Selling Property in North Carolina

Step 1:  Why Sell

Property Owners choose to sell for one or multiple reasons; a decision to upsize, downsize, relocate, a change in investment strategy, or financial hardships. There could be multiple other reasons as to “Why” at this point you have chosen to sell.  Sometimes property owners decide to sell to “see what the market will fetch.” Whatever the reason, it is important for Sellers to determine the “why” for selling. The “Why” will ultimately determine your goals in selling which will in turn determine whether or not you achieve the intended goals.

Pause here for just a moment. An important question that I ask of potential sellers is, “Do you want to list the property, or sell the property?” This is an important distinction to make and make sure that you are clear on your answer.

Clarity on the question of why you choose to sell your property is essential for determining the marketing strategy and pricing. Write your reasons down and express your reasons for selling and allow us to assist in setting expectations. As your real estate agent, it is crucial for us to understand your goals and objectives completely. The relationship with us as your agent is of a “fiduciary” nature.  Read more here about the agent/client relationship.

Step 2:  Pricing Your Property

Pricing property is more like an art form than it is a science. There is some methodology used in what is called a “Comparative Market Analysis.” Sales history of similar properties in the local market is a very reliable tool in the comparative market analysis. As well, current market supply of similar houses can be used. Adjustments are made in comparisons and then looking at all the factors a price range can be provided as indicators of what a property should sell for within a certain period of time. With that said, it can sometimes be more of an art form than science. Other factors can enter into the equation.  Property Desirability can be a major factor on things such as: a particular street, a view, charm, uniqueness, construction quality and etc. All this means is that there are intangible factors in pricing that can be very subjective.

What can make pricing more difficult is whether the market is in a Buyer’s or Seller’s Market. Generally speaking, it is more difficult to establish a listing price in a buyer’s market. Sale prices for similar properties may have a wider range of sale price due to a sellers having stronger or weaker interest in selling. Also factored into this is the fact that in a Buyer’s market it may take a longer period of time to sell the property.

What is the long and short of this long explanation on pricing? You need an agent that has experience in the art form of analyzing the market, establishing fair market price, and that understands your objectives. Setting the right price is crucial when the property is exposed to the market for viewing. If the property is priced too high and in turn sits too long on the market, negative perceptions can be created. Prospective buyers in turn then ask what is wrong with the property. The end result could be that the seller has to lower the price below fair market price to have the property sell because of any negative stigma that could have been created. Statistics show that when the property is priced at fair market value, the property will sell.

This sparks one other misconception that I have heard repeatedly from Sellers. That is, Buyers are always going to try and low ball the price, beat me down, get it for nothing, and so on. My advice; so what. Lookers and tire kickers are free to offer whatever they want. Set a fair market price with a little wiggle room and hold firm. This creates a win/win for everyone.

Step 3:  Prepare to Sell

Clear the Clutter: Many owners (me included) allow things to accumulate, stuff things in corners, or maybe even out in the open. It goes without saying that a prospective buyer needs to be able to fully view the property without having to step over obstacles. This is the time to get ready to move not after the property is under contract. Clean out the old “stuff” so that the prospective Buyer can see your home as their home. If you are not sure what might be considered clutter, ask your agent.

Fix and Repair: All light bulbs and fixtures should be in working order. Small drips and leaks should be repaired. Make sure that the light switches and outlets are working. No, your home does not have to be in perfect order, but remember impressions are being made when the buyer views the property.

Inside and Outside: It is not enough to make repairs and clean clutter on the inside. First impressions are when a prospective buyer drives by. More are made when they get out of their car and walk to the door. Some buyers never make it inside to see how cute it is.

Find the Papers:

• Survey: You may not have a survey of the property, it will be a very helpful document to share with prospective buyers to clearly establish where the lots lines are located.
• Elevation Certificate: If you live in a flood hazard area chances are that you have this somewhere. This will be helpful to the prospective buyer in establishing insurance cost.
• Utility Bills History: While everyone has different levels of “comfort”, a common question or request of prospective buyers is, “What are the average utility bills?” Be prepared and have the information pulled together for your agent.
• Property Tax Statement: Buyers will want to know what the annual property taxes are. This is important information to provide the Buyer
• Insurance: In particular for coastal properties, buyers want to know what the cost of insurance is going to be. Have this ready for your agent.
• Loan Statement: The primary reason for having this ready is to provide a closing attorney the information needed to obtain your loan payoff and ultimately for you to get your check!
• HOA Information: If your property is subject to a property owner’s association covenants and/or assessments, this information will need to be disclosed to all Buyers. Disclosure Information Here

Step 4:  Let’s Get Your Property Listed

A lot of work goes into getting ready to list your property. You as an owner play an integral part in getting to this point.  However, the good news is that we are here and ready to assist.

As one can imagine, there is paperwork that has to be completed and executed. We have all of the forms. In fact, for the most part all Realtors in North Carolina use the same forms. They are “boiler plate” in nature and fill in the blank. As your agents, we will complete the forms using information that you have provided and then review the forms with you prior to executing the forms. We want you to be totally informed about your rights and obligations as a seller. See sample forms here.

With the listing agreements executed, we are ready to show it off to the Buyers. Read more here about what happens next.

Being agents with Landmark Sotheby’s International Realty, we have many tools to literally have your property exposed to the world. It’s no secret that the internet is the number one medium where prospective Buyers are exposed to your property. As you probably already know, buyers have a major proliferation of information to view. Bev and Greg will make your property stand out above the rest in this vast sea of information. (Side Bar:  Greg has a little bit of “geek” in him and is always working to stay on top in this arena.) Here are a few of the things we do to get your property noticed:

• Hire a professional photographer to take pictures of your home. We focus our energy on marketing your property and trust professionals to take the pictures. We are there to insure that everything is just right. This may take a few days to have scheduled and is dependent on the weather. We want your home or land photos to be taken at their best.
• We list your property in the local multiple listing service and insure the accuracy of information. This includes wordsmithing to paint the verbal picture for your property. Agents within our multiple listing service are one of our target audiences.
• Signs and lock boxes for agent access are place at the property.
• Your property will be featured on at least 16 of the top real estate industry websites. Even more exposure is provided for homes that are over $1 Mil.
• Depending on the property, we may do open houses.
• We spread the word via electronic mailing. One of the advantages of working with Bev and Greg is that we have a large network of buyers and past clients that we work with where your property is exposed in other social media vehicles.  Combine that with real estate leadership recognition by our peers and you have a great marketing package.
• We have other venues/options in our tool bag depending on the property. We have to have some trade secrets!

This is the day that you have been waiting for. As your listing agent we will contact you to let you know we have received an offer for your review.  In most occasions it is received and transmitted to you electronically. Electronic signatures are becoming the norm in our business for the execution of transaction related documents. You receive the offer to review and then we will talk with you by phone or in person if possible to discuss all of the terms. When we receive an offer, it will be on a pre-printed form. We have provided some additional information for some of the terms and provisions within real estate contracts. Click here to see definitions on common terms within the Offer to Purchase and Contract. You can also download or view a sample of the actual Offer to Purchase and Contract form.

The offering price is certainly one of the main terms of an offer to purchase and contract. However, there are other terms such as, but not limited to:

• Due Diligence (Funds and Time Period)
• Earnest Money (referred to as EMD)
• Closing Date
• Seller Paid Closing Costs if any
• Home Warranties

Most Offers to Purchase and Contract will require some negotiation. As your agent we are your liaison for offering and receiving counter offers to and from the Buyer and/or the Buyer’s agent. Negotiations may continue until all parties have reached agreement and have executed the Offer to Purchase and Contract. It is not a Contract until all parties have signed and acceptance has been delivered.

Contract negotiation is where you gain great benefits with us as your agent. This is where experience in the industry benefits you, not just industry experience, but being good negotiators. We negotiate on your behalf to get the highest and best offer and terms. Once everything has been signed, now it is time to start preparing for closing, but don’t start packing just yet.

Unfortunately, once the Contract is executed, the Seller has little control until closing. The Buyers are the driving force getting to closing. Generally, the Buyers or their agent will be causing inspections to be completed on the property, having appraisals done, surveys, and etc., all a component of the Due Diligence period. If the Buyer decides for any reason that their discoveries do not warrant consummating the purchase, then they can walk away from the contract for any or no reason. Once it appears that the Buyer is going to consummate the closing, there is work to be done on the part of the Seller beyond finalizing the move plans.

It is customary for the Seller and/or the Seller’s agent to work on the Seller’s behalf to have a Deed and Lien Waiver prepared along with a few other documents prepared for the Seller’s signature. These documents will need to be notarized and cannot be done electronically. The good news is that the documents are not needed until the day of closing so they are one of the last preparation items. The Buyer’s attorney may prepare these documents for the Seller with the cost of preparation being deducted from the Seller’s closing proceeds.

After the Buyer has inspections completed, it should be expected that there may be a request from the Buyer for the Seller to make discovered repairs. A formal request form is typically used. The form does include provisions where there could be a cash settlement in lieu of causing the repairs to be made. Repair requests are all negotiable. Remember, the Buyer also has the option to walk away and exercise their rights to terminate the Contract.

The green light is given for closing. The Seller does not have to physically be present for closing and most often is not.  A settlement statement will be provided from the closing attorney. As your agent we will be responsible for insuring that everything is correct before you sign. This signature can be done electronically or by sign and scan. Closing occurs, you hand over the keys and you are done. Funds from closing will most often be available within a few hours after closing, but can take as long as 24 hours.  These funds can be picked up from the attorney, delivered by courier, or by wire transfer. The latter two options will most likely incur additional fees charge to you by the closing attorney. Congratulations, you have sold your property and on to make your next real estate investment!  For more information on closings, please read this brochure.

For the Seller, there are not a lot of line items of expense when compared to the Buyers expense, however, the Seller does end up with a large(est) share of the closing expense from a financial perspective. Here are the typical Seller paid closing costs:

• Sales Commission: as previously agreed within the listing agreement
• Document Preparation: Fees paid to the attorney that prepares the Seller documents (deed, lien waiver, and etc.)
• Excise Tax: Sometimes referred to as deed stamps.  Generally, these equal to .2% of the purchase price.  For example, if the sales price is $600,000, the deed stamps will equal $1,200.00 (600,000 x .002 = 1,200).
• Property Tax: The Seller is responsible for the annual property tax on a pro-rata share basis with the buyer.  The Seller is responsible for the pro-rata portion commencing January 1 thru the day of closing.
• Loan Pay-off: Though not an expense to the Seller, the pay-off of any mortgages/loans is a deduction from the Seller’s settlement proceeds and will be shown as a separate line item.
• Wiring or Courier Fees: Fees charged to wire or express deliver closing proceeds to you.