Seller Information and Tips

Sellers

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Carrie Holmes, Member of Colorado Association of Realtors

Many people think there's nothing to selling their home. In some cases this might be true, but for the average homeowner it usually isn't the case. Most homeowners are not tuned into the trends and fluctuations of the real estate market or aware of the steps necessary to maximize profits on the sale of out home. Before you list with a real estate agent or REALTOR® you should bed as possible so you can make the absolute best business decisions.

Why Use a Realtor®?	Your Price Verses Market Price	Marketing Your Home
Getting the House Ready	How Much Should You Spend?	Your Home is Ready to Show
Accepting an Offer	Home Inspection	Counter Offer
Overview of the Buying and Selling Process	Answers to Frequenty Asked Questions	Preparing Your Home through the eyes of a Buyer
While Your House is Being Shown	Repair and Cleaning Checklist	Possible Work Orders

Why Use A REALTOR®?

REALTORS® are professional real estate experts that subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. Your real estate agent or REALTOR® should be able to give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.

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Your Price vs. Market Price

The selling process generally begins with a determination of a reasonable asking price.

One of the most common problem homeowners have when selling their home by themselves is overpricing. Many people who sell their home make a price without any facts other than what they paid for the home, how much they put in to the home and how much equity they are looking to receive from selling their home. An astronomical price over the area price could deter potential home buyers.

So how can you tell what my home is actually worth? As mentioned before, your REALTOR® should be able to help you determine the selling price for your home. However an appraisal, usually paid for by the buyer, will tell you what your home is worth. Some of the things an appraiser use to determine your home's worth are the location of the home, the proximity to desirable schools and other public facilities, the size of the lot, the size and condition and recent sales prices of comparable properties, among other factors.
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Marketing Your Home

The next step is a marketing plan. Often, your agent can recommend repairs or cosmetic work that will significantly enhance the salability of the property. Marketing includes the exposure of your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your agent acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.

Advertising is part of marketing. The choice of media and frequency of advertising depends a lot on the property and specific market. For example, in some areas, newspaper advertising generates phone calls to the real estate office but statistically has minimum effectiveness in selling a specific property. Overexposure of a property in any media may give a buyer the impression the property is distressed or the seller is desperate. Your real estate agent will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts.

Another way to market and promote your home is to hold open houses. But many real estate professionals believe unless open houses are particularly well-attended in your neighborhood they aren't that successful.

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Getting the House Ready

A house that "sparkles" on the surface will sell faster than its shabby neighbor, even though both are structurally well-maintained. Well-polished houses appeal to more buyers and in most cases sell faster and at higher prices. Additionally, buyers feel more comfortable purchasing a well-cared for home because if what they can see is maintained, what they can't see has probably also been maintained. In readying your house for sale, consider how much should you spend, exterior and curb appeal and preparing the interior.
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How much should you spend?

In preparing your home for the market, spend as little money as possible. Buyers will be impressed by a brand new roof, but they aren't likely to give you enough extra money to pay for it. There is a big difference between making minor and inexpensive "polishes" and "touch-ups" to your house, such as putting new knobs on cabinets and a fresh coat of neutral paint in the living room, and doing extensive and costly renovations, like installing a new kitchen.

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Maximizing exterior and curb appeal

Before putting your house on the market, take as much time as necessary (and as little money as possible) to maximize its exterior and interior appeal. Remember, making a good first impression can mean the difference between receiving serious offers for your home or being subjected to months of lookie-loos dropping by but never buying. The following are some tips to enhance your home's exterior and curb appeal:

Keep the lawn edged, cut and watered regularly.
Trim hedges, weed lawns and flowerbeds, and prune trees regularly.
Check the foundation, steps, walkways, walls and patios for cracks and crumbling.
Inspect doors and windows for peeling paint.
Keep your garage door closed.
Store RVs or old and beaten up cars elsewhere while the house is on the market.
Apply a fresh coat of paint to the front door.

Maximizing interior appeal

Enhance your home's interior by:

Giving every room in the house a thorough cleaning, as well as removing all clutter. This alone will make your house appear bigger and brighter. Some homeowners with crowded rooms have actually rented storage garages and moved half their furniture out, creating a sleeker, and more spacious look.
If necessary, repainting dingy soiled or strongly colored walls with a neutral shade of paint, such as off-white or beige. The same neutral scheme can be applied to carpets and linoleum.
Checking for cracks, leaks and signs of dampness in the attic and basement.
Repairing cracks, holes or damage to plaster, wallboard, wallpaper, paint, and tiles.
Replacing broken or cracked windowpanes, moldings, and other woodwork. Inspecting and repairing the plumbing, heating, cooling, and alarm systems.
Repairing dripping faucets and showerheads. Buying showy new towels for the bathroom, to be brought out only when prospective buyers are on the way.
Sprucing up a kitchen in need of more major remodeling by investing in new cabinet knobs, new curtains, or a coat of neutral paint.

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Your Home is Ready to Show

After your home is prepared to show, your agent will probably find a tactful way to suggest that you not be present while the house is being shown to prospective buyers. This is done because your presence will inhibit their actions and conversations. They won't feel free to open closets and cabinets, test out the plumbing, and discuss their observations objectively as they walk through. It goes without saying that your children and pets should not be on the premises either.

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Accepting an Offer

This might sound funny, but the highest offer is not always the best offer. If you prefer a lower-priced offer, perhaps with a better qualified buyer or more attractive terms, you can accept that offer instead. Or you can give counteroffers to one or more of the buyers. Caution: If you reject a full-priced offer, you may owe your agent a full commission even if you don't sell your home.

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Home Inspection

Your home is in escrow, and the buyer has scheduled a home inspection. Should you be worried about what the inspector might find? The answer depends, of course, on the condition of your home and how well you've maintained its major components over the years. Regardless of what the inspector may uncover, however, you shouldn't be overly concerned about the actual home inspection. Keeping in mind that disclosure laws and customary real estate practices vary from place to place, here are six suggestions as to how you might help the home inspection process go smoothly:

Leave the premises
Be courteous
If you stay in the home during the inspection, don't attempt to refute negative comments about your home during the inspection
Don't make statements about your home that are beyond your personal knowledge or can't be verified
Don't block access to normal living areas of your home
Make agreed-upon repairs promptly

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The Counter Offer

There's a lot to consider before you sign a real estate purchase agreement. If the terms and conditions of the deal aren't acceptable, you might want to pause and think twice, even if the purchase price is more than satisfactory. After all, the price will be moot if the transaction never closes.

The typical residential real estate purchase contract is complicated, densely written and packed with legal jargon, but don't use that fact as an excuse for not reading the entire contract. Take your time and read slowly. Ask questions about anything you don't understand. Be flexible and willing to negotiate. The following five points are among the many items that merit attention:

What are the cutoff dates for inspections and approvals of the inspection reports? A typical contract provides an opportunity for the buyer to hire all manner of experts to check out the condition of the home. From the buyer's perspective, the more time that's allowed for these once-overs, the better. Sellers, on the other hand, usually want the inspections to be completed and signed off as soon as possible.

Who is responsible for making repairs, if any, as a result of the inspections? The fact that the buyer orders one or more inspections of the home for informational purposes doesn't obligate the seller to make repairs or modifications as a result of those inspections. In practice, however, inspection reports often are used to negotiate repairs of major problems or safety or environmental hazards that may be noted. The purchase contract should provide some guidance for these negotiations.

Is the seller making any representations or warranties regarding the condition of the property? In some contracts, the seller warrants that specified major components of the home (e.g., the roof or central heating or cooling system) are in good repair and working order at the close of escrow. Buyers should understand which components of the home are guaranteed and which are being sold "as-is."

Will a home warranty plan be purchased? A home warranty plan is a sort of limited insurance policy covering the basic major systems and appliances in the home. It may seem like a prize for the buyers, but it's equally important for the sellers and the real estate broker representing the sellers. In fact, these warranty plans are so popular among real estate agents that many of them will pick up the tab for the program in order to insulate themselves from irate buyers.

When is the property scheduled to close? Pay attention to this date! If you're selling your home, you'll be expected to move out completely before the property changes hands. You'll want to make sure the closing date doesn't fall before you're able to move into your next residence. If you're buying a home, you'll be able to pick up the keys on the day escrow closes. You'll want to make sure you don't give up your prior residence too soon. Don't cut the dates too close. Many escrows end up closing a day or two later than the contract states--but that can happen only with the mutual agreement of the buyer and seller.

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Overview of the Buying and Selling Process
BUYER	SELLER
Consider Purchasing a Home Selects a Real Estate Agent Determines Needs and Wants Discusses Financial Issues Views and Researches Target Homes Makes an Offer to Buy	Decides to Sell Property Selects a Real Estate Agent Determines Needs Prepares Home for Marketing Agent Markets the Home Accepts, Rejects or Counters the Offer
7. Offer accepted 8. Loan Application 9. Inspections 10. Title Search 11. Appraisal 12. Loan Approval 13. Closing Papers Signed 14. Documents Recorded 15. Funds Available to Seller
16. Seller Moves Out	17. Buyer Moves In

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Preparing Your Home through the eyes of a Buyer

The effort put into repairing and cleaning your property is likely to be returned in a fast sale at an attractive price.

As buyers approach your property the first time, impressions are formed quickly.
Paint house - this can do more for sales appeal than any other factor.
Yard - Remove all toys, garbage, garden tools and other items from view.
Mow lawn and keep edged.
Close garage doors.
Put colorful flowers in front of house.

Often, while waiting to be let in, the first thing a buyer looks at closely is the front door. Put new paint on the front door.

Buy a new door mat.
Buyers take a close look at the basement of a home. They will look for bad wiring, leaky pipes and signs of decay.
Clean out basement and dispose of everything you are not going to move.
Ensure that there is plenty of lighting.
Sweep or vacuum floor.
Stack items neatly against walls.

The kitchen is often the most important room in the house. Make it bright and attractive.

Put a vase of fresh flowers on the table.
Replace curtains or clean existing ones.
Remove appliances from counters.
Create a pleasant fragrance in the kitchen (i.e. vanilla, cinnamon).

It is important that bathrooms are clean, bright and smell fresh.

Install a new shower curtain and replace worn throw rugs.
Polish all fixtures.
Open windows.
Hang bright, fresh towels.
Remove stains from toilets and bathtubs.
Use air freshener.
Display colorful soaps.

The living room

Clean out the fireplace and place logs in it.
Polish all woodwork.
Put big furniture in storage so rooms are not cluttered or crowded.

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Repair and Cleaning Checklist
Front Door Newly Painted Doorbell Operating Door Brass Polished Hinges Oiled Exterior of House House Recently Painted Gutters Recently Cleaned Missing Shingles Replaced Moss Removed from Roof Exterior Lights Operating	Family Room Cracks in ceiling/walls repaired Leaks repaired and watermarks covered Wallpaper Secured Woodwork repainted Windows washed Curtains/drapes/blinds cleaned Windows operating freely Drapes/blinds opened Hobby supplies put away Carpets cleaned
Windows Windows trims painted Windows Operating freely Cracked windowpanes replaced Windows Washed Driveway Resurfaced Potholes patched Recently Sealed	Bedrooms Cracks in ceiling/walls repaired Leaks repaired and watermarks covered Wallpaper Secured Woodwork repainted Windows washed Curtains/drapes/blinds cleaned Floor waxed/refinished Beds Made Laundry put away Floor Free from Clutter Carpets cleaned
Lawn Lawn in good condition Grass mowed Edges trimmed Trees/Shrubs Dead Branches pruned Dead Shrubs replaced Overgrown shrubs pruned Entry Entry lights operating Floors cleaned Closet light operating Closet cleaned	Basement Cracks in ceiling/walls repaired No evidence of water penetration Dampness removed Cold water pipes covered Dehumidifier/Sump pump installed No musty odors Drains cleared Furnace cleaned Storage neatly arranged Excess storage removed Floor swept Light fixtures operating Stairway runner secure Handrail secure Patios Wood Stained or Painted Fencing Secure
Kitchen Sink free of stains No dripping faucets Appliances in good working order Walls, cabinets free of stains Countertops cleared and cleaned Pantry neatly arranged Pantry hardware replaced Refrigerator defrosted	Bathrooms Sink stains removed Leaky faucets repaired Grouting stains removed All joints caulked Missing tiles replaced All fixtures operating Floors cleaned All supplies stored Guest towels New shower curtain
Dining Room Cracks in ceiling/walls repaired Leaks repaired and watermarks covered Wallpaper secured Woodwork repaired Windows washed Drapes/blinds open to view Floor waxed/refinished Carpets cleaned	These are just suggestions to help you obtain top dollar when selling your home.

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Possible Work Orders

The following is a list of some possible work orders. The work orders must be completed prior to closing and the seller is responsible for having them done. Check with your local authorities for specific requirements.

The following conditions may require a work order:

Broken windows.
Debris in crawl space.
Dry rot or deteriorated wood.
Earth-wood contact.
Overgrown shrubbery.
Electrical not in working condition.
Gutters and downspouts blocked or missing.
A hot water tank without a 3/4" discharge line.
Inadequate foundation ventilation.
Inadequate attic ventilation.
Less than four feet of waterproof material around tub enclosures (tile, formica, etc.).
Less than 18" clearance between soil and floor joists under entire house.
Peeling or missing paint.
Plumbing not in working condition.
Single oil or gas space heaters to heat entire house.
Water damage inside home.

You might have to:

Paint the exterior and interior if in bad condition.
Hook up to public water or sewer if available.
Get county certification if home is on septic or well.
Remove unused oil tanks or fill with cement-slurry or polyurethane foam.

Other items to remember:

Inspectors will need access to the attic.
Leased equipment cannot be included in the sale (i.e. hot water tank, alarm system, etc.).
All assessments must be paid.
Joint maintenance agreements will be required for common road easements for maintenance on home where property line is within 3' of structure.

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While Your House is Being Shown

Before Your House Is Shown

Tag or remove items not included in sale (i.e. water conditioner, chandeliers, plants, drapes).
Open shades and curtains to let in light.
Turn on enough lights so home is well-lit during showing.
At night, turn on porch light and outdoor lighting.
Tidy all the rooms. Neatness makes a room easier to view.
Clean dirty dishes in the sink and put away any dishes on counter.
Keep toys in the children's rooms.
Put away items in the yard such as bicycles, gardening tools and skateboards.
If fall or winter, light a fire in the fireplace.

While Your House Is Being Shown

When possible, leave while the property is shown. If not, remain in an area not being shown by the sales associate.
Let the real estate expert show your house. Answer questions candidly when asked, but avoid questioning potential buyers.
Refer inquiries about seeing your house to your Realtor to take advantage of the agent's professional skills in selling your home.
Don't mention items you wish to dispose of unless asked.
It is best to be away when your agent is holding an open house.
Keep pets outdoors or in one area.
Keep children quiet and in one area.
Keep radio, stereo or TV on low volume.
Keep money and other valuable items out of sight.

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Frequently Asked Questions

What is title insurance? Title insurance protects the named insured against loss because of defects, liens, encumbrances, adverse claims or other matters not shown or disclosed to the new owner that attach before date of policy.

What is a wood-destroying organism inspection report? A wood-destroying organism inspection report is a written opinion by a qualified state licensed structural pest control inspector based upon what was visible and evident at the time of inspection. The inspection report does not in any way represent or guarantee the structure to be free from wood-destroying organisms or their damage, nor does it represent or guarantee that the total damage or infestation is limited to that disclosed in the report. Wood-destroying organisms include subterranean termites, dampwood termites, carpenter ants, wood boring beetles and wood decay fungus.

What are the hazards of lead-based paint? All buyers and sellers are required by law to receive and read a pamphlet outlining the hazards of lead-based paint for homes built before 1978. Be sure to ask your real estate agent for a copy.

What are closing costs? Closing costs are an accumulation of charges paid to different entities associated with the buying and selling of real estate. For sellers, they are usually about 9.5-10% of the total sales price of a property. Some of the closing costs you might encounter are: discount points, escrow fee, documentation fee, homeowners' association fees, pest/rot inspection, real estate commission and title insurance premium.

What is the difference between "pre-qualified" and "pre-approved"? If a buyer is "pre-qualified" it has been determined, with a loan officer, what price the buyer can afford based on the down payment, debts and the amount the mortgage company will approve for the mortgage. Being "pre-qualified" is only a determination of probable credit. If "pre-approved", credit, employment and funds have been approved by the lender.

What should a home inspection include? Every inspection should include, but not be limited to, an evaluation of the following:

Foundations Roof
Heating and air conditioning systems
Ventilation
Common areas (for condominiums)
Septic tanks, wells or sewer lines*
Insulation
Plumbing and electrical systems
Ceiling, walls and floors
Doors
Hazardous materials concerns*

* There may be an additional fee for this.

What property details are usually included by Listing Services? Usually, properties listed will include the following details:

Location
Photograph
Price
Utilities
Amenities
Annual property tax
Current financing (when assumable)
Listing company

What pages are generally included in the Purchase and Sales Agreement?

Agency Disclosure
Financing Addendum/Clause
Earnest Money Receipt
Inspection/Clause
Conditions/Disclosures Addendum
Contingency
Addendum Outlining Special Conditions
Lead-Base Paint Notification
Property Disclosure Form (completed by Sellers)

What is the difference between a REALTOR® & Real Estate Agent? REALTOR® identifies real estate professionals who are members of the National Association of REALTORS® and subscribe to its strict Code of Ethics. Not every real estate agent is a REALTOR®. A REALTOR® may be an appraiser, property manager or involved in some other aspect of the real estate business.

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Overview of the Buying and Selling Process

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Preparing Your Home through the eyes of a Buyer

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Repair and Cleaning Checklist

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Possible Work Orders

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While Your House is Being Shown

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Frequently Asked Questions

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What is your home worth in today's market?

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