Real Estate Tips for First Time Sellers

Transcript

Hello to all our viewers. Welcome back to Pink Mic Legal Confessions today. I'm Stephanie Garces Donat attorney and founding partner of Garces Law in Palatine, Illinois. We help individuals build their wealth, protect their wealth with regards to real estate and also estate planning. Now, the housing market right now is doing some crazy shifting and so it once was a seller's market, as many of us remember the pandemic brought out the best part of being a seller that there's multiple people that were looking at your property and whatnot. But now things are a little bit different and so we are in a buyer's market and so today in Pink Mic Legal Confessions episode, I'm going to discuss best position for the first time seller. Perhaps you're an individual that's been listing your house for quite some time and now you're wondering where all the buyers are at, or at least the viable offers. So, we're gonna dive right in to see how you can help you address some of your questions today. Today's topic is real estate tips for first time sellers. And I personally think this is such an important topic to discuss right now because what's happening now in the market, at least present day, is that the rates, you hear it all over the media. They've gone up, they're higher than normal. They're pushing people out of the market. But that's not necessarily true. And I'm gonna explain to you why I know it's not true because we've seen this happen time and time again where the rates have gone up. But more recently, they're starting to fluctuate a little bit. And when we think about rates, mortgage people in the industry, brokers, realtors, everyone in the middle of or preparing for a significant slowdown if it hasn't happened already. Many people felt this little slowdown around the holidays and with interest rates getting significantly higher, actually compared to the last two years, it's no longer a seller's market. And so if you're wondering what a seller's market is, that was when, during the pandemic is a great example. Things were super favorable to the sellers. Why? Because sellers were able to get pretty good deals. Keep in mind that when you think about a market, the market is ever shifting. So don't ever feel this is not something that's going to get addressed. It always gets better. Sometimes it gets worse before it gets better, however, that doesn't mean you can't get a reasonable price for your property, and it also doesn't mean that you can't strike a deal with someone that is interested in buying the home for the price that you want. I have seen the pros and cons to both sides of the interest rates getting a little bit higher than the past couple years. And if you ask anyone in the mortgage industry, they're gonna tell you that if you think about the rates now, historically, they're not that high. And so, for those of you watching that probably bought many years ago, or you and your parents had bought, you probably realized that they bought at a much higher, almost double digit as to what it is now. So that was a thing in the past, but we're gonna talk about the future because what it means now is having interest rates that are higher means as a seller, you need to be prepared. You need to be smart about the timing of when you're listing the property, how you sell the property, stage the property, negotiate. What are some things that can help you give a competitive edge when it comes to this market. And so we're going to review some of the best practices for selling as a first time home buyer. Excuse me. First time seller. And if you're a home buyer watching, this is also helpful so that you understand the seller's position in this market at this time. So, one of the things that I think is really the best way to ensure that you are getting bang for your buck is you really wanna hire a professional realtor. Someone that is very familiar with the area, has proven success in selling homes at a similar value, or maybe even better, in the area. Keep in mind that you are as the seller, you are the client, you're the consumer. You can do your homework. I know, like myself, most of you probably look up your attorney, your dentist, your doctor, your realtor, whomever, the person that cuts your lawn, whatever. You look them up online to see if they have credibility, and to see if they have good reviews. If you had one star as a service that you're looking for, you're probably not going to be too thrilled to work with that person. And so just ensure you do your homework right, because I think when push comes to shove, your experience as a first time seller is super important depending on who you work with. Now, every realtor has the way they do things, whether it comes to communication, how they're gonna list the vision that they see when they list the property. There's so many things that they think about and the professionals now what to do. They've done it before. They have a lot of success. And keep in mind that when we think about when it comes to these reviews and testimonials, they're so important because if you look on my website for example, we have reviews from clients and gracious clients that have given us their reviews and their thoughts about our service. It's the same thing that goes for the realtors that are looking to sell the property. And so, one of the things that comes up quite a lot, and I see a lot is, we actually have people that, they call 'em FSBOs, which is for sale by owner. So FSBO for short. Many people tend to take this as a help my self option type of thing. And I'm pretty sure, if I'm not mistaken, that when it comes to that, you can do it but it's not the best option all the time, especially if you're under pressure to actually sell. Especially if you wanna sell at a high dollar sometimes getting a profession involved really helps give an analysis as to what is the market saying about the property. From what I see, and if you read statistics on people that sell their own home, you'll notice that A) they don't have any visibility in the market. A lot of people go on Zillow and that's pretty much it. Someone that you can work with that has access to greater networks, our realtors are in the business of doing that. They have access to certain private listing networks, they call 'em, or you can actually list the home privately, not in the general market, which actually attracts a lot of buyers and a lot of interest sometimes. And you're more likely to sell when you do something like. But the other thing too is that when you sell on your own, you actually statistically are supposed to be making less. If you look at statistics, it'll say, okay, for those people that are sale by owners, more likely than not they're selling the home for a cheaper price, meaning you could have listed it for higher and gotten a better offer if you just would've hired someone to help you and consult you in that sense. And so those are things I think about when you're thinking about top dollar and how do you ensure this? I never highly recommend you do things on your own. I think always getting a profession involved is the best way, and then that comes in,across the board. But certainly, in the real estate market, especially in the market that we're in now, you definitely wanna try to elicit some help if possible. So that's the first thing I always tell people. Another thing that kind of helps get top dollar and really just helps you sell the property is dress to impress is usually what I say. And so, when you are selling your home, staging is actually a real thing. Nowadays there's so many ways to stage your home and people do it virtually all the time. And depending on who you work with, the realtor, the resources that they have, removing some of the furniture, putting some things in certain places, eliminating the clutter. A fresh coat of paint is like a whole new facial to the home. It really just gives the home of facelift, if you will. But it really brings life to some of these dated rooms, and it really perks up the home appeal. And those are things to think about because when you are thinking, okay, who's gonna buy my house and who's interested? Those are some things that a lot of professionals will suggest to you. And it's never a bad idea because eventually the goal is to sell and to sell quick. you don't wanna stay in the market super long. Another thing that is like under the dress to impress notion is that you can get pictures. You can get pictures of the home. In many ways, indoor, outdoor, to show people online. I think everything is online as well. People don't necessarily make decisions in person as much as they used to before. And so for people to come and see the house, having important pictures, professional pictures, not just ones on your iPhone. The professional picture is really the way to go and it makes a huge difference. People wanna see themselves living in your home, so they don't necessarily care about the square footage all the time. Especially if they're saying, okay, this room, we can do this with it. Or perhaps this is within our budget, and they try to see themselves in the room. And so, getting a reputable realtor often plays the part with that. And sometimes it's even part of their listing agreement, which is the contract that is signed between you and the realtor for their services. And so these are things to consider when you are hiring somebody. And as always, just do your homework. Don't ever be afraid to check to see if the listing agreement that is being presented to you is the one that's normal. and if you have questions about it, you could always call our office. We're happy to review contracts, between you and realtors that you're looking to hire to see what's within the norm, what's custom, and things like. And also one of the things too is money. One of the things that comes up a lot during the listing agreements is money. What is the agreement that you have with the realtor? What are they charging? Is there a fee for this? Is there a fee for that? There are actually some pretty reputable companies, brokerages that have a listing agreement that very much specifies some of the staging that, they would do for you and what it costs, if anything. I think a lot of times people are getting more creative than they used to, and so it's not uncommon for you to see some of these features of staging your home and things like that to be incorporated in the contract and also the percentage of what you're paying them, right? That is a huge, huge thing that you have to watch out for as a first time seller so that you understand what is the percentage that the realtor is charging. And keep in mind as a seller, you pay the commission of both realtors, not just one. I'm gonna say that again. Sellers pay the brokerages that are involved in the transaction. So that means the brokerage that the seller's realtors work for and the brokerage that the buyer's realtor works for. A lot of times there's a common misconception in that you're only paying 2% to one side, but in fact it could be four. It could be five or six depending on your agreement. And so that is also something that is in your agreement with the realtor. And again, someone who is reputable and can really help you is going to be able to explain that without any issues. So just make sure you ask the right questions so that you're comfortable. Now, the other thing that's really important as a first time seller is you need to make the viewing process of the home really easy and convenient. And this is as simple as making sure that, the lockbox on the home doesn't get stuck and there's someone there to open it. This is actually true story. Not me, but I've seen people have trouble even accessing the home. People change their mind really quickly if they can't even access the home or perhaps you're not ready for visitors. Well, that wouldn't be good because now there's no flexibility and the buyer may actually go look at something else. And so these are things to think about. Just being flexible with the showing times can really make all the difference. I mean, not everybody works a nine to five. Some people have different jobs, different hours. So just keep that in mind. If you work from home, is another thing. Allow for showings to be during the day, during the night, weekends. Just try to do as much exposure as you can with the property, 'cause you're more likely to get more interest if you do that. I know a lot of sellers get a little bit weary about people in their home and whatnot, but again, if you have the right team, they can guide you and what needs to take place for you to be able to show that home. So, it's not totally outside the norm. The more appointments that you book, obviously the higher chances you have of someone putting in an offer, which is important because you wanna make sure that you're not only getting the views, but you're getting viable offers. Hopefully if you're lucky, you have more than one offer, maybe multiple buyers that are interested in the property, which is really good because you may actually get your act asking price or more. So those are things that really help navigate some of the processes and make it easy. Everybody wants accessibility and so making it as easy as possible for the buyers is probably the best thing you can do. Another thing that you may consider is when you go on your contract or you're talking through the negotiations, being willing to incentivize the buyer to buy your home is really advantageous. And this comes in many aspects, not just during the negotiations. It could also be after the inspection is taken place and there's more room for negotiation. An advantage with working with a real estate attorney like myself and a realtor, is that we can actually advise you in ways to incentivize the buyer. Really to just stay with you to actually purchase a property. And that can come in so many ways, whether it comes from offering them some funds to cover closing costs or, offering what's called a home warranty, which gives it a warranty on the appliances, for example, for a year. Or you can even offer flexible dates. Some buyers need a little bit more time, so maybe you give them a more flexible closing date. There's so many ways that you can do incentivizing, and it's so important because I think if you're flexible in that sense, you will get what you want at the end. Is that a sold house and a check in your hand, and you can close a chapter of your life. And so those are things that we help guide you and we give you the best advice as possible. One of the things I always like to do is, sellers are always worried about their money. The bottom dollar. Absolutely. You should be worried about that. But you have to remember that this whole thing is an emotional rollercoaster many times for the seller and for the buyer. And so, thinking about the goal in the end of selling the home and incentivizing the buyer along the way so that you still have legal protections for yourself, and also like still making what you wanna make can really be beneficial. That's one of the things we also do as attorneys, we're always gonna incentivize the seller to do things, but only within the legal boundaries of what can be done. So many times, it comes in the form of, we give advice as to what is normal, what is this option? Many people now sellers are doing post-closing possession, meaning they're closing on a Monday, and they don't move to the following Monday. So that means you stay for an extra week. There are things we can do to insulate your limitations from say, insulate you from any legal action, but also because it's technically no longer your home. So those are options and some limitations that come along the way with that. But we still help you in exceeding,your interests and protecting those interests to the best way possible. And so those are the things that we do help with a lot. Numbers. We also help really explain the numbers and so heavy representation all the way through the closing, especially at the closing, is vital to successful transaction. And for anyone that knows this or has been through a process of buying or selling a home in the past, you may agree that many times there's a lot of crazy things that happen in closing day. Anything can happen. And so many times you're hoping that nothing happens, but if it does, we are ready. We do prepare for the unexpected, which is always what we say, but we really do. There's so many ways and solutions to almost every problem out there, and even though it doesn't seem that way in the moment, you're not alone in going in on this. We usually represent you through and through. We take care of any communications with the other side through their attorney. So if we represent the seller, the buyer's attorney and I will be in contact about some of the issues that came up during closing day or prior to. And so having a real estate lawyer that understands this area that isn't just doing this on the side that does this a lot, those are the things that come up. And so having experience and just having good representation to get through some of those issues is really the way to go when it comes to giving your closing and the seller a good experience. And so having peace of mind is really important when you're selling a home, when you're waiting on this transaction to go through. So again, just having the right people in your corner can really help mitigate the issues and give you the peace of mind that you need in the final phase of the transaction. . for those of you that are just joining me now, I'm actually gonna recap really quickly on what we're covering. Today we are covering first time sellers, mostly specifically real estate tips for the first time seller. And first time sellers again, it's nothing to be afraid of. You just need to know what are some of the things that you should be watching out for, but what are some things that'll make your process a lot easier? And as I mentioned, I'm attorney Stephanie Garces Donat owner of Garces Law Firm here in Palatine. And we help people sell their homes, the transaction of it, protect the home, protect their wealth. Specifically today's topic is for first time sellers that are preparing for the upcoming, I should say, increase in rates. Maybe just the rates that have gone up already, but essentially the market that we're in. And so how do you prepare so that you can actually sell for top dollar, but also get a viable buyer, someone that's gonna be interested in buying the home and seeing this all the way through. We always welcome you to join us here by the way, when we do our Pink Mic Legal Confessions, they're on Tuesdays at one o'clock. And we always encourage you to share this with anyone that you think may need help. You can also check it on our YouTube. We have a lot of other topics that we've covered in the past and we've even had guests that are really great, but just keep that in mind as you're going through this. Our legal guidance is for us to use our platform and be able to educate you through the process. So, I wanna make sure we tackle some of the questions that come up when we cover this topic many times. And so, one of the questions that is probably most prevalent, that I see a lot of sellers make is, what does it mean to say a buyer's market? And so, this is a really great question because buyer's markets are basically when the buyer has more leverage than the seller in a market where, for example, let's just say the. Okay. The buyer has so many houses to pick from. Let's pretend that there are only so many houses being sold in your area. And the buyer, let's just say, they have multiple interests in more than one property, and they actually have favorable terms, meaning they know that perhaps, you don't have a lot of buyers to pick from. You might actually think, okay, if I don't have a lot of buyers to pick from, that might be easier, but not necessarily, because now if you have less buyers to pick from, the buyer has more advantage when it comes to negotiations. So, they may offer a lower price knowing that you've been on the market for quite a long time and you don't have any movement on the property. The buyer perhaps has more favorable terms with what's going on in the market. A lot of times there's, when rates go down, there's a lot more inventory. So, let's just say there's a lot of houses in the market because the rates have gone down significantly. Well, there might not be as much interest because there's just so many sellers, and so that is what a buyer's market is. It's like there's just not enough for you to pick from. The seller has a lot more challenges to face when it comes to negotiating because when the market is doing well, the interests have dropped. Most times there's more sellers, more inventory for the buyer to pick from. And so, buyers know that, and so they necessarily have a better upper hand, if you will, than the seller. It's a hard thing to describe because it really comes in different shapes and sizes, but just know that buyer's market means the buyers have more favorable terms to some of the negotiations given what's happening in the market. Which is why as a seller it's important to know when to list your home for what price and some of the negotiation tactics that you can use to make sure that the buyer and you strike a deal. And so that's why working with professionals is always helpful, because even if it is a buyer's market, it does not mean that you're not gonna get a good buyer. It just means you need to be strategic as a first time seller. Going off my last question, another question that we get a lot is, will interest rates impact my ability to sell a house? It can. Yes, absolutely. to say that interest rates don't affect sellers wouldn't be correct. Right now, what's happening is that the interest rates have gone a little bit higher than where they were a year or two ago. And so, there's a lot of people looking but not as many as before because now there's not as many buyers that can afford a mortgage at 6%, 7% that they could have afforded at 3%. And so, the challenge there is that the seller now is forced to sit on the market a little bit longer. Perhaps they don't have as quick of a turnaround as they would've two years ago. And so it does impact the ability to sell quickly. I wouldn't say overall because a lot of people end up taking it off to put it back on in the spring, but to keep in mind that yes, it does impact your ability to sell only because the amount of qualified individuals to buy the home. Not everyone can buy cash. So, keep in mind a lot of people have mortgages. They may not qualify for the same price point that they did a year or two ago. So that really is the challenge right now, and it does impact your ability to sell, but it doesn't make it impossible. So just because it impacts it does not make it impossible. And so we have plenty of sellers that are actually getting pretty good deals right now. And the reason is because, I really mentioned a lot about buyers not being able to be within their budget, but for those that are, for those that actually have money in the bank, as they say, or they are financially stable and are able to afford at 6%, they actually are pretty good buyers because they actually have the money. They have good credit scores, they have the very easy to qualify at this rate, that, is good for the seller because now you're gonna have, you could have multiple buyers that have good credentials to buy your home. And so sometimes it does create a bidding war sometimes. So even though it impacts your ability, it doesn't like basically stop it. If anything, we've had sellers sell for over 20,000 over listing in this market where the interest rate is high. I know that sounds wild, but it's happening. There's a lot of interest out there. So, there's actually good deals for buyers right now to buy the homes. And a good deal for seller to sell the home because you still have this market of people that have the credentials to be able to borrow at 6% and buy your home. So, it doesn't actually mean it's the end of the world, it just means you have to be, again, strategic and you could always try it out and see what happens. So that's just something to keep in mind. So, the other question I get a lot is what does a lawyer do at the closing if I'm a seller? We do a lot, and actually I just came from a closing previous to this, so I'll kind of explain to you the lay of the land. So typically at a closing, we represent the seller, so I'm always focused on the seller's interest. What does that mean? Well, everything from preparing the paperwork for the transfer of the deed from the seller to the buyer, everything that transfer the title to the buyer is what we, do and we actually work with the title companies that help us in the background clearing title. This means making sure there's no claims. Is making sure the IRS isn't owed money. This is making sure that mortgages are paid. If there's more than one mortgage or lines of credit, we get those paid. And so the transfer itself from the seller to the buyer is what we do from a legal aspect, and we just make sure that everything is done clearly and concisely and correctly because even though it seems to be a lot of paperwork and just sign here and sign that. We actually take the time to explain what is the purpose of this document? Why are we having you sign these things, and what does the title company have to do with all of this transaction? And so, we really help explain the process, making it super easy, transparent so that sellers understand the seriousness of clearing the title and transferring it over. And so, we do that to the extent that we're representing the seller. Now, keep in mind, the seller also we're responsible for representing them in that their numbers are correct. We have to make sure that what the numbers are that you're taking away with you as a seller, the check that you're getting at the end, that is the correct amount that you're getting, which is called your proceeds, that they are correctly outlined and that we're giving the proper credits to the buyer. Anything from credits for the taxes, for the negotiations, or what was credited at the signing of the contract. We make sure everything goes smoothly so that you can make sure that you have your final number and that's not gonna change. And so we take care of all of those things. Keep in mind too, if you're watching this video, there are sellers that are in the middle of a divorce. Or perhaps going to divorce. We represent sellers of all kinds. So not just one seller. There could be people that are getting divorced, we help you with that as well, and help facilitate the sale of the transaction with your divorce attorney. So, there's a lot of ways that we just don't, it's not just a first time seller. You still could be a first time seller and have these other issues, but we usually help navigate those. And so, even if it gets complicated, we always can help you and protect your interest at the end of the day. So, we just make sure the transfer goes smoothly to the buyer. That's really part of our work and we hope to save you some money as well. So sometimes, one of the things that comes up is that sellers will need to get a survey, but sometimes the survey is relatively new. And the rule of thumb is typically if it's about six months or newer, you don't necessarily need to order a new survey. That runs around five to $600 depending on the property. And so that's another thing we do. We're always looking for ways to save money for you so that you don't end up having to buy things that you don't need. Another question that we get is, can I change my mind if someone makes an offer that I don't wanna take? Absolutely. To an extent, this is where having a realtor in the initial phases is really important because the realtors talk amongst each other. They have licenses to actually conduct this work in their profession. And so, they are allowed to bring offers to you, and you can accept or deny those offers. Typically, there is no contract in place until you accept an offer. So, if you get an offer as a first time seller and you're not really liking it, you can certainly say, you know what? I changed my mind about this whole thing. I don't wanna proceed. Sometimes though you might not really like the price. Perhaps you want to negotiate further. And so, you can make what's called a counter offer and offer the buyer another price or other terms. And that's also another option if you don't like it. But no, you don't absolutely need to take it. That actually is probably, further from the truth. So, you can actually decide if it makes sense for you, and then if it doesn't, you do not have to take it. So, I do appreciate that question because I think it's one where sometimes you feel like, as a seller, like you're pressured to take the first offer you get. You don't. Especially if it doesn't make sense. So sometimes, again, finances come into play, and you need to see what you're making. So, if it doesn't make sense, then you shouldn't take it. Now, how much do we charge for consultations? So typically for sellers, we do not charge a consultation fee. It's actually free. We actually help facilitate the entire closing, and we usually charge at the closing itself for our legal work. And again, no consultation fee up front. It's completely free. We do explain to you how the process works to make sure you understand what the obligations are through the process. And so, one of the things that I like to make sure that the seller knows during the consultation is what are we expected to do through this transaction? What we need from the seller, whether that's information. We need documents. Sometimes we have to look at certain things in the file. We've had a lot of people this year unfortunately run into issues with title where somebody is an owner of the property, but they had for example a brother that signed off on the deed. We may have to get information from the brother to make sure that he is also in agreement with signing and that we can clear title with his assistance. There's so many things that come up and during the consultation we really dissect what are the to-do lists and what are the things that we need in order to sell the property? Keep in mind also during the consultation, we do try to give you a better high level view as to what it is that you have to pay off. And for those of you watching that have actually done, they call loan modifications. A lot of people during the pandemic did loan modifications. This means you couldn't pay your loan, so you entered into a loan modification. We also help with those because that is part of the transaction. Or if you've had someone pass away recently or someone that is on the title, but you don't know where they went or they've passed, those are issues that we can help with too. And so, during the consultation, we don't just say, this is what we normally do. We look at the whole picture because we actually don't know what we don't know unless we have a consultation. So, you can always contact us to make those consultations for free. And you can also text the line that you see below. You can also text to make your meeting if you're busy, and you don't wanna get on the phone. But we always encourage you to reach out to us because we really do like helping individuals in this process of selling their home and making sure that we do everything correctly because it's really a closing of a chapter for many folks. So, we're excited to help you anyway that we can. So, you're always welcome to watch us here, like I said, one o'clock on Tuesdays. But please know that selling your first home is always really difficult and it can be emotional, and it can be a little challenging. So, we're here to tackle those issues for you and alleviate some of the stress that you have when you have it happen, because everyone knows it could be an emotional process. Like I said, thank you very much for your questions. I really appreciate all of you that are watching all the time with us and following some of our topics. And if you have any topics yourself, feel free to chat me later on today and let me know what you think. I always am looking for new topics and I know right now the market is a little wild, but don't be afraid to list your home because there are buyers, I promise. You just gotta get the right team. And by the way, if you're looking for a professional that's reputable and whatnot, please give us a call because I'm happy to recommend you someone that we trust. So again, thank you again for your time and I hope you have a wonderful day. Thank you so much, and we'll see you on Tuesday next week.