You’re ready to sell your luxury home and the first question that may cross your mind is “How much is my property worth?” Your listing price depends on the following five factors:
- Current housing market
- External obsolesence
- Showing challanges
- Condition of the house
- Who your listing agent is
Of these five factors, you have control over the last three. The most crucial decision you can make is selecting the right real estate agent to list your home because your agent should be able to help you manage and coordinate the majorit of these challanges.
Our real estate agents will help you navigate the housing market and help you prepare in getting your house ready. Of course, you may also want to keep the following in mind when selecting the right agent for you.
- The agent’s experience and track record – Has the agent represented many sellers and successfully sold their homes? How long before these homes sell and for how much, relative to the current market?
- The listing strategy – Does the agent have a detailed plan? How effective does it seem? Is it a general approach or a property-specific approach? Can this agent recommend a reputable contractor, handyman, stager, and even a cleaner? Will the agent oversee the improvement projects of your house?
- The agent’s connections – Does this agent have a good reputation among his or her peers? Can this agent reach out to the community and start marketing your home before it gets put on the Multiple Listing Service (MLS)?
- Image and professionalism – Do you want this agent to represent you in front of other agents and prospective buyers? Do you want your house to be perceived based on the impression this agent makes on people?
Once you’ve decided to list your home, the next step is signing a listing agreement. The listing agreement commits you to an exclusive arrangement with the agent for a set period of time. The typical time period is three months, but in sluggish housing markets or in the luxury home market, six-month or one-year agreements are more common.
When signing the listing agreement, or shortly thereafter, your agent will assist you in fulfilling your disclosure obligations (as mandated in California) by having you answer a series of forms and questionnaires. Your agent will also order reports on your behalf:
- Property Inspection Report (if desired)– A licensed property inspector will go over your home’s structure and systems to check for functionality, operability and code compliance. A written report will be issued based on the inspector’s findings, detailing basic information and recommendations for repair, replacement, or maintenance.
- Pest Inspection Report – A licensed pest inspector will check your home for termite or other pest infestation that could affect your home, as well as dry rot, wet rot, and fungus damage. If any of these are found, recommendations and estimates are then provided in a written report.
These reports are part of the buyer’s due diligence process, and the inspections could be performed by the buyers at their own costs. However, it is highly recommended that you have the inspections done before marketing your house to best anticipate problems, determine list price, and minimize buyer issues that could cause them to back out of the purchase.
Knowing where the housing market is heading is critical when pricing your home. Market conditions vary, based on everything from supply-demand issues to buyers’ attitudes. In addition, the market is seasonal, especially in California where schools tend to be the primary reason for housing decisions.
- During late winter to early spring (late January to late February) the housing market starts to warm up, as families recover from the holidays and start looking to make a move.
- Spring to early summer (March to May) is generally the best time to sell your home as parents need to buy within particular school districts in anticipation for enrollment in the next school year.
- Summer (June to August) tends to see a slow down as people leave town for vacation trips.
- Late summer to early fall (September to October) usually has a bit of a spike in sales activity as people come back from vacation and want to get into a home by the year’s end.
- Once the winter holidays kick in, and the market settles in for the winter (November to January), the only buying most people consider are holiday gifts. While your competition is whittled down because other sellers do not want to deal with moving during the holidays, prices tend to be a little lower as buyers during this time are usually looking for a relative bargain.
This seasonal pattern should be taken in conjunction with current market indicators in determining your pricing strategy. Your property will generate the most interest when it first hits the market, and if it’s priced below or at market value, it will generate the most showings. Start too high and you may miss the excitement and have to drop the price later, causing it to sell below market value.
Homeowners sometimes forget that when you are selling your home, you are, in fact, actually SELLING A PRODUCT. As with a car, a shampoo, or a dress, selling your house means highlighting the best parts of it and presenting it in the best possible way. Fully preparing your home for sale can make a considerable difference in the time it takes to sell it. You can help eliminate buyer objections before they arise by making necessary repairs and improvements. It could be as simple as removing clutter, personalized decorations, and having the house professionally cleaned, or it could be as drastic as repainting your entire house. If the house is vacant or has odd rooms or a less-than-ideal layout, an interior decorator or stager should be hired to bring in the right furniture and accents.
Once the house is adequately prepared to accentuate its most attractive features, your agent puts together professionally photographed, produced and printed marketing materials. Your house is then included in the MLS and should receive additional exposure from online and print ads. Showings are made during open houses and by appointment
If an interested buyer is serious enough, he or she puts together a purchase offer with his or her agent. The buyer’s agent then presents the offer to the listing (your) agent. Rarely does an offer get accepted as presented. There are usually terms that need to be revised, and this is addressed through the counteroffer process.
Should there be more than one interested buyer, there could be a multiple offer situation. A deadline should be set to hear offer presentations in this scenario. Agents in the Peninsula are generally familiar with multiple offer situations and will be comfortable presenting their client’s offer at an appointed time. In some occasions, given the bidding context, one party will exceed the others in amount and terms and will immediately be accepted by the seller. In others, the seller will have the option of counteroffering the highest offers or all of the offers.
Your agent should thoroughly explain to you this process and discuss with you the best negotiation strategy.
Upon ratification of the purchase contract, the escrow process begins. Escrow generally refers to money held by a neutral third-party on behalf of the transacting parties. Parties choose escrow to give them the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. The escrow holder has the obligation to safeguard the funds and/or documents that are in its possession, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.
During this process, the important timelines related to contingencies in the contract are as followed:
- Buyer’s deposit is given to the escrow company
- Additional inspections, if any, are performed
- An appraisal is performed if there is a loan involved
- If there is a loan, the buyer goes through the lender’s approval and underwriting process
- If your property is a condo or townhouse, the homeowner’s association provides a package of HOA documents and transfer paperwork
Once contingencies are removed, the escrow company contacts your mortgage holder and any other lien holder to request a pay-off amount. The escrow company then prepares the settlement statement detailing your pay-off and other closing-related expenses for your review. You will then meet with the escrow officer to sign the deed transfer and other documents, while the buyer meets separately to sign their loan and closing documents.
After the buyer signs off on the loan documents, the escrow company sends them back to the lender for final review and funding. Once escrow receives all the funds from both buyer and lender, the sale is recorded with the county and your ownership has been conveyed to the buyer. That day, all keys and garage door remote controls need to be turned over, and the house should be cleaned out and ready for the buyer.