Important Seller Information
HOME SELLING
What Should I Know before I Sell My Home?
From 1995 through the winter of 2000, we in the Seattle area have experienced a very fast and competitive housing and condo market. Many sellers were behind this market and sold their houses for too little. On the other hand, some priced their homes aggressively but appropriately for the market conditions, and sold on the first day for well over the asking price because of a bidding war. At the beginning of 2001, however, the real estate market in Seattle has changed. Now we have seen prices drop about 5% to 7% and inventories are building. Average marketing time has increased from just a few days to 30 to 45 days. Every situation is different and needs to be approached accordingly.
Before you sell your property, we think you need to answer several questions:
1. Is this really the best time for me to sell?
2. What are the current market conditions in Seattle?
3. What is my house actually worth?
4. How long will it take to sell?
5. How do I find a good Realtor?
6. Should I sell my home myself?
7. How much will cost me to sell my home?
8. What do I have to do to get it ready to sell?
We discuss these issues below.
1. Is this really the best time for me to sell?
When you put your home on the market can impact the price you get. If inventories are low and there are buyers in the market for your type and price of home you can get more than if you were competing with five similar houses. The time of year may impact property values as well. For example, real estate usually slows in December because no one wants to be in the market during the holidays. People usually buy in December because they have to, not because they want to, and inventories are generally lower. So sometimes December is one of the best months to get the highest price for a house. Because every situation is different, the sale of a home has to be evaluated at the time the house goes on the market, not using market conditions that are three or six months old.
You need to consider all your options. Do you really need to sell? Should you sell or keep your place and rent it? What people think they need to do isn't always what they should do -- or what is best for them in the long run. You need to carefully analyze your particular situation, and you need to explore all your options before you decide to sell.
Back to top...
2. What are the current market conditions in Seattle?
You may have heard or read how "hot" the Seattle real estate market is. How properties sell in a day or two with multiple offers -- often for over the asking price. That was true up and until February of 2000. Our real estate market in Seattle has been extremely strong -- definitely a "sellers" market up to that point, but that has changed. The market has slowed and prices have even fallen since February 2000. We still see the occasional multiple offer now, but that is the exception, not the rule. Inventories have increased and average marketing times have increased, but there are still buyers in the market ready to buy. If you are interested in the Seattle market, here's an in-depth look at what forces have recently affected it, and where it's going. Ancient History, 1989 - 1998 If you lived in Seattle in 1989 and 1990, you probably remember what happened with real estate prices. The huge increase in prices was largely a result of supply and demand, influenced by the California market. People were selling their homes in California and moving here. They thought they had died and gone to heaven when they saw the prices of our properties. With supply not matching demand, prices increased rapidly. There were bidding wars on most good properties, and homes that sold for $250,000 in 1986 sold for $500,000 in 1990. The market adjusts quickly here, up and down. In August of 1990 the market entered a correction period. By 1991 that same house that sold for $500,000 would have sold for about $425,000. The market stabilized again in 1993 with prices keeping pace with inflation for the next couple years. Then in 1996 the market began to strengthen again, this time driven by the high-tech companies and job growth in the area. Seattle's economy was very strong, creating new jobs and lots of people have moved here. We started to see people from the Eastside (across Lake Washington from Seattle) wanting to move into the city because traffic and commuting was getting so difficult. Demand for in-city homes was much greater than the supply, and that caused the rapid price increase since 1996 until recently. Recent History, 1998 - Today Between 1996 and March 1998, prices increased rapidly. There were bidding wars on most good properties in good neighborhoods and prices increased by as much as 25% a year. Then in April of 1998 the market started showing signs that it was changing. Inventories increased about 25 percent or more, and the average marketing time increased from about 1 day to about 30 days or more depending on the location. The market started to show signs that it was going to correct, but prices never fell. We only saw a slight slow down and the market took off again in the fall of 1998. A very interesting thing happened in 1998 in that total sales fell about 12% from the previous year, but prices increased about 14% over the previous year. Then 1999 was again a very strong but different market in Seattle. We still had a few bidding wars on homes but not as many as in the1997 to 1998 period. But prices went steadily up. The papers keep writing about our "Hot" market and increased real estate prices. Even today we still hear some talk about our "Hot" market. Hot is relative - there are various degrees of hot-- and right now the heat isn't turned up very high. We are now in a more balanced market, or even in a slight declining market. Prices have fallen about 6% from last year, but it is more that sellers are not able to push prices up anymore. From 1996 through 1998, we would determine the price then look at how far we could push the price up and still get offers. We can't do that today. We have to establish fair market value but stay at the conservative end of the price range for the house to sell now. There are still buyers out there buying however. Occasionally, we'll still see multiple offers on excellent houses in good locations that are priced really well. The feeding frenzy has stopped. Buyers are much more cautious. Sellers and agents that don't understand our current market conditions and are listing their homes too high, stand a good chance that the home won't sell and then when it does after several price reductions, it will sell for less than it would have if it were priced correctly to begin with. The market has changed, but that doesn't mean that this is a bad time to sell. It means that buyers are not currently paying inflated prices for homes. However, with the major problems in the stock market over the past year and over the first few months of 2001 months we may see a larger down turn in housing prices. But we just have to wait and see. The FutureWill escalating property values ever stop? Not over the long run, most likely. That same home we spoke of earlier that sold for $250,000 in 1986 would sellfor about $850,000 today. Seattle remains one of the most livable cities in the country. History has told us that we have a substantial increase in the market about every ten years. In fact, since the 1970s, home prices have doubled about every nine to ten years. Seattle has a very strong and diverse business base. We are more than Boeing and Microsoft. Our downtown area is growing and vibrant. People want to live in the seattle area , and it is estimated that another 250,000 people over the next 5 years will be moving here. This is all good news for our housing market. Because of the traffic and commuting problems we have, we believe that close-in Seattle neighborhoods will continue to be the most desirable, and these neighborhoods should continue to be most in demand and see the greatest appreciation in value over the long run. Right now however, is the time in the market when an uninformed and unprepared seller could lose money, because if they think that the market is going up by leaps and bounds and price their property accordingly, their home will not sell for top price.
Back to top...
3. What is my house actually worth?
Determining the market value for properties in the city is different than for the suburbs. In the suburbs, in a housing development, size and condition largely determine price. You look at the last three months of sales of homes in the development and adjust for condition and amenities. In the city, pricing becomes more of an art than a science because no two homes are alike. You need to look at what homes sold for in similar neighborhoods, but adjustments for size, style, and upgrades become increasingly subjective depending on the property. A good example is that a particular three bedroom, two bath home may sell for $350,000 while another three bedroom, two bath home about the same size and condition may sell for $300,000 or $450,000 depending on the locationand style. You must take great care in setting a price, because if a house is priced too high it will generally end up selling for less than it would have if it were priced correctly. For a much more detailed look at home pricing, you should read our Free report.
Back to top...
4. How long will it take to sell?
In the past year in the Seattle area the average marking time or DOM (days on market) has usually been between 2 days and up to 45 days, depending on the market conditions. Today the average time is about 30 days, but if you over price your home it could stay on the market much longer. Seattle buyers have an unusual trait: they would rather make a full price offer on a fairly priced home than make a low offer on an over priced home. If your home is correctly priced (and isn't particularly unusual), you should expect to have it sold withinabout 30 days, and another 30 days for closing.
Back to top...
5. How do I find a good Realtor?
Good Realtors are not all that easy to find. Good agents possess a very strong sense of the market and are attuned to its nuances and subtle changes. Their approach to their clients needs are well thought out and documented. Of course, we think we're great agents, but we realize we may not be right for everyone.
Here are a few things that we would do if we were to hire an agent: We would only work with agents that have been in the business for at least three to five years and that have some advanced designations, like Associate Broker, GRI, CRS,or ABR. Even if you think you know the right agent, you should interview several agents, at least three. We would call the three top companies in the area and talk with the Managing Broker to ask who their top agents are, and who really works with both sellers and buyers. We think it is important to work with agents who both list properties and represent buyers, because they have a fuller view of the market. We would then interview the agents to choose whom we think best understands our needs and would best represent us. We would probably talk with five or six agents over the phone but actually sit down with only three. We would also call their references. Finding a good agent could be one of the most important decisions you can make. Selling your home is an important financial decision; to get the highest possible price and to protect yourself from any possible problems requires the use of professionals. Find the best one you can and find one that is able to tell you the truth about your property. Don't choose an agent because they give you the highest price; choose them because they have a proven tract record.
Back to top...
6. Should I sell my home myself?
Some people are very successful at selling their home themselves. However, it does require work. When people tell us that they are going to sell themselves because they want to save the commission, the fact is they actually are going to earn the commission they expect to save. But not all of it. Many FSBO (for sale by owners) end up paying the buyer's agents some commission, usually 3 percent. One of the biggest problems with an FSBO is the difficulty in showing the home because the owner works. Another complication: it is always better if the owner is not present when a prospective buyer sees the home, but if you're the agent too, you need to be there, and typically at the buyer's convenience. Another potential concern is having a perfect stranger knocking on your door wanting to see your home. Real estate agents sell most homes, so a FSBO needs to market the home to all the other agents for the best chance of selling it. Even in the hottest of hot markets not all FSBO's sell, you have to price your home correctly, make it easily available to show, and market it effectively. And don't get overly emotional or take the negotiations too personally.
Back to top...
7. How much will it cost me to sell my home?
If you list your home or condo with a Realtor and they sell it, the rule of thumb is that your closing costs will be about 9 percent of the purchase price. Typically, 6 percent is real estate commission and 1.78 percent is State Excise Tax. Title Insurance and Escrow fees make up the rest. In addition, other fees can arise for attorneys, pest inspections, and the like, but these can typically be avoided with good planning and preparation.
Back to top...
8. What do I have to do to get ready to sell?
This depends on the market and your competition, but generally, home sellers believe they have to do more than they really have to do to get their home ready for sale. The first impression of a home is when you drive up to it and when you reach the front door. Those areas should be cleaned up to look in good order. Once inside, you should let in as much light as possible and rooms shouldnot be cluttered. Kitchens, particularly, should be free of clutter, and basements should be clean and bright (use 100 watt light bulbs) and have the windows cleaned. Typically, you don't need to paint or put in new carpet. If your carpets are very dirty, you might want to have them cleaned. Spend as little money as possible and don't get carried away. The people who buy your home will get carried away and repaint, put in new carpet, or tear out the old carpet and refinish the hardwood floors, and so on.
You can contact us also at 206.501.8090.
Back to top...
Send me your free comprehensive report "Selling in Today's Market."
What Should I Know before I Sell My Home?
From 1995 through the winter of 2000, we in the Seattle area have experienced a very fast and competitive housing and condo market. Many sellers were behind this market and sold their houses for too little. On the other hand, some priced their homes aggressively but appropriately for the market conditions, and sold on the first day for well over the asking price because of a bidding war. At the beginning of 2001, however, the real estate market in Seattle has changed. Now we have seen prices drop about 5% to 7% and inventories are building. Average marketing time has increased from just a few days to 30 to 45 days. Every situation is different and needs to be approached accordingly.
Before you sell your property, we think you need to answer several questions:
1. Is this really the best time for me to sell?
2. What are the current market conditions in Seattle?
3. What is my house actually worth?
4. How long will it take to sell?
5. How do I find a good Realtor?
6. Should I sell my home myself?
7. How much will cost me to sell my home?
8. What do I have to do to get it ready to sell?
We discuss these issues below.
1. Is this really the best time for me to sell?
When you put your home on the market can impact the price you get. If inventories are low and there are buyers in the market for your type and price of home you can get more than if you were competing with five similar houses. The time of year may impact property values as well. For example, real estate usually slows in December because no one wants to be in the market during the holidays. People usually buy in December because they have to, not because they want to, and inventories are generally lower. So sometimes December is one of the best months to get the highest price for a house. Because every situation is different, the sale of a home has to be evaluated at the time the house goes on the market, not using market conditions that are three or six months old.
You need to consider all your options. Do you really need to sell? Should you sell or keep your place and rent it? What people think they need to do isn't always what they should do -- or what is best for them in the long run. You need to carefully analyze your particular situation, and you need to explore all your options before you decide to sell.
Back to top...
2. What are the current market conditions in Seattle?
You may have heard or read how "hot" the Seattle real estate market is. How properties sell in a day or two with multiple offers -- often for over the asking price. That was true up and until February of 2000. Our real estate market in Seattle has been extremely strong -- definitely a "sellers" market up to that point, but that has changed. The market has slowed and prices have even fallen since February 2000. We still see the occasional multiple offer now, but that is the exception, not the rule. Inventories have increased and average marketing times have increased, but there are still buyers in the market ready to buy. If you are interested in the Seattle market, here's an in-depth look at what forces have recently affected it, and where it's going. Ancient History, 1989 - 1998 If you lived in Seattle in 1989 and 1990, you probably remember what happened with real estate prices. The huge increase in prices was largely a result of supply and demand, influenced by the California market. People were selling their homes in California and moving here. They thought they had died and gone to heaven when they saw the prices of our properties. With supply not matching demand, prices increased rapidly. There were bidding wars on most good properties, and homes that sold for $250,000 in 1986 sold for $500,000 in 1990. The market adjusts quickly here, up and down. In August of 1990 the market entered a correction period. By 1991 that same house that sold for $500,000 would have sold for about $425,000. The market stabilized again in 1993 with prices keeping pace with inflation for the next couple years. Then in 1996 the market began to strengthen again, this time driven by the high-tech companies and job growth in the area. Seattle's economy was very strong, creating new jobs and lots of people have moved here. We started to see people from the Eastside (across Lake Washington from Seattle) wanting to move into the city because traffic and commuting was getting so difficult. Demand for in-city homes was much greater than the supply, and that caused the rapid price increase since 1996 until recently. Recent History, 1998 - Today Between 1996 and March 1998, prices increased rapidly. There were bidding wars on most good properties in good neighborhoods and prices increased by as much as 25% a year. Then in April of 1998 the market started showing signs that it was changing. Inventories increased about 25 percent or more, and the average marketing time increased from about 1 day to about 30 days or more depending on the location. The market started to show signs that it was going to correct, but prices never fell. We only saw a slight slow down and the market took off again in the fall of 1998. A very interesting thing happened in 1998 in that total sales fell about 12% from the previous year, but prices increased about 14% over the previous year. Then 1999 was again a very strong but different market in Seattle. We still had a few bidding wars on homes but not as many as in the1997 to 1998 period. But prices went steadily up. The papers keep writing about our "Hot" market and increased real estate prices. Even today we still hear some talk about our "Hot" market. Hot is relative - there are various degrees of hot-- and right now the heat isn't turned up very high. We are now in a more balanced market, or even in a slight declining market. Prices have fallen about 6% from last year, but it is more that sellers are not able to push prices up anymore. From 1996 through 1998, we would determine the price then look at how far we could push the price up and still get offers. We can't do that today. We have to establish fair market value but stay at the conservative end of the price range for the house to sell now. There are still buyers out there buying however. Occasionally, we'll still see multiple offers on excellent houses in good locations that are priced really well. The feeding frenzy has stopped. Buyers are much more cautious. Sellers and agents that don't understand our current market conditions and are listing their homes too high, stand a good chance that the home won't sell and then when it does after several price reductions, it will sell for less than it would have if it were priced correctly to begin with. The market has changed, but that doesn't mean that this is a bad time to sell. It means that buyers are not currently paying inflated prices for homes. However, with the major problems in the stock market over the past year and over the first few months of 2001 months we may see a larger down turn in housing prices. But we just have to wait and see. The FutureWill escalating property values ever stop? Not over the long run, most likely. That same home we spoke of earlier that sold for $250,000 in 1986 would sellfor about $850,000 today. Seattle remains one of the most livable cities in the country. History has told us that we have a substantial increase in the market about every ten years. In fact, since the 1970s, home prices have doubled about every nine to ten years. Seattle has a very strong and diverse business base. We are more than Boeing and Microsoft. Our downtown area is growing and vibrant. People want to live in the seattle area , and it is estimated that another 250,000 people over the next 5 years will be moving here. This is all good news for our housing market. Because of the traffic and commuting problems we have, we believe that close-in Seattle neighborhoods will continue to be the most desirable, and these neighborhoods should continue to be most in demand and see the greatest appreciation in value over the long run. Right now however, is the time in the market when an uninformed and unprepared seller could lose money, because if they think that the market is going up by leaps and bounds and price their property accordingly, their home will not sell for top price.
Back to top...
3. What is my house actually worth?
Determining the market value for properties in the city is different than for the suburbs. In the suburbs, in a housing development, size and condition largely determine price. You look at the last three months of sales of homes in the development and adjust for condition and amenities. In the city, pricing becomes more of an art than a science because no two homes are alike. You need to look at what homes sold for in similar neighborhoods, but adjustments for size, style, and upgrades become increasingly subjective depending on the property. A good example is that a particular three bedroom, two bath home may sell for $350,000 while another three bedroom, two bath home about the same size and condition may sell for $300,000 or $450,000 depending on the locationand style. You must take great care in setting a price, because if a house is priced too high it will generally end up selling for less than it would have if it were priced correctly. For a much more detailed look at home pricing, you should read our Free report.
Back to top...
4. How long will it take to sell?
In the past year in the Seattle area the average marking time or DOM (days on market) has usually been between 2 days and up to 45 days, depending on the market conditions. Today the average time is about 30 days, but if you over price your home it could stay on the market much longer. Seattle buyers have an unusual trait: they would rather make a full price offer on a fairly priced home than make a low offer on an over priced home. If your home is correctly priced (and isn't particularly unusual), you should expect to have it sold withinabout 30 days, and another 30 days for closing.
Back to top...
5. How do I find a good Realtor?
Good Realtors are not all that easy to find. Good agents possess a very strong sense of the market and are attuned to its nuances and subtle changes. Their approach to their clients needs are well thought out and documented. Of course, we think we're great agents, but we realize we may not be right for everyone.
Here are a few things that we would do if we were to hire an agent: We would only work with agents that have been in the business for at least three to five years and that have some advanced designations, like Associate Broker, GRI, CRS,or ABR. Even if you think you know the right agent, you should interview several agents, at least three. We would call the three top companies in the area and talk with the Managing Broker to ask who their top agents are, and who really works with both sellers and buyers. We think it is important to work with agents who both list properties and represent buyers, because they have a fuller view of the market. We would then interview the agents to choose whom we think best understands our needs and would best represent us. We would probably talk with five or six agents over the phone but actually sit down with only three. We would also call their references. Finding a good agent could be one of the most important decisions you can make. Selling your home is an important financial decision; to get the highest possible price and to protect yourself from any possible problems requires the use of professionals. Find the best one you can and find one that is able to tell you the truth about your property. Don't choose an agent because they give you the highest price; choose them because they have a proven tract record.
Back to top...
6. Should I sell my home myself?
Some people are very successful at selling their home themselves. However, it does require work. When people tell us that they are going to sell themselves because they want to save the commission, the fact is they actually are going to earn the commission they expect to save. But not all of it. Many FSBO (for sale by owners) end up paying the buyer's agents some commission, usually 3 percent. One of the biggest problems with an FSBO is the difficulty in showing the home because the owner works. Another complication: it is always better if the owner is not present when a prospective buyer sees the home, but if you're the agent too, you need to be there, and typically at the buyer's convenience. Another potential concern is having a perfect stranger knocking on your door wanting to see your home. Real estate agents sell most homes, so a FSBO needs to market the home to all the other agents for the best chance of selling it. Even in the hottest of hot markets not all FSBO's sell, you have to price your home correctly, make it easily available to show, and market it effectively. And don't get overly emotional or take the negotiations too personally.
Back to top...
7. How much will it cost me to sell my home?
If you list your home or condo with a Realtor and they sell it, the rule of thumb is that your closing costs will be about 9 percent of the purchase price. Typically, 6 percent is real estate commission and 1.78 percent is State Excise Tax. Title Insurance and Escrow fees make up the rest. In addition, other fees can arise for attorneys, pest inspections, and the like, but these can typically be avoided with good planning and preparation.
Back to top...
8. What do I have to do to get ready to sell?
This depends on the market and your competition, but generally, home sellers believe they have to do more than they really have to do to get their home ready for sale. The first impression of a home is when you drive up to it and when you reach the front door. Those areas should be cleaned up to look in good order. Once inside, you should let in as much light as possible and rooms shouldnot be cluttered. Kitchens, particularly, should be free of clutter, and basements should be clean and bright (use 100 watt light bulbs) and have the windows cleaned. Typically, you don't need to paint or put in new carpet. If your carpets are very dirty, you might want to have them cleaned. Spend as little money as possible and don't get carried away. The people who buy your home will get carried away and repaint, put in new carpet, or tear out the old carpet and refinish the hardwood floors, and so on.
You can contact us also at 206.501.8090.
Back to top...
Send me your free comprehensive report "Selling in Today's Market."