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Before Putting your House on the Market

Before putting your house on the market, here are some questions you should ask and some answers you should have.

How much should I ask for my home?

Realistically priced houses sell faster

When Realtors have shown an over-priced property repeatedly and encountered resistance to the price, the home becomes shopworn through overexposure. As the listings ages, Realtors may opt to show their buyers newer listings where they have not experienced market rejection. Many sellers have learned, to their dismay, that if you overprice your house, you are more likely to end up slashing the price to renew interest in your property or failing to sell.

The best way to arrive at a market value price

If you are truly motivated to sell, interview Realtors, the professionals in your community. A Realtor will present homes that have sold in the area, known as comparable sales or comps. The agent will compare the features and benefits of the comps with the amenities in your home and assign a plus or minus value to each difference in features or benefits to develop an estimated sales price. Realtors have a remarkable record of listing properties at or near the final sales price due to their daily working knowledge of the product, homes like yours, and the market, the community in which it is located.

Avoid the "wiggle room" temptation

Many sellers have past experiences with listing homes tens of thousands of dollars above the eventual sales price. They want to get the most money for their property and list high thinking that they have thousands of dollars to nogotiate with in striking a deal. Consider listing very close to your sales price to attract more offers and then negotiating in smaller increments toward an eventaul sale price. Studies have shown that the best offers are made in the first month, so don't hold out too long for "top dollar."

Don't be offended by a low-ball offer

A sale is accomplished through practicing the art of negotiation. If a buyer initially offers a price, which is considerably below the list price, consider it a sincere offer to negotiate a sales contract on your property. Your Realtor will help you structure a counter-offer that indicates your willingness to give a little if the buyer is willing and able to come up to a price that more truly reflects the current market value. Many transaction today have multiple counter offers traded back and forth until an agreement is struck. It's part of the process.

Another price check on property

Most buyers will obtain a loan for a portion of the purchase price. If you overprice the property, and the buyer fell in love with the home and paid too much, the buyer may not be able to obtain the anticipated loan amount. The lender will appraise the property and offer to loan a portion of the marketing value. If the property does not appraise high enough to warrant the loan amount specified in the purchase agreement, both parties may need to compromise (Seller: lower sales prices; Buyer: increase down payment/equity) to complete the sale.

Other options

You may hire a professional appraiser who, for a fee, will recommend a figure based on recent sales in your area. Make sure a professional association such as the American Institute of Real Estate Appraisers certifies the appraiser.

How long will it take to sell?

In a "seller's market," which occurs when interest rates are reasonable and the supply of available homes is limited, you can expect to sell your house quickly - often within weeks in neighorhoods where houses are in demand and short supply. When there are fewer buyers and more inventory (homes for sales), the buyer activity is slower. In a slow market, you may expect to wait two or more months before finding the right prospect even when your house is priced right.

What about advertising?

A large portion of home sales are accomplished through the cooperative marketing of the listing agent and hundreds or thousands of Realtors who have access to the property through the TEMPO Multiple Listing Service (MLS) and internet web sites. Some national firms attribute over 50 percent of home sales to the MLS and other Realtors. A prospective buyer might also learn of your home by driving by, surfing the web, or reading the classified and display ads in local newpapers. Here again, it pays to work with a Realtor. They often have contracted advertising rates that allow for larger ads and more frequent placement. They also know which newspaper bring the most response for a specific community Realtors can list your property on a number of well-traveled web sites including from the California Association of Realtors and from the National Association. Advertising is part of the cost of doing business a Realtor absorbs when marketing your property.

Should I make any improvements to the property for a quick sale?

Yes, but don't go overboard. A thorough cleaning from top to bottom will assure your home is presented in the best condition. Consider hiring a cleaning service to clean and polish: windows, floors, window coverings, light fixtures, pictures, etc. You will want to shampoo carpeting unless it is damaged or stained. Less is more when showing property, so remove all but essential furniture and knickknacks to open up the space to it's fullest potenial. Fresh paint is attractive if you stick with soft white or neutral colors and have a professional finished product. However, paint spatters on windowpanes and floors has a negative impact. Consider painting the outside of the house to create a great first impression but new carpets, scraping floors, and other major improvements are risky. Your real estate agent knows what is best for your neighborhood and can make meaningful suggestions on what to fix for the best results.

How do I sort out the callers from the curious and the cranks?

If you are attempting to sell your home by yourself, take some precautions. When you open the home to possible buyers, accept the fact that many people will be just "lookers." You can minimize these by showing your home only by appointment, giving you a chance to question a prospect on the phone. Avoid setting appointments late at night or when you will be alone at the property. Obtain the prospect's telephone number and call back to confirm the appointment before making a commitment to show the house. If you can view the front of the house easily from the inside, get in the habit of jotting down the visitor's license plate number before they knock or ring the bell. Don't allow prospects to tour the home unsupervised and be wary of unusual questions about how many adults are in the residence and their work schedule. Caution children, again, that they do not open the door to strangers.

Sould I help the buyer arrange financing?

Often financing is more important to the buyer than the actual selling price. Realtors work with area lenders to propose various financing plans. This enables a buyer to pick and choose the down payment and monthly payment amounts. If you're choosing to market the property by yourself, contact home loans providers and develop financing options on your property for your property for your prospects. If you are able and interested in participating in the financing for the buyer, it is an option that may facilitate a sale. However, it also places you at risk. We suggest that you discuss this with your legal and/or financial advisors. With today's low down payment programs, low interest rates, and large supply of funds, the need for seller financing is diminished. Ask yourself, if a bank, savings & loan, or other company that specializes in mortgages doesn't want to finance this transaction, how safe an investment is it for me? Financing is another area where a Realtor can assist you anf your potential buyer. The real estate agent works with lenders on a daily basis. They are aware of market conditions and are up to variety and popularity of numerous financing packages.

What is escrow and how do I arrange it?

An escrow holder is a safe depository of documents and funds until the conditions of the buyer and seller have been met and the property is transferred. Simply put, Escrow Officers take care of the paperwork. There are a number of very important tasks which must be accomplished before a sale is complete. For example, just a few are listed below:

  • obtain demands from exiting lender
  • payoff exiting loan and approved expenses such as inspection reports
  • prorate taxes, fees and rents
  • obtain title insurance, homeowners' insurance and disclosure reports.

The escrow process coordinates the various demands of the transaction and provides the principals, buyer and seller, with their own complete accounting of debits and credits at the close of escrow.

Why should I talk to a real estate broker?

Selling a house has become more complicated.

For the Buyer -

Seeing and choosing the property takes a lot of time, the one commodity most of us don't have in abundance. A Realtor will focus on the neighborhood; amenities and price you're looking for, then show you those properties that most closely match your needs. Buyers rely on the Realtor to structure an offer with the down payment, monthly payment, and other terms that they want and explain the contract in language they understnad. They trust that they will not be exposed to unusual risks or liability when they sign the purchase agreement, a multiple page document.

For the Seller -

Finding buyer - most people need assistance in realizing the "American Dream," from making an offer on a property to filling out the loan application. If you are attempting to sell your home alone, many of the Realtors who are working with buyers for your area, may not know and show your home because it falls outside their databank of available inventory.

The Sale -

The state now requires that a seller disclose known facts about the property in a formalized manner. A Realtor will help you meet these various disclosure requirements. They may suggest you purchase a Property Disclosure Report (PDR) from First American's subsidiary, Property Data Services, Inc. to satisfy the natural Hazards Disclosure requirement. Sellers have also benefited from buying a Homeowners Warranty to pay for replacement and repair of specified items in the home that break after escrow is closed. First American's Homeowners Warranty has set a standard of excellence in the marketplace with the largest group of exceptional service for home repair.

The Buyer -

Lenders offer a large variety of loan products enabling more people to afford to buy a home so many choices can be overwhelming. When you list your home with a Realtor you are tied into a network of services and knowledgeable professionals that cost nothing until the results you want is achieved - the sale of your property. You harness a vast resource of market knowledge and negotiation expertise to expose your property to the most likely new owners. And, you can rely on the Realtor to assist you in understanding and completing all the new requirements in the real property transfer process.

What is title insurance and why do I need it?

Most probably, when you purchase your home, the title was insured. If your buyer wants to finance the property, most lenders in California will insist in title insurance to safeguard against loss if there is a flaw in the title. A good title insurance company researches the title and in-sures it until the next sale, all for a small one-time charge.

Do you really own the property?

Do you really own the property? Title insurance protects you in almost all disputes over ownership. Wrapped up among the numerous charges known as closing costs when you buy or sell property is a charge for title insurance. There is no law that says you have to have it, but if you want to finance any real estate tranaction, California lenders may insist upon it. Even without a lender, both the buyer and the seller of any property are well advised to take out title insurance coverage to protect their interests in the property.

One reason goes back in history to when this state was part of Mexico and a colony of Spain. Much of the land granted to settlers was without paperwork that can be traced t oday, leaving the risk of disputed claims and legal entanglement into modern times. But there may be other legal flaws in the title for very American reasons.

A deed of sale by a previous "owner" may have been a forgery or signed by a minor. A onetime owner may have been legally incompetent to excute a deed. The deed may have been signed with a power of attorney after the owner had died. There may be people with a legal claim to part of the property because of a divorce or because a child was born after the execution of a will. Or there may have a legal judgment or levy on which the title is dependent.

Any of these can void the title, leaving you not only without the property but also with additional costs to pay.

When you insure through First American Title San Diego, we insure that the property is yours. We search and examine records of all the other transactions that have ever taken place in San Diego County going through decades of records and ton of documents in our computerized title plant.

First American Title San Diego then insures that the deed is good. We insure you against loss if ownership is disputed, through First American Title Company. Their nominal one time charge is based on the value of the property, and the protection remains in force until the property is sold again. First American Title Company San Diego also offers the Eagle Policy which continues to provide you with protection against loss should a claim arise after you've sold the property.

First American Title San Diego, one of the leading title companies in San Diego County, would like to be your preferred provider of services whenever you enter a real estate transaction. We hope this information has been of value and you will let us provide exceptional service for your next real estate transaction. If you want more infromation, give us a call or ask your real estate agent or escrow officer.


Courtesy: The First American Title Co.

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