You’ve made the decision to sell your own home in California – congratulations. There are a few precautions, lawful details and time consuming attention that’s necessary when selling the home yourself. The first consideration, if you’re not using a realtor, you need a real estate lawyer. Rather, than working on a commission based on the home’s sale price, which could range from 2-7%, legal services are charged as needed and rates will vary depending on the lawyer’s office fees. They can help with the forms required to sell a property, advice in the state of California and answer any questions about the transaction processes.
You’ll need to have patience, especially if you are not familiar with the real estate market and don’t have your own database of potential buyers. So if you’re comfortable with your own skills, know the market trends and ready to give it shot, here’s the smart seller’s checklist to help the process go smoothly.
Decision to Sell
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The sale of a home for most individuals is the largest financial transaction during their lifetime. Doing it yourself involves a marketing strategy to get qualified buyers by advertising in right marketing streams and networking with the listing agents to attract buyers. Before you list the home, you need to meet with the lawyer, and request property deed and tax information, along with a home inspection to identify potential problems. Inspection services can run up to $200, be sure to ask about the updated regulations pertaining smoke alarms, carbon monoxide detectors and any enforceable disclosures.
Appraisal
Use local services for the appraisal on the current market trends to compare your home and establish a sales price. In California the fees range from $350 to $750 depending on the value and type of residence. Local services know the area; they have access to information on recent sales, and time frames for the sales. Do some of your own research by going online, review public records, compare prices from the newspapers, real estate publications and the local neighborhood. The more you know the better.
Listing Price
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Keep in mind that somewhere between 7-10% of home’s sale price needs to cover closing costs, transfer and prorated property taxes. Pricing is critical to ensure it covers all expenses. But at the same time, the worst mistake you can make is to price your home too high and end up with the home sitting on the market. Do your homework and calculate what it takes to sell the home quickly at a fair market value, set the price and make a profit. In most areas the cost per square foot is a safe gauge for determining if your home is priced to sell in the current market.
Open House for Agents and Buyers
Just because you’re doing this on your own, doesn’t mean you can’t use the same real estate marketing strategies to sell the home. Think about hiring a stager, someone who comes in and prepares your home for sale – they have a skill of making the home appeal to the buyer and could increase the price value by 3%.
You need to send out brochures, emails and flyers announcing the open house to real estate agents, friends, family, and coworkers. Be sure to include photos with all of the marketing information, showcasing your home’s best features. Have some refreshments during the open house, it’s a nice gesture and people tend to stay longer to preview the home. Be prepared to budget at least $1000 for marketing materials and advertising. Get a sign posted in the front yard with a box to hold flyers and put a lock box on the door so agents can enter the home.
It’s important to keep the home in order, if it becomes a challenge, consider relocating, while the home is on the market or plan to leave the home, when potential buyers walk through. Being in the home can interrupt the buying process and potential buyers may be uncomfortable and leave without considering an offer on a terrific home.
The Offer
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Well done, you got an offer. Now, sit down and review the documents carefully for each offer received. Take a look at the proposed offer price, and don’t be slighted for low ball offers, it’s just business. Be sure there’s a preapproved letter qualifying the buyer, you want to eliminate any delays of selling the home. If the buyer is having trouble with financing, there are alternatives, it’s your decision to consider waiting or rejecting the offer.
Contingencies are part of the offer; most are& based on the sale of the buyer’s previous home or a request that you to vacate the selling property quickly. Sometimes the buyer will ask the seller to pay for closing costs. It may be negotiable in trade for other considerations, such as the cost of repairs or a sales price adjustment. It’s really up to you as the seller. Pay attention to the proposed closing and offer expiration dates, when you’re negotiating and preparing to accept or counteroffer.
The earnest money is basically a deposit to show good faith supporting the offer. There are guidelines for underwriting that may require evidence that the deposit is good or it’s cleared the bank, especially if closing is done quickly. It’s time to call your real estate lawyer to help review the documents and protect your entitlements as owner and seller.
Property Disclosures
You’ve accepted the offer. Every state has its own guidelines, and California may be one of the most stringent when it comes to disclosure requirements. The disclosure needs to include known defects about the home, deaths that occurred on the property within 3 years from the date of sale, and neighborhood activities like trains and barking dogs. In particular for California, sellers must disclose potential hazards to the property such as floods, earthquakes or fire using a Natural Hazard Disclosure Statement.
Closing the Sale
The property is ready to close and prepare for the transfer of ownership. You need to choose the escrow officer; they normally do the title search and request payoff information that includes all mortgages and liens against the property being sold. They prepare and record documents, closing statements, hold and disburse funds involved with the transaction. Document transfers in California are based on the value of the home. For example a $500,000 sales price could cost you $500. Don’t forget the cost of couriers to transport documents, Homeowner Association transfers, and loan payoffs. Your real estate lawyer needs to review all documents and you need fully understand the total cost of selling your own home in California.
