The process of selling a home around Cleveland, Ohio can be a complicated, time-consuming process. Here’s a step by step guide detailing everything from determining to the timing is right to sell to the final closing.
Is the timing right to selling your Cleveland house?
- What are your financial and family goals for the next 5-10 years? Selling a home is a long-term decision.
- Weight the pros and cons of selling.
- Determine if you can afford to sell, pay closing costs, moving expenses and still be able to pull of purchasing a new home.
- Figure out what your home equity is so that you can ball park how much money you’ll net when it’s a said and done. A good Realtor can help you with this.
- Research the local housing market. What competition will you have when selling, and what homes are available to buy.
- Consider what repairs or updates would be necessary to make you house more marketable and in line with the competition.
- Think about whether or not renting your house is an option based on market conditions and your financial situation.
Calculate all of your selling expenses
- List all of the repairs and projects you need to complete. Figure out what the cost of supplies will be, and if necessary, get bids from contractors.
- See what projects you can afford to complete and prioritize. Consider projects that will make the house more marketable and projects that will give you the greatest return on investment for resale.
- Expect to pay around 10% of the homes sale price in closing costs. This includes: Realtor commissions, transfer taxes, prorated property taxes, title costs, and escrow fees.
- Other potential costs to consider would be: capital gains taxes, mortgage payoff penalties, supplies to prep and stage the house, moving expenses, cost of living in a new neighborhood, and costs associated with securing a mortgage on a new home.
Selling Strategy
- Do you need to sell quickly or do you need to sell for top dollar? You can’t have both, but an acceptable middle ground can usually be found.
- Find a knowledgable real estate agent that works in your Cleveland neighborhood or suburb. Make sure you review their marketing plan and they have access to the multiple listing service (MLS).
- Weigh the pros and cons of selling on your own or for sale by owner. If you go FSBO, hire a reputable real estate attorney.
- Discuss the strength and unique features of your home with your Realtor. It will help them in advertising the property effectively.
Determine the Fair Market Value of the House and Set a Realistic List Price
- Get your documents in order, including: tax bills, utility bills, home owner association documents, deed restrictions, assessments, surveys, documentation and invoices for repairs and upgrades, and home inspections reports.
- Prepare the Ohio state mandated disclosure forms.
- Discuss which items will be excluded from the sale. Items such as kitchen appliances, washers and dryers, and window treatments can be negotiable.
- Have your real estate agent run comparable sales for the house. Ideally you want to homes similar in location, condition, and size. Comps should have the same number of bedrooms as your home. You’ll want to see homes that are currently on the market (you’re competition), homes that are currently under contract or pending (what’s selling), and homes that have sold in the past six months (value). If you go back farther than six months, market conditions may have been different. You may also want to analyze expired listings that went unsold and determine why they didn’t sell. Maybe you can avoid the same mistakes.
- Research whether you have new construction and foreclosures that will be competition for your listing.
- Make sure your home’s price is in line with comparable homes as far as price per square foot.
- Evaluate market trends and conditions. Is it a buyer’s market or a seller’s market? What’s the current supply of inventory and absorption rate for houses in the area? What’s the interest rate environment? What’s the average number of days on market for active listings and what’s the average number of days for real estate that has sold? What’s the sale price/list price ratio?
- Use this analysis to determine the asking price. If you can’t price your property competitively given the current market conditions, you’re better off not putting the house on the market at all. Buyers and the market determine property values, not the seller or your agent.
Prepare and Stage the House
- Have a garage sale. Get rid of anything you don’t need.
- Make all the necessary repairs.
- Work on improving the home’s curb appeal. This could include landscaping, power washing the siding, cleaning up the beds, and cleaning the windows.
- Declutter, de-personalize, and decorate every room.
- Paint rooms that need painting.
- Replace outdated light fixtures, faucets, window treatments, and cabinet hardware.
Advertising and Marketing
- This is primarily the role of your Realtor. Make sure you’ve reviewed their marketing plan. Your house needs to be in the MLS and major real estate web sites in order to get maximum exposure.
- Ask for updates on the marketing if your agent doesn’t give them to you.
- Have flyers prepared for the house so buyers have something to look at while touring.
- Have a for sale sign with a contact phone number. A toll-free 800 number with automated information is also desirable. Not everyone wants to actually talk to an agent or yourself when inquiring about a house.
- Let family, friends, and co-workers know that your house is for sale. A postcard mailing to neighbors can also be effective.
- Photos are extremely important to make sure your home shows it’s best online. I use a professional photographer to take my pictures. It makes a huge difference.
- Set up virtual tours and/or videos and post them online.
Set up the Showings
- As hard as it is, always keep the house in showing condition. You never know when a buyer will be ready to come through.
- Make sure you have a lockbox on the house. You need to make the house easy to show for buyer’s agents.
- Never turn down a showing. They probably won’t come back.
- Leave the house for showings. It’s makes the buyers more comfortable and they can talk freely.
- If possible, turn on all the lights in the house prior to a showing. It makes the house feel bright and open. And you don’t want buyer’s stumbling around looking for light switches.
Entertain Offers
- Make sure you review any offers that come in with great detail. You don’t want to miss anything buried in the contract. Your Realtor should guide you through this.
- In particular take note of: the offer price, closing date, inspection contingencies, closing cost credits, earnest money, and expiration date.
- Require that the buyer is pre-approved. If they’re not, it’s probably in your best interest not to sign a purchase agreement until you see a pre-approval letter. It’s standard practice for offers to be accompanied with a pre-approval letter.
- Discuss how to handle multiple offers with your real estate agent should the situation arise.
- Don’t get frustrated by low-ball offers. Buyers are looking out for their best interests as well. Put your emotions aside and treat it like the business transaction that it is.
Negotiations and Counteroffers
- Everything in a purchase agreement is negotiable. Try to make it a win-win situation for yourself and the buyer. You need to be comfortable with the terms, but so do they.
- Consider if an offer with a home sale contingency for the buyers really makes sense. If their house doesn’t sell, you’re going to lose valuable market time.
- Focus on your bottom line. If the buyer needs help with closing costs or wants a home warranty, and the numbers still make sense as far as what you’re going to net, go for it. Don’t get lost in the details of how the transaction is structured. The most important facts are how much money are you going to walk away with and how quickly is the house going to close.
- Keep in mind that there could be a second round of negotiations after inspections. It’s quite common for a buyer to ask for repairs. Leave a little spare cash set aside to cover such a request, assuming it’s a reasonable one.
- If you get low-balled, still consider making a counter offer. Even a full price counter offer. Try not to shut down talks completely. A buyer’s offer may just be a starting point. Feel them out, see if they’ll budge.
- Try to be flexible on the close date. Make arrangements ahead of time for living arrangements in case your house sells quickly and you need to get out.
Inspections, Escrow and Closing
- After the inspection, make a plan for the repairs. Get estimates from a few contractors. Contracts typically state that repairs need to be made by professionals. Also consider offering the buyer a credit at closing for the costs of the repairs. They may be more comfortable having their own contractor do the work.
- Continue to keep the house clean and in good repair for the inspections and the appraisal. If the house doesn’t appraise for the sale price, the deal is probably going to fall apart.
- Your escrow officer will take care of the title work and finding the correct payoff information required for any mortgages you have on the house. They’ll prepare closing documents, disburse monies, and record the new deed and mortgage with the county recorder’s office.
- Most likely the buyer’s will do a final walk through. Again, make sure the house is in good order and any repairs that were agreed upon have been completed. You don’t want to scare the buyer for any reason.
- Sign the closing documents and collect your cash. Hopefully you made a few bucks on the deal.
- Transfer utilities out of your name.
- Move out. If you structure a deal properly and you’re prepared, you should be able to close on your house, close on a new house, and do the move within a week’s period of time.
- Make sure you keep all of the closing documents for your records.
Well I think that’s about covers it. I may have missed a few details, but that gives you the general idea.
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