS (CMA)

Realtors prepare a Comparative Market Analysis for their clients. This involves a thorough study of the recently sold and active listings of homes in the community most like their client’s home. An examination of the pictures is helpful to determine how the property compares to others being sold at this time, the competition. This analysis should also include examining the county property appraiser's site for any sales not on the MLS (Multiple Listing Service).


PRICING YOUR HOME - DON'T OVERPRICE!

Naturally, homeowner's want to gain the most equity possible from the sale of their home, while taking care not to overprice the home. Overpricing will have some very real and negative consequences. Overpriced homes typically stay on the market longer, and when the homeowner finally accepts that they must lower the price, buyers will now wonder and believe there is something wrong with the house. Some buyers may even avoid looking at the home altogether, while the buyer's that do make an offer, often offer 15% - 20% less than even the newly lowered price. Still other buyers won't make an offer at all because they don't want to insult the seller by giving a low-ball offer. On the flip side, DON'T UNDERPRICE! Ironically, the same thing happens!


SELLER PRE-INSPECTION

The condition of the home compared with other similar homes is another indication of where and how to price your home. The buyer will have the right to an inspection, and they may ask for a reduction in price, or some other concession for defects noted on their inspection report. Therefore, I recommend the seller have their own inspection prior to pricing, to be aware of any defects that may come up and cause an unnecessary, adverse effect on the price.


PRE-INSPECTION REPAIRS

The minor repairs should be corrected, however the seller may also note the necessary repairs and let any prospective buyers know well in advance, that the price has been adjusted accordingly. I do not recommend this approach. Or Sellers can offer the buyer a credit for said repairs by offering to pay for some amount of the closing costs. Buyers with a limited amount of cash after their down-payment will love this! And, the Buyer will have a choice where and how to spend the money. If the Buyer is financing the purchase, the bank will order an appraisal of the property. Again, I suggest to the seller, they get an appraisal themselves from a reputable company, before coming to a firm price decision. In this market, seller's may be pleasantly surprised by the appraisal. In any case, it will add confidence when deciding on the best price to sell the home. In addition, a seller's appraisal is an excellent negotiating tool, and should help with the buyer's confidence in their offer.


BUYER'S INSPECTION PHASE

The buyer has a right to order inspections, whether he is required to do so, during a certain period to complete any chosen due diligence inspections, usually within 7 - 10 days. While inspections are not required, for a cash sale for instance, should the buyer wish to pass on the inspection. However, a buyer’s lender will most certainly require a basic home inspection,

including a termite inspection, and a 4-point, wind mitigation inspection (in South Florida). The 4-point mitigation inspection is an additional charge and covers the roof inspection, including the strapping at the roof-truss, garage and other outside doors, windows and/or shutters. The buyer has a right to these necessary inspections, whether the contract is, As-Is, or not.


MANDATORY FULL DISCLOSURE STATEMENT

Florida State laws require mandatory full disclosure by the Owner to the Buyer, with some exceptions, making known any facts or conditions which may adversely affect the value, or the desirability of the property. So, if the rug covers an unsightly stain, the buyer should be made aware of what is underneath the rug. Additionally, should the property inspection fail to reveal a known deficiency, it is still the owner's responsibility to disclose. Err on the safe side. It is much better to over-disclose than under-disclose. The owner's failure to disclose may very well lead to costly legal problems. It should be noted that major items, such as the age and/or condition of the roof, and defective structural components can effectively negate some mortgage loan approvals.


SHOWING YOUR HOME

Buyers want to be able to comfortably view your home and be able to openly communicate without judgement. This is one way we go about resolving objections. Many like to work their objections out aloud, with a partner to get important input. Without the freedom to go through

this process, the buyer is left with a less than optimal experience. We want potential buyers to have a great experience! Treat them like Royalty! A Realtor should be present when showing the property to potential buyers and their agents. The Realtor will be there to represent you and answer any questions the buyer or their agent may have. This lets the buyer and their agent comfortably view the home, providing a more private showing experience as well as providing valuable feedback.


SELLER’S NET SHEET

A Net Sheet will be provided, showing an estimate of the costs involved in selling a property, and a fair estimate of the profit to expect at closing. Some of these costs include an appraisal, title search, doc stamps, and closing costs. However, there may be other costs incurred, such as inspections, repairs, and attorney fees.


BUYER’S GOOD FAITH ESTIMATE

Buyers will receive a Good Faith Estimate of closing costs, within three days of submitting your loan application. The estimate is based on the loan officer’s prior experience, and is required to be within a reasonable range, so you’re not astonished when you arrive at the closing table. We’ll be happy to go through the GFE with you, answering your questions you may have. It is always a good idea to go over these, before closing with someone knowledgeable in title closings. South Florida Title Agency is our agency of choice.

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