Selling Your Home: Frequently Asked Questions
Whether it’s your first time selling your home or you’ve moved more times than you can count, chances are you have questions. Here are some of the ones the JM Denver Home team encounters most often. As always, you are welcome to reach out to us directly with any question you may have – 303-204-6494 or firstname.lastname@example.org.
NOTE: These questions and answers are provided for your general information only. We do not provide legal or tax advice. We strongly recommend you seek independent legal or tax advice for your specific circumstances and conditions.
Can I change the listing price on my home? The short answer is yes. The initial listing price is only the start. If you start to get overwhelmed with showings, we may decide to raise the price before an offer comes. Conversely, if there are very few showings and no offers are coming in, we may decide to lower the price. Market conditions constantly change, and you have the flexibility to meet these changes.
Should I be at home during showings or an open house? This one is easy -- NO. Put yourself in the place of a potential buyer touring your home during showings or an open house. Their purpose is determining whether your home meets their needs. Therefore, they expect to be able to talk frankly and openly with their agent about the home. Your presence during showings or an open house can prevent buyers from speaking openly about their impressions or asking questions they may have.
Is an open house an effective way to sell my home? The answer to this is, "It depends." There are many factors are at work here. An open house can be effective when your agent coordinates it with a mailing to your neighborhood and/or other advertising. It can also attract more potential buyers if it is in a remote or less frequently traveled area. For more insight into open houses and how they work to help sell your home, see "Open the Door to Buyers with a Successful Open House".
Why haven’t I had any offers on my home? This question is not as simple as it may appear. Let's say your home has been on the market for 30 days and you haven't had any offers. Here are some of the things to look at to help figure out why.
--First, how many showings are you getting? If you're getting a good number of showings but no offers, your home may lack a feature that buyers are finding in other similar homes. If you're not getting any showings, you may be overpriced for the neighborhood.
--How many other homes in your neighborhood are selling? If there’s not much moving, there's probably nothing wrong with your home or your price. It could be that you're seeing a lull in the market. If lots of homes are selling fast, work with your agent to determine how they are different from what your home offers. Then, adjust accordingly.
--Have interest rates or other economic conditions changed in your area? If rates are going up and job prospects are going down, it's going to affect home sales. You may want to reconsider if this is still the right time to sell.
--What time of the year is it? We know May is typically the month with the highest number of listings, with sales following shortly thereafter. On the flip side, home sales are slow in the late fall with people wanting to get through the holidays before moving.
--(If you’re not selling with JM Denver Home team) Has your home been entered into the MLS and been given national exposure through the internet? If you are not getting activity after 30 days, you need to seriously review the initial marketing considerations and efforts.
--What’s going on with the real estate market cycle? This graphic shows the different phases in the real estate market cycle. The market can move back or forward from one phase to another in as little as a few weeks. Talk to your agent about where the market is and what that means for selling your home.
What expenses am I responsible for when I sell my home? As a seller, you are responsible for expenses related to: the title insurance policy; payoff of your existing mortgage(s) including prepayment penalties, if any; broker commissions; unpaid property taxes for the current year; repairs you have agreed to do; other miscellaneous items which you have accepted to pay.
What security precautions should I take in preparing my home for showings or an open house? Every agent who brings a potential buyer for a showing will be identified and registered. Nevertheless, common sense dictates you should not leave jewelry or other valuable items out where potential buyers could see or take them. In addition, you may want to secure items that are particularly fragile or have special sentimental value, just to prevent any possibility of damage.
Am I obligated to fix all of the items that turn up in the buyer’s inspection report? All inspection items fall into one of two categories: 1) health and safety issues; and 2) cosmetic issues. Generally, health and safety issues should be repaired. Cosmetic items require a judgment call. If you don't fix the health and safety issues, the buyer will void the contract and you will be faced with the same issues with the next buyer. The decision whether to fix a cosmetic item means you’ll need to weigh the cost and ease of the fix against the difficulty of a new buyer if you don’t fix them. Many times, the issues can be resolved by agreeing to a monetary settlement, with the buyer actually having the work completed.
What happens if my home doesn’t appraise for the agreed sale price? Colorado law strictly prohibits contact between real estate agents and appraisers, so your agent can’t “go to bat” for you with the appraiser. Your agent can, however, speak with the listing agent and attempt to resolve the discrepancy. If we cannot reach a satisfactory solution, it can go one of two ways. Either the buyer has to come up with a larger down payment, or you as the seller agree to reduce the price. If all else fails, then the contract will be void and the marketing efforts will resume in an attempt to find a new buyer.
What does it mean to have a "cloud on the title"? In preparation for closing on the sale of your home, you as the seller must provide a “title opinion” certifying that you do, in fact, have the ability to convey the title on the property to the buyer. If the title company’s examination of the title history reveals that an encroachment, lien, or easement has been recorded on the property, it is said to “place a cloud on the title." These items must be resolved prior before the sale can be completed.
I’m confused – what’s the difference between the Median Sales Price of homes and the Average Sales Price? These statistics give an indication of the overall state of the housing market. The median price is the midpoint of all homes sold in a given period. In other words, half the homes sold for higher prices and half the homes sold for lower prices. The average price of a home is calculated by adding the price of all homes sold and dividing by the number of homes sold in the same time period. The sale of just a few very expensive homes can skew the average, so it’s wise to consider both the median and the average, and to understand the difference when establishing a price for your home.
I’m confused – what’s the difference between my home’s square feet and its finished square feet? The term square feet refers to the total area within your home that is “above grade” (above ground). Basements are not included the stated square feet for a home. If all or a portion of the basement is finished, this amount of square is added to the square footage of the home; this number is referred to as “finished square feet.” The one notable exception to this rule is a "walk-out" basement. In this case, the finished square feet in the basement are included in calculating square footage of the home.
What is the Seller's Property Disclosure form? You’ll work with your agent to complete this form, which reviews every aspect of your property and its condition. This is a required form given to the buyer when you accept a purchase offer. In Colorado, sellers are required to disclose their knowledge of:
--ANY structural conditions EVER existing (structural problems; moisture/water problems; damage from pests; damage from storms or other casualty; cracks, heaving, or settling; exterior wall or window problems; and more)
--ANY roof problems EVER existing (leaks; damage; skylight problems; gutter/downspout problems; etc.)
--CURRENT problems with appliances; electrical and telecommunications; mechanical items; ventilation, air, and heat; water; sewer; and flooding and drainage
--ANY problems EVER existing with issues around use, zoning, or legal
--ANY problems EVER existing with access and parking
--ANY problems EVER existing with environmental conditions
--CURRENT status of the property in relation to a homeowners’ association, and any current issues with the HOA such as special assessments, lawsuits, etc.
--CURRENT additional issues such as an active homeowner’s insurance claim or litigation
Click here to view the form mandated by Colorado.
Am I required to disclose if my home has lead-based paint? If construction started on your home prior to January 1978, the United States Department of Housing and Urban Development (HUD) requires you to complete a Lead-Based Paint disclosure form when selling your home. The penalties for not doing this may be severe and are established by federal statute.
How do I determine the taxable gain on the sale of my home? As a general rule, you calculate the gain by starting with the sale price of your home (net of closing costs and commissions, excluding payoff of financial encumbrances). From that, subtract the price you paid for the home (including any capital improvements you made to the home while you owned it). Keep in mind that there are many other factors that go into this calculation, especially if you rented the property for a period of time while you owned it. Taxable gain is definitely a matter for you to discuss in detail with your tax advisor.
What is the difference between a listing agent and a selling agent? The listing agent is the real estate company (or individual) you select to represent your interests exclusively in the sale of your home. The selling agent is the real estate agent that actually brings a bona-fide buyer with a purchase offer to buy your home. Usually, the listing agent and the selling agent are two separate entities. On occasion, though, they are the same.