Must Know For Every Homesellers – 4 Secret Questions
What does every seller want to know when they are thinking about selling their home or considering selling their house?
It is November 2023, and as you know, the market is changing. For the last ten to twelve years, it has been the seller’s market. Now it seems that we are heading towards a buyer’s market. Interest rates are still high, seven to 8%. Home prices have pretty much peaked, or almost peaked. Inflation is still high, and the affordability is very low. A lot of the buyers are priced out of the market and are interest-rated from the market. They cannot afford to buy anymore. So it is a buyer’s market. So if you are thinking about selling a home, these are the four things you need to know or may want to consider if you are thinking about selling. If you follow these four steps or address these four situations, you will be happy selling the home. The buyer will be happy buying the home.
Your realtor will be happy, the buyer’s realtor will be happy, and the home-selling process will be smooth and enjoyable. So the first thing that every seller wants to know is how much price can he get for the house? This is a very valid question. If I was going to sell my house, I would want to know as well. And as a seller, I want as much as possible. That’s a valid concern that I want the most money when I sell the home. Who would not want to? So you of course want the highest price. Whether you’re moving up, you want the highest price because if you’re moving up you want to pull all the equity from this house, every penny that you can get.
So you can put as much money into the newer house. If you are considering moving down, chances are you may be thinking about retiring, going from a big house to a smaller house. And if you have equity, and I’m sure you have equity in the house, you want to pull as much equity out. So if you are buying a smaller home, you can put some of the money into the smaller home and the balance of the money or balance of the equity, you can put it into your retirement account or any other savings account. So if you’re moving up or moving down, whatever the reason you want the most money, that’s what every seller wants. That’s what I would want as a seller as well.
The second thing that all the sellers want is more than just a price. And of course the price will be dependent on your location of your house, the terms and condition that you provide, your local market condition at the time of your selling. So that will determine your price. So whatever the price is, the next thing the seller wants to know is how much will I get in my pocket? What we call what is my net sales price on net closing cost and net profit. So let’s talk about what is your net profit after selling.
As you may know already know, when you sell a house there are a lot of cost and let’s look at some of the costs that you may incur. Of course, the first one is your mortgage payment. Assuming you bought a house 510 15 years ago and or you refinance, chances are you have a mortgage on it. If you have a mortgage on it, then that comes out of your sales price. The second thing, the major expense that you will have is if you’re selling your home with a Realtor and more than 90% of all the homes are sold via Realtors, then you have anywhere from four to 6% of your commission expenses. Then you have your escrow expenses, your title expenses. Maybe you need some repair cost. Maybe you want to appealing front yard and backyard and clean up your house and paint so you have those costs coming up. Then you may have repairs that you may want to pay for the house once it’s in escrow. Maybe they found out that the dishwasher is not working or there’s a roof in the leak or the garage door is not closing properly. Whatever it is, you may have some repair cost. If you have an association, then the seller usually pays the transfer of association fees.
So there are a lot of expenses. In fact, let’s look at this chart and assuming I’m in an Hills, Orange County, and the median home price is about a million dollars. So let’s say you want to sell your house and you want to list it for a million dollars. That’s what the current market bears. Let’s look at some of the expenses. The first expense you can see is I put an assumption of $450,000.
Let’s say you bought your house, the current home, for $600,000.07 eight years ago. Now you’re selling it for a million dollars because you’ve had so much appreciation and you’ve paid down the mortgage to $450,000, whatever loan amount there was. So if you have a $450,000 loan amount, the commissions at 6%, I’m assuming 6% commissions, that’s negotiable. But for this example, I put 6%, which is $60,000. You have your escrow settlement fees, you have your owner title policies, you have transfers tax, you have other junk fees, small fees, that what I call junk fees. And the other major expense I just put it for this scenario is repairs of $15,000. So all in all, the closing cost or expenses for selling your home is $83,000 in this example. And your loan amount in this example was $450,000.
So if you sell your house for a million dollars, you will end up with a net of $466,956 in your pocket. With this you can move up or move down or do whatever you can. But this is just an example. So there is a selling price and there is the net profit that you get or the net money that you get out of selling home.
This is what every seller wants to know. So if you are considering selling, please talk to your Realtor or your agent who’s helping you out. So before you put it on the market, have them make an estimated closing sheet like this one, so you know exactly what you’re going to get from selling the home. Of course, once you sell your home, the circumstances is different. And the exact number may not be what you estimated, but it should be pretty close. Hope this gives you an example of what you can net out of selling your home in this market. By the way, one thing I want to mention to you is this all of these fees and expenses are negotiable items. I just took an example.
Different escrow fees, different title companies, repair cost, all these are changeable items. So when you pick an agent or a Realtor, maybe they can help you out in finding the right vendors, right repair people, the termite people, the natural hazards, disclosures, all these items, they will find it for you and find you the best deals out there and those are most efficient in there. If you are looking for a Realtor in your local neighborhood, I’m connected nationwide with the top 3% of all the top agents nationwide. So I’ll be glad to refer you to an agent, direct message me or contact me.
The third thing most sellers want to know is when they hire a Realtor, is how long is it going to take to sell this home? What we call what’s the days in the market in selling this home. And that is a very important concern because the last thing you want is going to take three or four or five months to sell your home. And every weekend you have open houses, or every day you go to work or get up in the morning, you have to clean your house.
If you have kids or if you have adults or elderly staying in the house, you have to keep your house in great condition. Preview condition because an agent may call and say, I want to come and show the house in 2 hours, so you have to be ready, which is a hassle every weekend. When they want to show the home, you may have to go out of the house to a movie or a park so the agents can show your home. So there’s a lot of things at stake when it comes to the timing of selling a home.
The faster you can sell, the better off you are. Statistics shows that an average home should sell within 17 days. At least get into escrow in 17 days. And statistically, if you can sell within 17 days, it’s the most price you will get. So your objective is to sell within 17 days. But the funny thing is, even in this hot market, a lot of homes don’t sell, and it takes two or three or four months.
And usually it has to do with not pricing it right or picking your wrong agent, or your agent not doing the right marketing. The other things you have to consider the agents may call you and want to come and show a house at 06:00 P.m., because the buyers work and you again will have to wait for your dinner time. So the earlier you sell, or the faster you sell, the better off you are. Here’s a chart which I will show you, which is from the Orange County Multiple Service, which I belong to.
So it shows you that in January 2023, it took 31 days to sell a home. This includes multifamily home, residential homes, townhouses and mobile homes. The average was 31 days, which is pretty short. A normal market takes anywhere from 60 to 90 days to 120 days, or in a slower market. But right now the market is very hot. It has been very hot for the last ten years. It seems to be changing. So maybe in 2024 it may take longer, and in October it took about 15 days on the market. Of course, the current figures may vary, but depending on your local market, there are homes selling within ten days. There are states and cities where it’s taking three or four months to sell a home. So it’s very important that you price it right, you market it right. You have the right agent to help you do that. So you can sell a home not only in 30 days, but probably put it in escrow in 17 days.
I want to see if you can share what you think about the market of selling or what you need to sell. And if you can share with other viewers, please comment below. I would really appreciate it, and the viewers will appreciate it as well. The fourth thing and very important thing, and assuming that you’ve picked a Realtor who knows your market, who knows marketing, and is going to do the best thing for you, is what are you going to do to sell my house? So if I’m a Realtor, you’re going to ask me, what will you do to sell my house? And again, you don’t want your house sitting there for three or four or five months.
You want to sell it within 30 days. If I’m your agent, I would want to put it in escrow within 17 days. Here’s the fact even in this hot market, you would assume that all the homes that come on the market would sell well. Even in this market, almost 30% to 40% of all the homes in the Multiple Listing Service don’t sell.
They have to cancel the sale or it does not sell. They have to reprice it. They may have to change an agent to sell the house. So why does that happen? That happens because you might have picked the wrong Realtor, or the Realtor you picked made several errors.
Number one, he or she did not price it right or he or she did not do the right marketing for your neighborhood because different markets take different marketing or they were not very good at communications. Because one thing that is very important selling and when you pick a Realtor, is that the Realtor has to be very, very open to communication, very fast in communication in this social media world and Instagram world and text world. When an agent’s calls or a buyer calls from your internet or from the sign or from an open house, you need to respond to them right away. If an agent calls another agent, they need to respond to them right away. And I see it all day long.
One of the biggest disadvantages today of picking the wrong Realtor today is they do not communicate very fast or urgently or efficiently. So what does an agent have to do to sell their home? You need to ask your agent, hey, what are you going to do to sell your home? First and foremost, they have to price it right. Of course, the agents don’t price the house and the sellers doesn’t price the house.
The price is based on your competitive sales in your neighborhood. Whatever is selling in the neighborhood, if your house is better or has a view or has a pool, you can add to it. But if your house is under average and needs some work and does not have a great location, you may want to underprice it a little bit. So pricing it right is the number one thing that your agent should help you do and market it. So the second thing is marketing. Are they going to do photography or videography? Are they going to do a virtual tour? Are they going to do drone photography? All this photography is very important because as you know, 90% of all the buyers start their search online. They look at the pictures, they look at the videos. If they don’t like those videos, and even if your house was great but the pictures were not right or there was no video or not great photography, they will skip your house. So photography, videography, drone, and virtual tools is very important.
Did your agent ask you to spice up your house before you putting it on the market? Maybe put some flowers in the garden, trim some gardens, maybe paint a room, clean up the bathrooms, stage your home? Staging is very important. If you do staging, you can save almost 15 to 20 days of marketing time and sell it faster. The other thing your agents can help you do is help you with the disclosures. As agents, as Realtors, we have to let you know all the disclosures. Different states have different disclosures. Different counties has different disclosures. So you want your Realtor to help you fill out all the disclosures, make sure you give everything required by the code of safety, hazard and disclosures.
You are filling it out and giving it to the buyer before you close escrow. They should also help in the escrow process. It’s a long process. It takes anywhere from 30 to 45 days to close up escrow. There’s a lot of things to coordinate. There’s repair work, there’s lender approval, there’s appraisers, there’s filling other disclosures, there is timings to be done. If the buyer requests something within ten days or 15 days, you need to react to that and give them everything they want.
So the closing process is not that easy. And picking the right agent to make sure what they do to help you sell the house so that’s a very big question. What are you as an agent going to do to help me sell the home? Get me the most price, get me the most net. So picking the right agent is very key.
And if you are looking for an agent, I’m in Anaheim Hills, Orange County myself. But if you’re in another state, I have a referral network that I belong to, I’ll be glad to refer you. So direct message me or contact me. Link is below. The other thing your agent can help you with, with all the affiliates and vendors, you are going to need a termite company, you’re going to need a natural hazards company, you’re going to need an escrow company, a title company, or you may want an attorney. In some states, closings are happening by closing attorneys so they have a network of people they have used and proven track record so they can refer you to honest, diligent and reasonably priced affiliates and vendors. So that’s a key thing when you are looking for an agent and we’re looking to sell a house.
I did a video on how much exactly a closing cost are. It’s called closing cost explains. Please watch it and thanks for watching my videos.