How To Make More Money When You Sell
Most sellers and real estate agents never stop to ask: “What marketing actually matters?” As it turns out, there’s a very specific, data-proven answer!
Every year the National Association of REALTORS® conducts a nationwide survey to gather extensive data on the housing market. One particular graph holds the answer to this critical question – the graph that shows “How Buyers Found the House They ACTUALLY BOUGHT”. And it reveals that over 96% of all resale home buyers found the home they actually bought in one of just FOUR WAYS – what I call the “CORE FOUR.”
They are (in current order):
1. The Internet
2. Real Estate Agents
3. For Sale Sign
4. Friends & Family
As a seller, these are the Core Four areas your agent must focus on to deliver maximum marketing power to get your home sold for top dollar. It's the foundation for my Core-Four Strategic Home Marketing system.
Selling: From Offer To MONEY In the Bank
Day 0 – Offer Accepted – This is when you’ve finally got a deal! The Buyers and Sellers have both agreed to the terms of an offer.
Day 1 – Escrow Opened – The earnest deposit is sent to the title company along with a copy of the fully signed contract. This should be done within 1 business day.
Days 1 – 10 – Due Diligence & Inspections – The due diligence period begins the day AFTER the contract has been signed by all parties. It lasts 10 days OR until the Buyer Inspection Notice & Seller’s Response form has been submitted. This Due Diligence Period is the time for home inspections, termite inspections, reviewing HOA CCR’s, commitment for title insurance, and learning anything else of interest regarding the suitability of the property.
The Buyers may request that certain repairs be made. This request for repairs must be submitted before the end of the 10 day Due Diligence Period. The Sellers then have up to 5 days to respond – either to agree, decline, or propose some alternative solution (ie – offer a credit at closing in lieu of completing the repairs).
Appraisal – The contract includes a built-in safeguard that the property must appraise for at least the offer price or the Buyer has 5 days to cancel the contract. It is good practice to have the appraisal completed during the inspection period so all key contingencies can be removed as soon as possible.
Days 10 – 25 – Loan Processing – The final body of work is usually the completion of loan processing, underwriting, and then preparing the loan documents for signatures. Loan docs are to be at the title company AND signed 3 full days prior to closing (ie – loan docs need to be completed on Monday if the closing is scheduled for Friday).
Day 27-ish – Signing at Title Company – Buyers are supposed to sign loan documents 3 full days prior to the scheduled closing date (but it often happens only a day or two before). This is also the time for Buyer down payment funds to be brought in either by cashier’s check or wire transfer. Cash buyers may wait until later. Sellers may sign as soon as the final HUD (settlement statement) has been prepared.
Day 30 – Recording – This is the finish line! After all documents have been signed and all funds received, the title company records the sale with the appropriate county and it is officially done! Possession and keys are delivered following the recording of the sale.
Cash from the sale is typically wired to your bank the same day (although it may arrive the following day if recording was late in the afternoon).
Seller Closing Costs
The whole list is spelled out below… A quick rule of thumb is to plan for closing costs to total about 7% of the sales price, or 10% if you’re giving 3% toward Buyer closing costs.
Brokerage Fee – My fee is 6% of the sales price – 3% for the buyer agent and 3% for my work. Additional savings may be available with FairFlex CommissionsSM.
Everyone knows: you get what you pay for. Whether you choose me or another pro, you’ll add thousands of dollars to your bottom line by paying a professional agent for top notch work versus mediocre results with a discount agent. If an agent tries to get business by lowering their price (instead of doing the work to be the best they can be), what do you think their approach will be to getting your home sold?
Owner’s Title Policy – This is a required title insurance policy purchase to insure good, clear title is being given to the new owners.
Escrow Fee – This is the title company’s fee for handling the sale. This fee is split 50/50 by Buyer and Seller.
Interest Through Closing – Loan payments are made in arrears (meaning the payment you make February 1st pays for owning the home in January). If you close on January 31, the title company will collect the interest for the number of days you owned the property in January as part of the loan payoff going to the bank.
Taxes Through Closing – Property taxes are only paid twice a year (April and October). The title company will collect a pro-rated amount for taxes through closing. If the bank was collecting money every month to pay your taxes and insurance, you will receive a refund of whatever amount was in that impound account after closing (except in a short sale). They typically mail you a check a few weeks after closing. Remember to cancel your homeowner’s policy to get a refund for any remaining time on that policy, too.
HOA Fees – Arizona requires sellers to pay the HOA Disclosure Fee if there is one. Other HOA fees can be paid by either party as negotiated. My experience is that HOA transfer fees are most often paid for by the Seller and prepayment of HOA dues is paid by the Buyer.
In addition to normal HOA dues, there are three HOA fees commonly collected at closing.
– Disclosure fees (must be paid by sellers)
– Transfer fees (to the HOA itself and/or the management company)
– Capital improvement/capital reserve fees (to build up cash for improvements such as new playground equipment, entry monuments and signs, etc)
Regular HOA dues vary widely. Monthly fees typically range from $125 – $250. On the high end, deluxe condominium complexes (like those at Tempe Town Lake) have HOA dues over $1,000 per month.
Buyer Assistance – Many Buyers ask for (and need) Seller help to pay their closing costs. Most Buyers who need the help ask for 3% to help them, and Sellers often find that it makes sense to cooperate, particularly if the Buyers offer close to the full asking price.
Home Warranty – This fee is also negotiable, but Buyers often ask the Sellers to pay for it. Approximately $400 for basic coverage with appliance and pool coverage as popular options at extra cost.
Miscellaneous – There are a number of other little fees such as Recording Fee to the county, Reconveyance/Tracking Fee to ensure that the bank releases your note, courier fees, etc. They’re typically less than $350 all together.
