Real estate is many people’s largest investment. If you are considering selling your property it is important to have an understanding of the sales process. If you are uncertain of the meaning of any of the terms check our Glossary, it’s actually helpful. This is a quick summary of a complex process. If you have questions be sure to contact us.
DETERMINING VALUE: Often owners like to track the market and see how much other properties are listed for. This can be a helpful starting point but is only the beginning. Most often it is necessary to contact a professional trained in establishing value. Appraisers do this for a fee, normally several hundred dollars. Real estate agents also evaluate property and do it as part of their overall service, normally without a fee.
Let’s discuss a Mount Shasta home to understand how this works. There is nothing inherent in a house that makes it a certain value. If you were able to magically transport a Mount Shasta home to Eastern Oregon it would be worth much less. If you could send it to Marin County it would be worth much more. The key is that the value is relative to what other similar, local homes have sold for.
Our first step in doing an actual comparative market analysis is to gather the details of the subject house including square footage, quality, parcel size, location, etc. Next we find other Mount Shasta homes that have recently sold and are similar to this one. We compare the various attributes of each house to the subject, adding or subtracting worth as appropriate. This is not always easy since there is a great diversity of Mount Shasta real estate and only a limited number of sales, often leaving room for subjectivity.
PRICING realistically is extremely important. If it is too low you will not obtain the full worth. If it is too high no one will not look at it. Generally the latter is the problem. Sellers often believe that if the asking price is too high a purchaser will just make a lower offer. This is true but they will make the offer on the property with the best value. If there are two similar homes and one is priced $50,000 higher they will offer on the lower one figuring they can get it for $50,000 less than the other.
Pricing too high in a declining market is a real concern. By the time the owner lowers it enough to get it sold values have dropped and they end up getting much less than they would have had it been right from the beginning. It is not uncommon to “chase the market” lowering it in too small increments over time as values drop. The goal is to be ahead of the curve and get it sold for as much as possible.
PREPARATION: It is often worth spiffing things up to maximize value and salability. This can include anything from a good cleaning to significant fix up work. We try to suggest the least expensive actions that will result in the highest profit. We may simply suggest rearranging furniture to make a room look larger, planting flowers, or repainting the front door. Buying a home normally has a strong emotional component. The better it feels the more we want it. Let’s do all we can to make everyone feel great from the moment they enter.
THE LISTING: This involves the owner signing an agreement with the broker that specifies the terms of their relationship. It includes the asking price, the time period of the agreement, the amount of commission, etc. The agent takes photos, gathers data, and enters it into the Multiple Listing Service to disseminate the information to brokerages throughout the county.
ADVERTISING: Most brokerages will advertise the listing but the methods vary. We normally enter our listings online in Realtor.com, ColdwellBanker.com, Realtymtshasta.com (our site), Zillow.com, Tulia.com, Homes.com, Homefinder.com and a number of others. We also put them in the large ad we maintain in the Property Guide, the main hardcopy media for Mount Shasta real estate and all South County areas. We also often list them in Craigslist.com and use other specialized marketing programs as appropriate.
GETTING IT SOLD: Residential listings are normally put on the MLS tour to give agents from the various offices the opportunity to view them. This allows them to match the real estate with the buyers they work with which hopefully leads to an offer. If so, they prepare a purchase contract which provides the terms of the sale including the amount offered, escrow period, the size of the earnest money deposit, who pays what fees, and much more. The seller’s agent presents them with the offer which they can accept, reject, or counter. Once the parties come to agreement and sign the contract it becomes binding.
ESCROW is opened, the earnest money is deposited, and they begin their inspections and investigations. They may hire a general inspector, structural pest inspector, or other specialists as needed. During the inspection period if they find problems they can request in writing that the owner remedy them or reduce the price. This can begin a new period of negotiation which can result in the continuation or termination of the sale. At the same time, the title and escrow company researches the public records to make verify that the real estate can be correctly conveyed and to alert the purchaser of easements or encumbrances that could affect their usage. They provide a preliminary title report, which summarizes their research, to all the parties involved.
DISCLOSURE: In California sellers are required by law to disclose all material facts (info) that could affect a buyer’s decision to purchase or the amount they would be willing to pay. If it is a 1 to 4 unit residence or manufactured home a Transfer Disclosure Statement is generally required along with various other disclosures. Disclosure is a key element in protection from future liability. Owners are sometimes reticent to disclosure negative conditions. The thing to keep in mind is that if problems are disclosed when purchasers are excited and enthusiastic they often overlook them. If they find out later on their own and believe the information was withheld they may feel cheated. Disclosures should be presented in writing before the offer is written or at the beginning of the inspection period.
FINANCING: If financing is needed, which is very common, they begin working on their loan. They fill out an application, provide documentation, and pay for an appraisal to substantiate to the lender that there is adequate security for the loan. If the appraisal comes in low the buyer may drop out of the sale or attempt to renegotiate the price.
THE MONEY: Before close of escrow all the parties will get an estimated closing balance sheet from the escrow company showing the projected disbursement of funds. The seller will receive upon closing the purchase price less any loans, title and escrow fees, negative tax prorations, back taxes, association fees, buyer credits, repair costs, commissions, recording fees, transfer taxes, etc. Funds are normally paid by cashiers check, wire transfer, or direct deposit. That’s the time to breath slow, calm down, and don’t get too carried away. If they are buying other real estate the funds are transferred directly to the other escrow.
CLOSING: Once the loan is approved, the inspections completed and resolved, and all other concerns addressed escrow can close. This is accomplished by recording the deed. The new owner normally takes possession on that day but sometimes a buyer will be allowed to move in early or a seller will stay after closing, based upon the negotiations.
PROMOTION: This may be the place to stop if you can’t handle blatant self promotion. The bottom line is that we believe in ourselves. We are familiar with our level of training, service, and concern for our clients. We know we provide an exceptionally high level professional support and performance. Ok, you may be thinking we could be a bit prejudiced here so this is a good time to ask around and check out our reputation. And don’t forget – Coldwell Banker Mountain Gate Properties for Mount Shasta real estate and of Siskiyou County.
Be sure to view our Mt. Shasta Area Links for great connections to web cams, schools, recreation, public offices, hotels, highway conditions, events, and much more. The Buying Process, Finding the Right Property, Market Stats, Real Estate Financing, Mt. Shasta Area Info, Service Providers, and the Mortgage Calculator, are also excellent resources. And, of course, check out our Homes, Land, Income, and Commercial listings for Mount Shasta real estate, Dunsmuir real estate, Weed, McCloud, Lake Shastina, Yreka, and all of Siskiyou County.