Home Sales 101


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This webinar examines the basic of home sales process in Texas.

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  • Home Sales 101

    2. 2. Practical Issues for Home Sellers This mini course seeks to outline and discuss the major issues when confronted when considering the sale of residential real estate. Questions,Tips and Discussion will be used to exchange information
    3. 3. About Knowledge We are drowning in information but starved for knowledge. John Nasbit A little learning is a dangerous thing. Alexander Pope Knowledge itself is power. Sir Francis Bacon The essence of knowledge is, having it, to apply it ... Confucius
    4. 4. Are you Ready to Sell? Whether you are a first-time home Seller or entering the marketplace as a repeat Seller, you need to ask why you want to Sell ? What would you like in terms of real estate that you do not now have? Do you have a purchasing timeframe?
    5. 5. Issues to Investigate Do you have any equity in your current home ? Are you upgrading or avoiding a problem within the house, school, or are ready to upgrade? Do you have a down payment, usually 5 to 20 percent of the purchase price ? What are “costs” of selling your house ? Commissions, loan fees, inspections, title transfer, and taxes ...
    6. 6. Consider your options Upgrade to Move Improve your Home Stay Put and Stash the Savings These are highly dependent on your personal needs, desires, and financial position.
    7. 7. Selling and your Finances Trading up Trading Down Tax Issues
    8. 8. Selling and your Finances Trading Up The desire to have a better home is natural; however, you must examine the “reality” that you costs of living will increase.
    9. 9. Selling & Expected Expenses Smart Method Do a simple budget on your current expenses vs what your “upgrade” expenses become a reality
    10. 10. Selling & Expected Increases in Expenses Mortgage Payment Utilities Insurance Furniture Property Tax Maintenance
    11. 11. Selling to Trade Down Trading Down You may be nearing retirement and have no children. The house maintenance is tougher, don’t despair just trade down.
    12. 12. Review your Mortgage Options Do your potential buyers have financing ? Can you finance the purchase yourself ? Ask a Mortgage professional for help
    13. 13. Financing the Home Buyer Do you really want to be a lender ? You are essentially forgoing your now money. Is the buyer credit and risk worthy? Can you live with a default ?
    14. 14. Your Home Sale Selection of your financing source Mortgage Lenders Federal Housing Administration Private Institutions Personal Lender CONSUMERS DISCLOSURE: THERE ARE SEVERAL HUNDREDS LENDERS IN TEXAS, SELECT A LENDER THAT YOU FEEL COMFORTABLE WITH AS THEY WILL BE IMPORTANT TO YOUR PURCHASE
    15. 15. National Association of Realtors Timing of Sale 20 Season Off Season 15 10 5 0 March April May June July Aug Sept October Nov Dec Jan Feb
    16. 16. Local Real Estate Data Timing of Sale Season Off Season March April May June July Aug Sept October Nov Dec Jan Feb 0 3.75 7.5 11.25 15
    17. 17. Local MLS Numbers 2009 Date Sales Volume Avg. Price Median price Total Listing Mon. Inventory Jan 37 $5,985,000 $161,757 $135,700 366 3.4 Feb 53 $7,670,000 $144,717 $130,000 389 3.8 Mar 80 $11,971,850 $149,648 $136,400 406 4.1 Apr 63 $8,321,511 $132,087 $128,800 407 4.4 May 71 $12,500,000 $176,056 $144,300 432 4.8 June 70 $9,724,500 $138,921 $133,300 438 5.1 July 82 $11,762,650 $143,447 $137,800 477 5.8 Aug 64 $7,843,402 $122,553 $113,300 486 6.5 Sept 77 $10,661,256 $138,458 $127,800 448 6.3 Oct 88 $13,209,052 $150,103 $130,000 454 6.6 Nov 88 $12,226,635 $138,939 $118,500 472 6.8 Dec 74 $11,918,700 $161,064 $138,200 480 6.8 Yearly Averages 70.58333 $10,316,213 $146,479 $131,175 437.92 5.37
    18. 18. To Use a Realtor or Not to Use a Realtor ? First, most would say “Yes”, as no two properties -- even two identical models on the same street -- are precisely and exactly alike. Also, most would also recommend “Yes”, as contract terms, financing options, inspection requirements and closing costs. Also, no two transactions are alike. Selling and Buying real estate can be a complex matter.
    19. 19. Going Solo without a Realtor If you choose to deal with sell the home yourself, you should invest in a selling guide, such as “ Home Selling for Dummies” Once the transaction is started you may need more advice as you move toward purchase. These items add cost, complicate transactions, and can be wieldy.
    20. 20. For Sale by Owner The Pros Save on Commissions, Seller Ready with Buyer in Hand, Hands on Control, Sellers Market
    21. 21. For Sale by Owner The Cons No Idea on Value, Marketing, or Preparation Lack skills in Negotiation, Contracts, and Legal Paperwork
    22. 22. Who are the Players on a Real Estate Team You The Agent The Broker The Home Inspector The Loan Officer The Title Company
    23. 23. Who are the Players on a Real Estate Team You - Boss, Leader, Decision Maker The Agent - Primary mission is to accurately tell you how much your house is worth, plus negotiating to sell for top dollar
    24. 24. Who are the Players on a Real Estate Team The Broker - The agents boss who oversees the process and can assist if things get problematic The Home Inspector - They inspect your house to determine any potential problems with the property
    25. 25. Who are the Players on a Real Estate Team The Loan Officer - They help process the loans for buyers and sellers who eventually become buyers The Title Company - An escrow officer usually guides the transaction to closing so that everyone gets the money
    26. 26. Selecting your Real Estate Agent The Interview Knowledge & Competence Integrity Communication Rapport
    27. 27. Selecting your Real Estate Agent Important Distinctions Two Types of Agent Representation Buyers Agent Sellers Agent
    28. 28. Types of Real Estate Agents Sellers Agent The Sellers Agent works solely for the seller. Buyers Agent The Buyers Agent works solely for the buyer.
    29. 29. The Listing Agreement Legal Contract Employment Contract Compensation Agreement
    30. 30. The Listing Agreement The listing contract is a personal service contract between you and a licensed broker. This contract authorizes the broker to act as your agent by finding someone to buy your house.
    31. 31. The Listing Agreement The contract makes two pledges: • Agent promises to do their best to find a buyer • You promise to pay the broker commission
    32. 32. The Listing Agreement There are different types of listings that exist. Inquire which listing agreement is best for your situation.
    33. 33. Preparation of the Home Curb Appeal Highlights Paint Externals Lawn Sidewalks Shrubbery Flowers Windows Clutter
    34. 34. Preparation of the Home Exterior do attract, but the interior makes the sale Da Clutter the Home Da Clean the Home Da Paint
    35. 35. Preparation of the Home What is Staging ? Staging is the act of preparing a private residence for sale in the real estate marketplace. The goal of staging is to make a home appealing to the highest number of potential buyers, thereby selling a property more swiftly and for more money. Staging techniques focus on improving a property's appeal by transforming it into a welcoming, attractive product that anyone might want.
    36. 36. The Big 5 of Home Preparation 1. De Clutter 2. Cleaning 3. Repairing 4. Neutralizing 5. Disney Effect
    37. 37. Food for Thought on Smart Pricing Think like a Buyer Buyers make the Sale Address Pricing Upfront Do Comparative Market Analysis Work with your Agent
    38. 38. Smart Pricing using Analytical Methods Comparative Market Analysis A means of comparing similar type properties which have recently sold to the subject property.
    39. 39. Dangerous Departures on Pricing Pricing Too High Doing no Research Pricing Can’t Sell vs Won’t Sell
    40. 40. The Other Agent Insurance Agents and various coverages in the home ownership process
    41. 41. Title Insurance Title Insurance - Title Company A policy which insures a property owner should a prior claim arise against the property after the purchase has been completed. This also covers a lender should a question of ownership arise.
    42. 42. Flood Insurance Flood Insurance - Federal Government Supplemental insurance which covers a homeowner for any loss due to water damage from a flood; often required by lenders for homes located in FEMA- designated flood zones.
    43. 43. Home Insurance Home Insurance - Insurance Companies A standardized insurance policy package that covers a residential real estate owner against financial loss from fire, theft, liability for property damage, personal liability and other common risks.
    44. 44. Home Warranty Insurance Home Warranty Insurance - Private Home warranties for existing homes are typically one-year service agreements purchased by sellers. In the event of a covered defect or breakdown, the warranty firm will step in and make the repair or cover its cost.
    45. 45. Insurance Issues Title Insurance - Title Company Home Insurance - General Agent Flood Insurance - Federal Government Home Warranty Insurance - Private Companies
    46. 46. Home Inspection The home inspection removes doubts about finding any significant defects, problems, or issues before the purchase or mortgage is executed for years. The average cost can be from $250 -$500 Most lending institutions will require a professional home inspection before approving the final loan. A sellers disclosure document also supplements your home inspection report.
    47. 47. What is Closing ? What is it ? - Closing is a brief process where all of the necessary paperwork needed to complete the transaction is signed. Closing is typically held in an office setting, sometimes with both Seller and seller at the same table, sometimes with each party completing their papers separately.
    48. 48. What Happens at Closing? What Happens ? - The result is that title to the property is transferred from seller to Seller. The Seller receives the keys and the seller receives payment for the home. From the amount credited to the seller, the closing agent subtracts money to pay off the existing mortgage and other transaction costs. Deeds, loan papers, and other documents are prepared, signed and filed with local property record offices.
    49. 49. The Closing Move Transfer Utilities Before Closing Final Inspection Pre- Cleaning Move In
    50. 50. Course: Home Sale 101 Email: michaelchalambaga@gmail.com Author: Michael Chalambaga Credentials: Licensed Texas Real Estate Broker Member National Association of Realtors Member Texas Association of Realtors Certified Home Marketing Specialist