Your Home's Value

After we meet on market conditions and comparable nearby sales and listings, you will set the listing or "asking" price for the house.

A common definition of market value is: "What a ready, willing and able buyer will pay, at a price a seller will accept." Buyers are sophisticated. They've already been shopping, and when they see your home, they'll be comparing features and financing.

Experience shows that: "A house priced more than 5% over market value discourages offers." Buyers who can afford the price can get "more house" for their money elsewhere. Buyers who cannot afford the price simply won't look. This is why we say, "A house priced right is half sold."

A fair market value will be determined by comparing the property with similar properties which have recently sold and (in some cases) with similar properties currently on the market. Experience in the industry has proven this "market analysis" approach is more accurate than the "replacement cost" or "potential rental income" methods.

Sample "Net Sheet"

Based on this sales price, I will go through a worksheet with you that estimates the "net cash" from the sale. Simply, this exercise subtracts anticipated charges paid by you from the sales price. A copy of the "net sheet" is left with the you. (An itemized list of typical selling costs is presented in the "Settlement" chapter, which is the stage when these charges are paid.)

Financing Strategy

No sale can be completed without financing. That is why it is generally to your advantage to appeal to the greatest number of home buyers by accepting the greatest range of financing plans. I will explain the basic differences between VA (Veterans Administration), FHA (Federal Housing Administration) and conventional financing, as well as explain "discount points".

What Is a Point?

A point is one percent of the amount of the buyer's mortgage loan. For example, if a loan is $500,000, one point is $5,000. Lenders charge points to increase the yield on their loans while reducing your monthly payment. On all loans, the home buyer and home seller may share the charges by mutual agreement.

Property Profile Folder

To enable me to prepare a folder of information on the property, you need to provide a number of documents and information specific to the location and jurisdiction. Because the list is long, you can understand why it's best to collect the papers before the listing appointment. These materials may include:

• Pay-Off Notice: A letter signed by you and mailed to the lender by the listing broker to notify the lender of the intention to pay off the mortgage in order to minimize prepayment of interest penalties to you. You should provide the broker with the lender's address, loan balance, assumability, years remaining on present mortgage, P.I.T.I. and the interest rate, if possible.
• Well and Septic Inspection: If the property is on septic/ well, current inspections by local health authorities are required while home is occupied. I will work with the buying realtor to arrange for the inspection after contract is ratified.
• Order Lender Appraisal: Lenders usually require an appraisal to ensure that the property is adequate collateral for a loan. A lender will usually insist on ordering its own appraisal for this purpose.
• Assessments/Easements: I will ask you if any tax assessments or easements exist on property that must be paid or included in the purchase contract and passed with the land when sold.
• Property Taxes/Condominium Fees: You will provide a record of property tax or condominium fee payments which the buyer will reimburse a pro-rata share to you at settlement.
• Inspections: VA/FHA and most lenders of new mortgages require a termite inspection certificate that shows the house is free of infestation. If the you do not have a current certificate, then the listing or selling broker (depending on area) will arrange inspection at your expense. Sometimes a home inspection and radon testing will be ordered. You should provide all information as to the physical condition of the property, such as the presence of fire retardant plywood.
• Utilities: You should provide a record of the past 12 months utility bills, including gas, electric, sewer, water, and trash where applicable. Most buyers will want to know history of utility costs.
• Helpful Documents: If possible, you should provide me with the deed, house location survey, condominium bylaws or homeowners association documents, subdivision plat map, house floor plan, previous title search abstracts, legal description of property (subdivision, section and lot), home warranties on major systems, if still in effect, and a copy of homeowner's insurance policy for endorsement in the purchase contract.

What Conveys?

In anticipation of a buyer's offer, you must be ready to supply me with a specific list of the personal property that is included in the real estate property for sale. Examples of items to "convey" may include: draperies, drapery rods, remaining heating oil, firewood, washer, dryer, refrigerator, stove, microwave, disposal, swimming pool chemicals, awnings, storm doors and windows, screens, venetian blinds, shutters, window air conditioner, etc. You should tag or remove items which do not convey.

Listing Agreement

When you are ready to put the house on the market, a listing agreement is filled out, indicating a specific period of time the agreement is in effect ("listing period"), and signed by you and all parties on the title. You've now hired a listing broker and listing agent.

Questions And Answers

What is a "Lockbox"?

A lockbox is a universal metal container for your house key that is hung on the front door and can only be opened by licensed Sales Associates. It provides access when the owner is away, thus assuring full exposure to prospective buyers.

Next go to Preparing property for sale what to do to prepare your home.