So you have decided to sell your property. Before anything else, it is a good idea to sit down and clarify your motivations and draw up a basic time frame for the selling process.
Why do you want to sell your property? Do you intend to simply find a larger property, or do you plan to move to another neighborhood, school district, city or state? You might think your reasons are obvious, but it is still a good idea to consider the implications of each option for your lifestyle, opportunities, and finances. Being clear about your intentions for selling will make it easier for us to determine the most appropriate option for your specified financial, lifestyle, and real estate goals.
When Should I Sell?
You should immediately establish your time frame for selling. If you need to sell quickly, we can speed up the process by giving you a complete market analysis and action plan to obtain all of your goals. If there is no pressing need to sell immediately, you can sit down with one of our expert real estate agents to thoroughly review the current market conditions and find the most favorable time to sell.
What Is The Market Like?
When you work with us, you can be sure we will put our knowledge, expertise and negotiating skills to work for you to find best market prices and terms. We will keep you up-to-date on what is happening in the marketplace and the price, financing, terms and conditions of competing properties. With us, you will know exactly how to price and when to sell your property.
How Do I Optimize My Finances?
Deciding to sell your property demands a serious consideration of your current financial situation and future possibilities. With the help of our qualified agents, you will be able to effectively assess the cumulative impact of these changes, estimate potential proceeds of selling your property, and plan effective tax savings and estate planning strategies. We will ensure that you not only take control of your finances, but use them to their fullest potential.
A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens' full amounts, whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency. Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties.
A short sale is often used as an alternative to foreclosure because it mitigates additional fees and costs to both the creditor and borrower. While credit is also typically damaged much less than from a foreclosure, both often result in a negative credit report against the property owner.
Most creditors require the borrower to prove they have an economic or financial hardship preventing them from being able to pay the deficiency.
Holding liens against real estate can include primary mortgages, junior lien holders—such as second mortgages, home equity lines of credit (HELOC) lenders, home owners association (HOA) special assessment liens — all of whom will need to approve individual applications for a short sale, should they be asked to take less than what is owed.
Most large creditors have special loss mitigation departments that evaluate borrowers' applications for short sale approval. Often creditors use pre-determined criteria for approving the borrowers and the terms of the sale of properties. Part of this process typically includes the creditor(s) determining the current market value of the real estate by obtaining an independent evaluation of the property with an appraisal, a Broker's Price Opinion, or a broker opinion of value (BOV). One of the most important aspects for the borrower in this process is putting together a proper real estate short sale package including hardship letter explaining why a short sale is needed.
Depending on each creditor's policy and the type of loan, creditors may accept applications from borrowers even if the borrower is not in default with their payments. Because of the overwhelming number of defaulting borrowers due to mortgage failures and other causes as part of the 2008 – 2012 global financial crisis, many creditors have become adept at processing such short sales applications; however, it may still take several months for the process from start to finish, often requiring multiple levels of approval. At Big Red Realty, our Experts are trained to assist homeowners facing foreclosures by effectively helping them short sell their homes. Call Big Red Realty today for a free/no obligation consultation.
You may opt to sell your property independently. There are many excellent reasons, however, why you should choose Big Red Realty to assist you in this important process. We will help you maximize your opportunities in the current real estate market. With our extensive contact networks developed through national and international organizations, as well as our current and past clients, we offer the most effective marketing and advertising strategies for your property. We will also guide you through the complicated paperwork involved, from the initial agreement to the final documents.
What To Look For In An Agent
Consider the following factors when looking for a listing agent:
1. Education. The most important factor in choosing a real estate professional is education in the real estate industry. Our professionals have advanced training and education, allowing them to be among the top agents in the world, earning prestigious designations in various real estate areas.
2. Experience and Expertise. You want a full-time agent who is familiar with your area and with the type of property you intend to sell. Does he or she employ a diverse range of marketing and advertising strategies? How tech-savvy is your agent? How many similar properties has he or she sold in the past?
3. Availability and Commitment. Your agent should be capable of prompt and decisive action during the course of selling your property. Does your agent make it a point to keep in touch with you on a regular basis? Can your agent easily be contacted in case of emergencies or even for the simplest questions? Is your agent available on the weekends or in the evenings when most buyers are out looking at homes?
4. Rapport. Does your agent take the time to listen to your goals and clarify your needs? Can your agent understand your unique situation and be genuinely concerned about the outcome of the process? Your listing agent will be your guide and partner in this crucial decision, so it is important to find one with whom you can get along.
What Is Your Property Worth?
Without a professional agent, most independent property sellers tend to overestimate the value of their property. You can avoid this pitfall by consulting an experienced real estate listing agent.
The Price Is Not Always Right
“The higher the price, the better the offer.” Don't be fooled by this popular misconception. Price is not always the determining factor when accepting an offer for several important reasons: the initial offer is usually not final, and there are a number of terms and conditions that may influence the final outcome of a price. You can trust our professionals to help you thoroughly evaluate every proposal without compromising your marketing position.
Negotiating the Right Way
We take the ethical responsibility of fairly negotiating contractual terms very seriously. It is our job to find a win-win agreement that is beneficial to all parties involved. You may even have to deal with multiple offers before ratifying the one you judge to be the most suitable for you – and as your agents, we will guarantee a thorough and objective assessment of each offer to help you make the right choice.
The Initial Agreement and Deposit
An effective agreement is a legal arrangement between a potential purchaser and the property’s seller. Laws vary from state to state, but in order to be a legally, binding agreement, the agreement may require consideration. This consideration (initial and additional deposit) is to be held in the closing agent’s escrow account pending the fulfillment of conditions or contingencies in the effective agreement.
Some important tips to keep in mind to streamline the process even further:
Inspection and Appraisals
Most buyers will have the property inspected by a licensed property inspector within the timeframe that was agreed upon in the effective contract to purchase. Some buyers will have several different inspectors inspect the property, if they wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution via third party. This is done so that the lending institution can confirm their investment in your property is accurate. A buyer of a commercial property may also have a complete environmental audit performed and/or soil test, if required by the lending institution.
The Closing Agent
Either a title company or an attorney will be selected as the closing agent, whose job is to examine and insure clear title to real estate. After researching the complete recorded history of your property, they will certify that 1) your title is free and clear of encumbrances (eg. mortgages, leases, or restrictions, liens) by the date of closing; and 2) all new encumbrances are duly included in the title.
A contingency is a condition that must be met before a contract becomes legally binding. For instance, a buyer will usually include a contingency stating that their contract is binding only when there is a satisfactory home inspection report from a qualified inspector.
Before completing his or her purchase of your property, the buyer will go over every aspect of the property, as provided for by purchase agreements and any applicable addendums. These include:
Depending on the outcome of these inspections, one of two things may happen:
1. Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the closing; or
2. The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of contract (usually the price). How do you respond objectively and fairly to the buyer when a renegotiation is demanded, while acting in your best interests? This is when a professional listing agent can make a real difference in the outcome of the transaction. Having dealt with various property sales in the past, we guarantee our expertise and total commitment to every customer, no matter what the situation.
Loan Approval and Appraisal
We suggest that you accept buyers who have a lender’s pre-approval, approval letter, or written loan commitment, which is a better guarantee of loan approval than a pre-qualification or no documentation from a lending institute. Expect an appraiser from the lender’s company to review your property and verify that the sales price is appropriate.
If you have come this far, it's almost time for congratulations, but not yet. Do not forget to tie up these loose ends:
Final Walk-Through Inspection
More of a formality than anything else, the final inspection takes place the day before, or the day of the closing. The buyer visits the property to verify that all is in working order, everything is the same as when the buyer last viewed the property, and that there are no extra items left behind.
Cancel Home Services and Utilities
We will provide a list of useful numbers for the termination of home services and utilities after the closing occurs.
We are ready to assist you should an unforeseen glitch pop up, even at this last stage. If something at the property breaks down or the buyers’ loan does not pull through on time, there is no need to worry. We have encountered these problems before so we know how to handle them as efficiently and stress-free as possible.
The closing agent will furnish all parties involved with a settlement statement, which summarizes and details the financial transactions enacted in the process. The buyer(s) will sign this statement and then you will sign as well as the closing agent, certifying its accuracy. If you are unable to attend the scheduled closing, then arrangements can be made depending on the circumstances and the notice that we receive. If you are receiving funds from the transaction, you can elect to either have the funds wired electronically to an account at your financial institution, or have a check issued to you at the closing. The seller should arrange to have all property keys and any other important information for the new purchaser at the closing, so that the purchaser may receive these items at this time.