The Top Fifteen Most Common CT Home Seller FAQS

If you have sold a home at one point in your lifetime, you already know that the process is a complex transaction that requires a number of individuals to work together to produce a favorable end result. If it's your first time selling a home, you are bound to have a number of questions about the process, just as you probably had when you were buying.

What is the difference between a CMA and an appraisal?

A REALTOR performs a CMA (Comparable Market Analysis),  which includes data  that compares a variety of active listings, pending listings  and sold listings within the past six months in order to arrive at a price range. An Appraiser performs much the same research as an agent, however he/she is also required to use a standardized form, which holds more information than most CMA's. See this article on CMA's and Appraisals.

Should I include negotiating room in the list price?

Your market analysis should be very clear as to what the sales price to list price averages are for your home, your neighborhood and your area. When an agent arrives at a price range, whatever negotiating room there is or isn't is included in that number. Adding " a little play" only makes your home appear to be overpriced as it will be in a different price range of homes that offer more value for the money than yours. As a result, your home cannot compete with a higher range properties, will appear overpriced, and make it that much harder to attract an offer.

What type of issues must a home seller disclose?

Pursuant to P.A. 95-311, Sellers must complete a Connecticut Residential Property Condition Disclosure, which identifies the current condition and history of all physical aspects of the home, as well as a  Lead-Based Paint Disclosure. When selling your home, you (the Seller) and your broker (if you have one) are responsible for disclosing any known issues that could materially affect its value.

When is the best time to sell my house?

The best time to sell is when you are ready, or when you must sell for one reason or another. Property sells throughout the year, and market time and saleability is mostly a function of supply and demand. The time of year you choose to sell can make a difference in the amount of time it takes and the final selling price.  The spring market begins in late January and continues through May. There is another surge in activity in September and October.  Timing is strategic and you may just be better off listing your home when the competition is not so fierce as it is in the spring market. Just something to consider.

Should I sell my home first or wait until I find another home?

The answer truly depends on your personal situation, as well as the condition of the local housing market, as there are advantages and disadvantages to each. If you  sell first, you maximize your negotiating position, and eliminate any need or possibilty of carrying two mortgages at once. A good safeguard to minimizing stress is to include a delayed closing contingency clause in your contract so that you can find another home with little or no pressure.

If you make an offer to buy a home without having your home under deposit first, you may be tempted to sell your existing home quickly, even at a lower price. If you are currently in a "buyers market", the odds of selling your home in time  to purchase the new one are not that favorable, and you may end up being disappointed. The only advantage of buying first is you can shop carefully for the right home and feel comfortable with your decision before putting your current home on the market.

How do I get my home to sell faster?

There are number of reasons why your home  will sell faster than others.  The most important factors are condition and price. Your home will sell most quickly when it has been well maintained and priced competitively to other houses selling in the area,  and is in a healthy real estate market.

Does my home need to be staged, and if so, how much does it cost?

Staging your home for sale is in effect, presenting an enhanced image of your home to attract more buyers. Most experts agree that the main living areas sell a home, so it is important to focus on your  living room, dining room, and family room, as well as any room that the future homeowner may find difficult to furnish or decorate.

Each home is different but basic staging principles are the same for all. Very few homes need to be staged to any extreme whereas a professional (and paid) stager is necessary. A good agent will tell you what needs to be done in order to effect a sale. The quick advice on staging?  De-clutter, de-personalize, distract any negatives, and neutralize your home with your agent's guidance.

What if I am "upside down" and won't have enough money to pay off the bank and sell my home?

This is what we call a short sale, and you are not alone. The banks do tend to want to work with you on this, and your agent should have some specialized knowledge and experience working with lenders for these circumstances. You will need to contact your bank and discuss this with them, and authorize your agent to be able to speak and negotiate on your behalf. The bank really does not want any more inventory, and although this process takes time, it is also well worth it.  

How do I compete with foreclosures? 

If your home is in fine repair, and generally in good condition, you need not worry about foreclosed homes as much as the media tends to think that you do.  Buyers see your home as one  that's ready to move into and in good condition.  It’s worth more to them- they don't want to do any work. Repossessed homes truly compete only with homes with deferred maintenance. The overwhelming majority of foreclosure properties are in need of major repairs, appliance replacement, HVAC systems and other structural components.  New lenders generally will not grant a mortgage on these homes unless the work is completed, and the banks are selling these properties as-is, which means that the buyer must complete repairs before the loan is granted. While foreclosures make great bargains for cash buyers who want to rehab them, they really are not for the general buying public.

What if I get a better offer after I’ve already accepted one? –

If you have signed a purchase contract accepting an offer, you are bound by its terms.  If the buyer defaults on one contingency, doesn’t follow through properly, or tries to renegotiate, you may have your way out. You can always ask the buyer if they would agree to walk away, or pay them to step away. Speak with your attorney as to the ways in which the contract can be legally cancelled so that you may accept another offer. See this helpful article on changing your mind after an offer has been accepted.

What are the most common contingencies in a purchase agreement?

A contingency is a stipulation to an agreement. Sales contracts typically contain several "contingency" clauses, or stipulations that the sale is subject to. The two most common contingencies are for financing- that is where the home purchase is contingent upon whether or not the buyer can secure a loan from a lender, and an Inspection Contingency, where the buyer has the right to have the property inspected for any problems that are unknown, or may have not been disclosed. If significant issues arise, the purchase offer could be rescinded or renegotiated.

Do I need to make repairs in order to sell my home? 

Sometimes a buyer might request a repair in their initial offer. More often than not, buyers may request repairs based upon the outcome of the building inspection.  Remember, this is all part of negotiating. just like the purchase price  Sometimes the lender will require some repairs in order for the buyer to obtain loan approval, but you can still negotiate who pays for them.    

Do I need to hire an agent?  

The overwhelming majority of home sellers hire REALTOR’s to list and sell their homes. Those who do not are known as For Sale By Owners, or FSBOs (pronounced FizzBo's). They market, negotiate, and sell their homes without agent assistance. Although there are a small number of  successful FSBO's, most of those sales are to family members or friends. Especially in a buyers market,  it is not the right route to go, considering all of the access agents have to whatever buyers are out there, and have knowledge of the legal ramifications for non-disclosure, misrepresentation, and the like. Ultimately, most FSBOs eventually hire an agent because the agent will handle all the details and minutia that a successful home sale requires – including the contract, forms, and disclosure statements – and expose the home to the widest range of prospective buyers through the local Multiple Listing Service  and the most visited national home search sites.

Is the commission negotiable?

Yes. Commissions are negotiable by law, and can vary depending on service, customer needs, and company policy. In general, agents charge between 4 percent and 8 percent for full service.

What costs are incurred when selling my home, and when are they due?

Paid at closing from proceeds are the real estate commission, (if you hire an agency to sell). Transfer  tax for the sale to the town and state, and prorated costs for your share of annual expenses, such as property taxes, homeowner association fees, utilties

Payable  prior to your home's sale and durring the process are advertising costs, marketing materials, and other fees if you sell the home yourself, repairs- if any are needed in order to effect a sale, and initial attorney's fees  and/or other professionals as needed.

One thing for sure, the more experienced the agent, the smoother the transaction is going to be.  With 27 years  of experience, I have assisted home sellers in the most difficult of markets, and with  the most difficult of buyers on the other side. No one likes to think about any of the negativity that can occur during such an emotional transaction. Be prepared for the bizarre to happen, because  it does more frequently than you can imagine. When you are ready to sell your home, you deserve the best representation available to you, so just contact me when you're ready. I'm up for all kinds of challenges, so bring it on if you have it!

If you have a question about buying or selling Real Estate in Fairfield County, and are in need of representation, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

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How to Figure Out the Right Price to List Your Fairfield County CT Home.

When you arrive at the decision to sell your home,  the next thing to do is to meet with an agent who will conduct a market analysis to value your property appropriately for the current market.

Here's where it can get tricky as far as pricing is concerned. Not all agents are proficient at pricing.  If you decide to call a total of three agents, you are sure to get three different prices.

Yes, they should all be looking at the same competition in the marketplace, and they should all be using a number of comparable sales to arrive at their price, but how is a homeowner to figure out the correct price when three agents give three different answers?

The best price analysis that you can obtain is one where the agent doesn't even have to tell you the price. It should be inherently obvious based upon the  information in the report. If it is not,  that's probably not the correct price.. That's all there is to it.

An analysis of a few active properties and a few sold homes are really representative of those homes and not of the the overall  market in general-  especially not your home.

Some agents will inflate their pricing estimate  just to get you to sign a listing agreement, because you will be happier with the price. Don't go that route, and be extra careful. If there is not enough information to back up their claim, the price is just pie in the sky, and you shouldn't rely on it.

A thorough analysis is always necessary to obtain a truly accurate value, and if the analysis isn't thorough, it should not be relied upon. Again, it should be obvious or very close to obvious as to what your home should "list" for, and also include data and what the estimated sales price will be. We all have the same information, it's just how hard the agent wants to work to do it properly

If you are ready to  sell your home, and want the best reliable and most accurate price, contact me. I will perform a True Market Analysis for you at no cost.

If you have a question about buying or selling Real Estate in Fairfield County, and are in need of representation, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

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Is a Short Sale Right For You?

A "short sale" is a real estate sales transaction in which the seller's mortgage lender agrees to accept a payoff of less than the balance owed on a property's loan. This typically happens when a borrower can’t pay the remainder of the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is a better alternative than foreclosure.

Short sales are different from foreclosures because the lender forces a foreclosure, while both lender and borrower consent to a short sale. Consent between these parties may suddenly change, however, such as if the borrower becomes obstinate and forces foreclosure, or if the lender disapproves of the sale price. If the property is collateral for a second mortgage from a different institution, it, too, must agree to the short sale, which may further complicate the transaction. 

Short Sales from the Lender’s Perspective

Banks incur a smaller financial loss from short sales than losses resulting from foreclosures, which cost lenders billions of dollars, mainly through the expense and time required to foreclose on the borrower and subsequently market the property. If the borrower owes $30,000 on their home, it’s often worth it for the bank to waive that amount, as the expense may be as much as $50,000 per foreclosure, according to a study by the U.S. Congress Joint Economic Committee.

 

Short Sales from the Seller’s Perspective

While a short sale will damage the seller’s credit rating, a foreclosure causes even greater credit damage. The process for a short sale is also faster, cheaper and less emotional than a foreclosure, in which former owners are often forcibly removed from their homes.

 

Short sales, however, do not necessarily release the borrower from the obligation to pay some or all of the remaining balance of the loan, known as the deficiency. The bank, depending on state laws, might be able to go after the seller for the remainder of the loan after the home sells. Also, in these states, known as recourse states, the IRS can treat the unpaid portion of the mortgage as taxable income.

 

Communities, too, invariably prefer short sales to foreclosures, which drag down the real estate market of whole neighborhoods. Vacant foreclosed houses, many of which have been ransacked by former owners or vandals, further reduce the property value of neighboring homes which, in turn, increase the likelihood of more foreclosures. Of course, communities don’t have much of a say in whether a home short-sells or forecloses, which is partly why a federal rule was issued to streamline and encourage short sales.  As of April 5, 2010, the various parties that must consent to allow a short sale – the borrower, the lender, the investor who owns the loan, and the bank that owns the second mortgage (provided there is one) – are all offered financial incentives to consent to a short sale. 

 

Typically, the following conditions must be present in order for a short sale to be approved:

• The property’s market value has dropped.
• The mortgage is near or in default status.
• The seller can prove that they have few assets. Tax returns and financial statements may be required to prove that the borrower has no stocks, bonds, or other real estate, for instance, which may be used to pay off the balance of the loan.
• The borrower has fallen on hard times. The seller is required to submit a letter to the lender that describes why they cannot pay the difference due upon sale, and how they wound up in financial hardship. This plea to the lender to accept a loss, known as a letter of hardship, may include the following acceptable explanations:
  • unemployment;
  • divorce;
  • medical emergency;
  • bankruptcy; and/or
  • death.

The following circumstances are generally not accepted "hardships":

• bad purchase decisions, such as gambling or vacationing;
• unhappiness with the neighbors, such as if a meth lab opened up next door;
• buying another home. If you can afford another home, the bank will wonder why you can’t pay off the one in which you currently reside;
• pregnancy. Lifestyle decisions aren’t taken seriously in letters of hardship; or
• moving into an apartment.

If you are considering the purchase of a short-sale property, here are some tips:

• Obtain legal advice from a competent real estate attorney.
• Consult with an accountant to discuss the tax ramifications of buying a short sale.
• Hire an InterNACHI inspector to inspect for problems typical of short sales and foreclosures, such as pests, mold, water damage, and/or structural defects. Realize that short-sale sellers have fallen behind on their mortgage payments, making it likely that they have neglected basic building maintenance and repair, or even intentionally abused the building. Presale inspections, which are suggested for all real estate transactions, are as critical for short sales as they are for foreclosures.

In summary, a short sale is a compromise consented to by the lender and borrower in order to avoid foreclosure, and can be a better financial deal for all parties involved.

by Nick Gromicko and Rob London

 

Nick Gromicko, FOUNDER. http://www.nachi.org
International Association of Certified Home Inspectors (InterNACHI) is the world's most elite, non-profit inspection association.
President, ComInspect, www.cominspect.com
Director, Master Inspector Certification Board, www.certifiedmasterinspector.org
Author, 15 books and Co-Host of  http://www.NACHI.TV

Is it Better to Work with a Buyers Agent or a Sellers Agent ?

If you want to buy or sell a house and obtain the best representation available to you, I am of the opinion that you should work with an agent who represents both buyers and sellers on a regular basis, and there are two very good reasons for that. They are "Marketing" and "Negotiations".

Marketing:

Marketing is defined as the process that is used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development, or simply put for the real estate business- Marketing is understanding "who" your customer is, how to reach them, gain their confidence, and effect a sale.

An agent who just represents the seller should have the marketing aspect down pat, and that's a good thing- but what about a strict buyers agent? They won't market to sellers, and quite frankly, they might not even know how because they don't do that as part of their everyday business. If your dream home is not on the market, you will have to rely on another agent in the mix.

Negotiating:

Although I will concede that there is a level of expertise that comes with just representing buyers, or just representing sellers, all of the top negotiators know that reaching  the best agreements come from negotiations where there is empathy for the other side, and a bit of give and take.

If an agent has represented one "side" of the transaction consistently, then I think it would be inherently difficult to remember what the other "side" wants and needs in order to feel satisfied and happy with the transaction, and that's not to say that the agent can even get to that point.

Herb Cohen, author of the book titled,"You Can Negotiate Anything", describes negotiation as this: Negotiation is a field of knowledge and endeavor  that focuses on gaining the favor of people from whom we want things. It's as simple as that".  How better to gain favor than knowing exactly what one wants? When you only represent one side of the transaction, you WILL forget what the other side wants. It's just human nature.

Also, if you have ever heard of the Negotiation Institute, and/or Gerard Nierenberg, who is considered the foremost authority on negotiating, he says, and I quote, "To know what your opposer is thinking and striving for, you must turn detective, you must apply various methods and techniques to your primary objective of recognizing his needs".

The best negotiators are the agents that split their business nearly evenly between representing buyers and sellers, and never forget the ever-changing needs of each type of client in the the current marketplace,. The best marketing agents are also the ones that educate themselves to further their professionalism and their clients interests.

I represent both buyers and sellers, and am proud to have earned the Certified Negotiation Specialist designation, besides earning the following pertinent designations from the National Association of Realtors, such as Certified Residential Specialist, Graduate-Realtors Institute, ePRO  Internet Certified, and Accredited Buyers Representative,  I might venture to say that  what mayhave been the single finest marketing program that I ever have had the privilege of graduating from was with the "Marketing Corporation of America" in Westport a number of years ago. Although it was quite expensive, the lessons I have learned from a pure marketing standpoint are worth their weight in gold regarding the psychology of sales. That is, learning about client behaviors, patterns and tried and true methods of sales. Comprehensive and incredibly insightful.

If you are in the market to buy or sell and need a top notch marketer and negotiator, contact me today.

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Founder of ForSaleByOwner Company Hires Realtor to sell his home.

Now that's a kick. Here's a man who earned quite a bit of money as the CEO of a company that promotes  and makes a lot of money from FSBO's (For Sale By Owners),  how easy it is do yourself, and when it came time to sell his own house, what did he do?

He hired a Realtor.

The company he founded, by the way is ForSaleByOwner.com

You know what happened? The Realtor felt that the seller's asking price was the wrong strategy, and urged the founder and former CEO to raise the price by a whopping $150,000. There were multiple offers, and then.. it sold! So not only was this particular owner underpricing his home,  he will net MORE out of the sale after the real estate  commission is paid. If you want to know, his home sold for  $2.15 million and it was in the Chelsea section of Manhattan.

This just seems so incredibly comical that someone in that position would go against his own grain, and it should speak volumes to the many sellers with no real knowledge of selling real estate as to what they should do when it comes time to sell their home.

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