When a home is made available to the marketplace, there are six factors that will determine whether it will or will not sell. They are the asking price, the financing available to potential buyers, the condition of the home, its location, the marketing tools put in place to attract buyers and the market conditions in the area where the home is being sold. For a home to sell with the fewest inconveniences and for the best possible price, the majority of the above six factors must be in an advantageous position with regard to comparable properties available. If a home does not sell, the fault will lie with one or more of these six factors. In summary, these six determining factors are:
Price, Terms, Condition, Location, Marketing, Market Conditions
When a homeowner makes the decision to sell a home, their goal is, of course, to do so with the fewest inconveniences and for the best possible price. To accomplish this goal, the homeowner should divide the process into eight phases. They are preparation, pricing, financing, marketing, display, contract, transaction closing and possession coordination. Over the next few days, the discussion will offer guidelines and helpful hints in each of these eight phases.
Today, we'll focus on Preparation and Financing:
PREPARATION
1) Research: Selling a home should not be a process of experiencing first and learning later. Remember, experience is a tough teacher, first you get the test, and then you get the lesson. For most of us, a home is our most valuable asset. Selling that asset should not be taken lightly. Take the time to learn the intricate, and often confusing, details of selling a home. Study the subject by reading books, exploring the Internet and attending seminars.
2) Schedule events: Take a few hours to put together a marketing plan. Decide what activities you will implement to expose your home to as many buyers as possible, and plan those activities on a calendar of events. Schedule open houses, advertising, direct marketing mailers, handouts, showing times, etc. Create an action plan and follow your plan.
3) Preparing your home: People buy a home based on its emotional appeal. If the buyer walks in and falls in love, they will most likely buy the home, and at a fair price. Spend some time walking through your home. Look at it from a buyer's perspective. List the things that detract from its emotional appeal. Make the needed changes and repairs prior to putting the home on the market. (Call me for a copy of our Maximizing Your Home's Appeal checklist)
4) Know your loan: Call your bank and find out what your mortgage payoff will be. Do you have a prepayment penalty? Is your loan assumable? If so, under what terms? Don't forget, your mortgage interest is payable in arrears. If you were to close a transaction at the end of a month, your payoff would be more than the balance owed.
5) Prepare yourself mentally: You will have unaccompanied strangers coming through your home. Be ready to have your private and quiet time interrupted. People viewing your home will read your unspoken language. Your attitude toward them will affect their interest in your home. Above all, please be careful! There is no guarantee that everyone entering your home will have honest intentions.
6) Understand the buyer's mentality: Many buyers purchase a home being sold By Owner because they think they will be able to buy it for less than they could if it were available through the real estate community. Because you are not paying a brokerage, they will expect to subtract at least an amount equal to a brokerage fee from the selling price. As you know, both the buyer and seller cannot save the cost of the brokerage. Prior to putting your home on the market, know how you will handle this concern when it becomes an issue.
7) Instruct your children: Please instruct your children to never allow anyone in to view the property, especially when they are home alone.
8) Personal safety: It is wise to show the property only when more than one adult is at home.
FINANCING
Become a loan expert. Educate yourself regarding the various avenues of financing available to buyers. You will want to be able to pass this information on to a potential purchaser. A buyer's decision to purchase, or not to purchase, a home, and the price they are willing to pay is often dependent on the size of the payments and the required initial investment. Shop lenders and/or access various loan programs over the Internet. Know the buyer's options. Put informational sheets in the house that will tell the buyer what his payments will be with various amounts of down payment. If you can find a way to make the down payment and monthly payments reasonable, a buyer may be willing to pay a premium price for your home.
1) The following are just a few of the loan programs with which a seller may want to become familiar: 30 & 15 year fixed, jumbo 15 & 30, all of the VA & FHA programs, ARM, 3/1 5/1 7/1 & 10/1 ARM, 80-10-10, 80-15-5, convertible ARM, sub-prime mortgage, 95% & 97% LTV loans, alternative mortgages (IE: 7/23 & 5/25), roll-in loans, and first-time buyer programs.
Tomorrow we'll discuss Pricing and Marketing.
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