Step-5: Frequently Asked Questions

Selling a Home- FAQ1. Once we establish the Listing Price, can the Price be changed?
2. Should I be available at the Home when potential Buyers visit ?
3. How effective is it to have an Open House?
4. If I don't have an acceptable Offer within the first 30 days, What does that imply?
5. What expenses am I responsible for when I sell my Home.
6. Do I have any Security concerns about letting potential Buyers visit my Home when I am not here?
7. When I receive an Inspection Report from the Buyer with a list of items to be corrected, I am I obligated to fix all of the requested items?
8. If the Appraisal prepared for the Buyers Financial Institution does not support the agreed Sale Price, What happens?
9. What does it mean to have a "Cloud on the Title"?
10. I have read newspaper article's refer to the Median Price of a home vs the Average Price of a home, what is the difference?
11. What is the difference between the Square Feet of my home and the Finished Square Feet of my home?
12. What is the Seller's Property Disclosure form?
13. Am I affected by the Lead Base Paint disclosure rules.
14. How do I determine the Taxable Gain on the sale of my home?
15. What is the difference between a Listing Agent and a Selling Agent.

Once we establish the Listing Price, can the Price be changed?

YES - The initial listing price is a very critical component in a successful sales transaction.  The first 30 days on market will be your best in terms of activity and you really want to start out a the optimal price.  If you haven't gotten an offer in the first 30 days, you definitely need to have a pricing plan in place that will define the appropriate corrective action needed to generate an offer.  One of the biggest mistakes sellers make is to let their home "stagnate" by not keeping up with what the market is telling them.  Feedback from other Realtors and prospective buyers is a super important aspect of price analysis.  I work hard to get this feedback for you and will keep you posted on what they are telling us. 

In very simple terms, your home, my home or any other person's home, is worth what someone is willing to pay for it, and the best way to achieve the goal of selling is to price it correctly at the start!

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Should I be available at the Home when potential Buyers visit

NO - When potential Buyers tour your home, they are there for the purpose of determining if your home meets their needs.  The buyes and their Realtor wish to be totally unencumbered in speaking objectively about the home. Your presence can prevent Buyers from speaking openly about the home.  A number of studies suggest that your presence actually precludes the buyers from "visualizing" themselves living in the home.  Having to leave for a period of time when there is a showing is one of the most arduous tasks involved in selling but it is super important.

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How effective is it to have an Open House?

ieDEPENDS - Many factors are at work here.  More often than not, an oepn house will draw curious neighbors and a segment of folks affectionately called "tire kickers" but not often folks that are qualified buyers.  The price range, location, style of home and activity level will determine if an open house tactic is needed.

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If I don't have an acceptable Offer within the first 30 days, What does that imply?

It depends!  As stated earlier, price should be your first concern.  In addition you may need to look at the way the home shows, consider professioanal staging and carefully evaluate the feedback to see what adjustments you are willing to make to insure the home is correctly prepared.  Again, this is an area that you and I would be discussing carefully and thoughtfully.  If we have a solid plan of attack this will not be a problematic step in the process.

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What expenses am I responsible for when I sell my Home.

Title insurance policy; payoff of your existing mortgage(s) including prepayment penalties, if any;
Broker's commission; unpaid property taxes for the current year; repairs which you have agreed to do through the inspection process.  The title company can provide a "net" proceeds analysis for you as soon as you have a solid sales price.

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Do I have any Security concerns about letting potential Buyers visit my Home when I am not here?

Any Realtor wanting to show your home must register with my showing service and they will be checking the status of the Agent's license etc.  A thorough record is kept about who is allowed to enter the home and at what time they do so.  Good common sense says you shouldn't leave valuables out in plain site that could be put in a pocket or purse easily.  You do not need to panic about this issue just be careful with the small valuables that we all have in our homes.

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When I receive an Inspection Report from the Buyer with a list of items to be corrected, am I obligated to fix all of the requested items?

All inspection items fall into one of two categories: 1. Health and Safety issues and 2. Cosmetic issues. Generally, health and safety issues should be repaired; "cosmetic" items require a judgment call. If you don't complete the Health and Safety issues, the Buyer can void the contract and you will be faced with the same issues with the next Buyer. Cosmetic items are a function of cost and ease with which you can find a new buyer without fixing the items listed. Many times, the issues can be resolved by agreeing to a monetary settlement.  Again, this is an area that I will assist you with in terms of carefully looking at all appropriate alternatives and taking a course of action that will get you the results you want and need!

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If the Appraisal prepared for the Buyers Financial Institution does not support the agreed Sale Price, What happens?

The first step is for us to discuss the basis for the Appraisers opinion with the Broker representing the buyer, who in turn will be talking with the buyer's lender. If we cannot reach a satisfactory solution, then either the buyer is required to come up with a larger down payment or the seller needs to agree to reduce the price. If all else fails, then the contract will be void, and the marketing efforts to find a new buyer continue, however, the appraisal will set a benchmark for a specified period of time that cannot be ignored.  This happens on rare occasion and is further justification for setting a reasonble price in the beginning.

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What does it mean to have a "Cloud on the Title"?

During the closing process on the sale of your home, you are required to provide a Title Opinion stating that you have the ability to convey Title in the property being sold free and clear to the buyers. If during the examination of Title, it is discovered that an encroachment , lien or easement on the property has been filed with the county the result is a "Cloud on the Title". These items must be resolved prior to completing the sale of the property.  You can be assured that I can help you find a title company that will be responsive and responsible.  If you want a "primer" on title work let me know and I can send a brochure explaining the process to you.

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I have read newspaper article's refer to the Median Price of a home vs the Average Price of a home, what is the difference?

These statistics are often referred to as a means of indicating the trend of the housing market pricing. The median price is the midpoint of all homes sold in a given period. Midpoint means half the homes sold for higher prices and half the homes sold for lower prices. The average price of a home is calculated by adding the price of all homes sold and dividing by the number of homes sold in the same time period. In a given period, the average home price may increase if fewer but most expensive homes sold, while the media price of homes may not be appreciating. It is helpful to understand the difference when establishing a price for your home.  You will see this analysis in the CMA I provide to you.

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What is the difference between the Square Feet of my home and the Finished Square Feet of my home?

Square feet as generally defined in the greater Denver area of Colorado includes all the square feet "above ground". Basements are not included the stated square feet for a home. If all or a portion of the basement is finished, this amount of square is added to the square feet of the home and is called the Finished Square Feet. The one notable exception to this rule is a "walk-out" basement, in which case the finished square feet may be included in the square feet of the home.

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What is the Seller's Property Disclosure form?

This legal form is completed by the seller of a home, and should be provided to any prospective buyer. The seller uses this form to provide notification to buyer about the condition of the home including ALL KNOWN material defects, past and present.  The Seller's Property Disclosure exists to provide insight and understanding for all parties involved in the transaction.

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Am I affected by the Lead Base Paint disclosure rules.

If construction of your home commenced prior to January 1978, you are required by HUD to compete a Lead Base Paint disclosure form prior to entering into a Contract for the Sale of your home. This is a federal safety issue and is highly regulated by the federal government.

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How do I determine the Taxable Gain on the sale of my home?

This is a matter for you to discuss in detail with your tax advisor. As a general rule, the gain on the sale of your home is determined by subtracting from the Sale price of your home, net of closing costs and commissions (excluding payoff of financial encumbrances) the price at which you bought the home plus any "capital improvements" you have subsequently made to the home prior to closing on the sale of the home. Many other factors affect this calculation, especially if you rented the property for a period of time while you owned it.  Again, you will want to speak in detail with your tax accountant to know exactly where you stand on this issue.

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What is the difference between a Listing Agent and a Selling Agent.

The LISTING Agent is the Real Estate Company (or individual) you select to represent your interests exclusively in the sale of your home. The SELLING Agent is the Real Estate Agent which actually brings a bona-fide Buyer with a Purchase Offer to Buy your home. Usually, the Listing Agent and the Selling Agent are two separate entities, although both the Listing and Selling Agent may on occasion be the same.  In Colorado, we have some very definitive rules regarding "Agency" and I can provide you with written explanations of your options.  It sounds more daunting than it is in reality.

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NOTE: The questions and answers above are provided for your general information only. I do not provide Legal or Tax advice. You are strongly recommended to seek Independent Legal or Tax advice for any matters pertaining to your specific circumstances and conditions.

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