MyTransaction: Easier than you might think.
One of the things about which we most want to educate you is the
transaction process, something which seems daunting to many
people. The process is not that complex, but the stacks of forms
required by real estate agents, lenders, title insurance companies, and
escrow/closing companies or attorneys often make transactions appear
To simplify a real estate sale and purchase process, let's break it
down into ten easy-to-follow components:
1. Decision to Sell
3. Repairs - Checklist
4. Disclosure Statement / Form
5. Listing - FSBO or Agent
6. Offer / Buy-Sell Contract
7. Title Commitment (Report)
8. Renegotiation (if necessary)
9. Escrow / Closing
10. Moving and Storage
What does that word really mean? Get to know the Realty and the
Reality of Real Estate Terms with the MyREALTY.com
Step 1.) Decision to Sell
Sometimes circumstances make the decision to sell easy and sometimes it
takes late nights of debate, culminating in an endless tally of pros
and cons. Before you call a real estate agent or list your
home for free on MyREALTY.com
, consider these important questions:
- Are you sure you
can get a price that you need in your current home?
Step 2.) Preparation
- Are you sure you want to start out in a new neighborhood?
- Can you afford the home you want to move into?
- Have you considered an addition or remodel?
- What about the move itself… oftentimes a lot of effort?
Have you budgeted for the move?
- Are you prepared to clean, repair, and stage your home
thoroughly for a sale?
- How will you market your home?
Prepare your home for sale by making both the inside and outside appear
as pleasing as possible. Remember, you must strive to achieve
that each potential buyer experience "the Moment" when they come to
visit your home.
Any and all necessary repairs should be made prior to listing your
property. Download a convenient MyREALTY.com
— Are the grounds in perfect shape? You must
eradicate the yard of weeds and dandelions, the trees and shrubs should
be pruned, there should be absolutely nothing in the yard, and the
grass should be freshly mowed and completely green (lots of water and
fertilizer in the weeks before the sale.)
— Get rid of the clutter. A home with too much clutter is like
a date with too much makeup. Keep your home décor simple.
It's worth it to rent a storage facility to move the extra "things" out
of the house and garage and away from the buyer. Take down family
photos and put away other personal items. They only distract the
buyer. (And your Neil Diamond record collection might be too
polarizing for the general public!)
— Ensure that your walls are not only clean, but also freshly
painted wherever necessary. Paint is the best investment for a
greater return on the sale of your home. A $1000 in paintwork can
bring another $10,000 in purchase price. Don't go for trendy
colors. Keep them neutral. The buyer can add the latest
shade of orange when she moves in.
— Refinish your hardwoods and replace worn
your carpet is in good shape, ensure that a professional cleans
it. If it is showing wear, you should strongly consider replacing
it. I've often heard sellers say they would give a carpet
allowance so a buyer could select their own carpet; however, buyers
want a home that is ready to move into today. Visit several
carpet retailers to find what the popular colors and patterns are, then
select a neutral and light colored carpet for the entire house.
It is especially offensive for non-smokers and non-pet owners
to walk into a home that has smoke and pet (especially cat)
odors. The only way to ensure a great smelling home is through
cleaning the walls, a fresh coat of paint, cleaning the drapes, and
replacing the carpets. When buyers are coming over, it might be a
good idea to brew some coffee or cook some brownies. Nothing
welcomes someone home like dessert and a cup of joe. Do not,
however, go overboard with the incense, candles and sprays.
— It's in your interest as the seller to disclose
everything you know about the property you're selling. With
market comparables and the entire transaction history of your home, a MyREALTY.com
gives you the power to price your home
Step 3.) Repairs
In addition to cleaning, make all necessary repairs. Repairs will
include holes and scratches in the walls and flooring, leaking faucets
and moldy tile grout in the kitchen and bathroom, and larger repairs
like the broken garage door opener. If you don't like repairs
hanging over your head, potential buyers won't be interested in your
repairs hanging over their heads either.
We suggest you take our inspection checklist and peform your own
inspection. Take one trip to the hardware store to purchase all
materials and don't stop repairing until all items are complete.
If you don't have time, we suggest you pay for a home inspection and
hire a handyman to make the repairs.
Here are some other little investments that bring big returns:
- Replacing dirty or
old light switch covers
- A new coat of paint
- New stain on wood features like decks and railings and trim on
the windows and walls
- Shelves: for extra storage in closets, garage, and storage areas
- New and updated light fixtures
- Curtains - professionally clean or replace
- Thorough cleaning - inside and out
- New doors, saving the best, most secure for front
- A nice, raked yard is a wonderful and very inexpensive fix.
- Replacing broken window panes
Here are some bigger projects that have proven worthwhile:
- Put up a new wall
and make a room (often doable for around $1,000)
Simple Ways to Sell
Your Home Faster
- Take out a wall and make a bigger room (plan for this or it
could get ugly)
- Refinished cupboards
- New tub and shower. If they're functional, just not
get a new shell
- Add a garbage disposal
- Gazebos always impress
- See if more closet space is feasible
- New, modern appliances (refrigerator being most important)
With the average number of home sales in 2006 down 20 percent, and the
market slipping away from sellers in favor of buyers, your home may
need more than just a fresh coat of paint. Here are some
suggestions on how to move your home off the market:
Step 4.) Disclosure
- For about $300, you
can get an inspection of your home before you even
talk to your first interested buyer. Getting your own inspection
shows you have nothing to hide. Have a convenient list of any
problems that came up during the inspection and what you've done to fix
them. Some of these issues you may choose to sell with the house,
but at least you're being forthright.
- A home warranty. For about $400 you can compete with the
homes on the market with a limited home warranty that covers all major
- Have you heard about the recent phenomena of staging?
are looking at ten or twelve properties in a day, you want yours to be
the most memorable. Staging companies often move trendy
furnishings into a home and find ways to best accentuate the qualities
of your home. According to statistics from Boulder, CO, staged
homes sell 46% faster and staged condos sell 62% faster than homes
- Offer to pay the closing costs. Buyers are becoming savvy
the real estate transaction process and an ad that offers to pay
closing costs will serve a seller well. According to a National
Association of Realtors™ survey, offering to pay closing costs was
recognized as a better reason to buy a home than paid vacations, free
upgrades, free appliances and flooring credits.
- Make sure all of your ads, like fliers and your free
, include the price of the property as well as the square
footage. Buyers don't want to dig for information. Listings
without price and square footage are more likely to be skipped for a
listing that offers that information. Try as much as you can to
avoid too many, if any, restrictions on when buyers can see your home.
- Do not overprice your home. In a buyers' market an
home will sit on the market for a long time, eventually costing the
owner more in expenses than they would have made if they'd priced their
home appropriately and sold it sooner.
- Small details usually bring you the greatest return.
- Planters with flowers and trimmed trees immediately make your
property's first impression more pleasing on the eye. And if you
do the work yourself, you haven't spend much more then twenty bucks.
Seller should complete a disclosure form, which shows all defects that
you are aware of. To ensure you have no legal battles after a
sale, we highly encourage you to Disclose! Disclose! Disclose!
See a sample
and order your disclosure form.
Aside from avoiding the nightmares of litigation, buyers gravitate to a
seller who is open about any problems with the property.
Step 5.) Listing - Agent versus FSBO
Whether for sale by owner (FSBO) or with an agent, we can maximize the
exposure of your home.
More than 80% of interested buyers start their search on the
Internet. Get a FREE listing in
front of millions looking for their next home on the Global Listing
More than 70% of all homebuyers start their home search by looking for
yard signs. The MyREALTY.com
yard sign is
professionally designed and tested to stand out and sell.
Would you like to hire a real estate agent or are you ready to go it on
GLS vs MLS
GLS™ stands for Global Listing Service™. MLS is the Multiple
Listing Service, which is a database of properties for sale in a
region; there are as many as 1,000 disparate MLS in North America. The
Global Listing Service gives you and your agent more control in finding
a wider variety of properties on the market. MLS has served well
during its reign as the go-to real estate listing service.
However, after repeated calls for a more user-friendly database, one
that includes all types of properties on the market and not just those
under agent contract, MyREALTY.com created
the Global Listing
If you decide to work with an agent, remind him or her to place your
home on the GLS. It's free on
decided to go it alone and sell by owner, then it's easy to post
your Free Global Listing yourself.
For Sale By Owner vs. Agent
is a big supporter of real estate brokers and agents,
especially when a large group of agents belong to the local MLS.
When you hire an agent and she places your property on the MLS, you
have essentially hired hundreds, if not thousands of agents to bring
you a buyer. However, we strongly encourage you to have your
agent post your property on the GLS, in addition to the MLS, in order
to maximize your exposure.
An agent should also bring a lot of experience to the process, he or
she will likely place a lock box at your home to let other agents show
your property, as well as, manage the paperwork and transaction
process. If you've decided to post your property with an agent,
we encourage you to interview three top agents and select the one that
best suits your needs.
You can find agents at
MyREALTY.com's service provider page
, and you
should also get referrals from people from the area you are moving
into. Some of the top things to look for in agents are:
- Area of
expertise? Does he or she concentrate on medium priced properties
in your neighborhood, luxury properties on the other
side of town, or commercial and investment properties?
a list of the right questions to ask your Real Estate Agent
- Home Sales experience… how many properties has he or she sold?
- Average time of sale for the homes they list?
- Average % of listing price that his or her listings sell for?
- Years of experience? There is an awful lot of agent
the real estate industry, so seek those with the most
Experience also translates to network and influence,
ultimately meaning access to more homebuyers.
- Written Comparable Market Analysis (CMA). Did he or she
bring one to the listing presentation, in addition to their
- Designations: Realtor designates that she belongs to the
National Association or Realtors - as discussed earlier. GRI
forGraduate Realtor™ Institute, CRS stands for Council of Residential
Specialists, CRB stands for Council of Real Estate Brokerage Managers,
ALC stands for Accredited Land Consultant, and CCIM means that he is a
Certified Commercial and Investment Member, who most likely specializes
in commercial real estate or
- Ask how he or she intends to market your home. Many
agents typically say that they will put your property in the MLS, place
a yard sign, and put your property on the Internet. The key
question here is, "where on the Internet?" Simply putting it on
personal or corporate website is not enough; request that they also
post your home on the GLS. Some agents will also market your home
the local newspaper, but more and more classified advertising dollars
are being driven to the Internet.
- Once you select an agent, you will likely be asked to sign a
listing agreement, which usually has a 180-day term.
- Make sure you disclose and exclude any parties, whom you
may have already talked to about buying your property.
If you decide to go it alone (FSBO), you are able to post your property
for FREE on the GLS and purchase additional marketing tools, like yard
signs and virtual tours, at MyREALTY.com.
1. When considering offers
from buyers, ask to see a copy of their pre-approval
ensure that you don't have to lose
the home sale after several weeks, because the buyers could not secure
financing for your home.
2. Be familiar with the federal laws and other potential legal
- Lead based paint,
typically found in homes manufactured before1978.
- Asbestos, typically found in older tile/flooring, siding,
insulation, adhesives, etc..
- Pedophiles (and other sex offenders)
- Race discrimination
- Underground storage tanks
- Mold and mildew
Determining Asking Price
What should my asking price be? A recent Realtor™ survey showed
the number one reason a home doesn't sell is because it's perceived as
being priced too high. A well-informed buyer already knows the range of
the asking price. You likely have comparable properties and sales
in your neighborhood. An agent can help provide a comparable
market analysis (CMA), and you should also purchase
a complete property
report at MyREALTY.com.
Opinions of market value vary. If you truly want to sell your
home quickly, you should price your home to sell. I know of many
agents that would like to post your property - oftentimes at whatever
price you think your home is worth. Whether you market your home
alone or through an agent, do your research and know your home's value
before listing. Don't forget to factor in the cost of marketing
your home - including commissions, title insurance, closing costs, etc.
Sit down and write out the strengths and weaknesses of your home.
Only you know what your home's strong sales points are. You can
type up your own one page brochure, which includes all of the key
marketing points. We also encourage you to write a simple
paragraph that explains your property's strengths. This will be
used for listing your property, and it will be a great tool for an
agent to list your home.
our complete Property Report, which includes a valuation.
- Get a competitive market analysis from an agent. This
free if the agent is trying to earn your business. Some agents
charge $100 or so if you don't use them.
- Obtain a complete Appraisal.
The Taxman Cometh
One of the most renowned benefits of home ownership is the ability to
write off on your taxes the interest you pay on your mortgage.
Not only can you deduct the interest you pay on your principle
mortgage, but any of the interest you pay on a home loan or home equity
line of credit. But what about the seller? Know this:
Internal Revenue Code 121 allows for a one-time, tax-free principal on
residence sales profits up to $250,000 for an individual and up to
$500,000 for a married couple filing their taxes jointly. All you need
to do is occupy the home as your principal residence at least 24 of the
last 60 months (2 of the last 5 years) before its sale. Here's
how to become a serial home seller, making tax-free profits just by
fixing and flipping.
1. You can use
IRC 121 to your benefit every 24
SECTION 1. PURPOSE This
revenue procedure provides guidance on the application of 121 and 1031
of the Internal Revenue Code to a single exchange of property.
SECTION 2. BACKGROUND.01
Section 121(a) provides that a taxpayer may exclude gain realized on
the sale or exchange of property if the property was owned and used as
the taxpayer's principal residence for at least 2 years during the
5-year period ending on the date of the sale or exchange.
2. Find a house in a decent neighborhood that needs work
(never a condo as you can't fix n' flip the
entire building!) and find
cost-effective ways to fix it up.
3. Avoid high crime areas (aka "bad neighborhoods") and homes
that need too much work and you'll enjoy tax-free profits
4. Keep in mind that you'll be moving a lot.Here's the official
Section 121(b) provides generally that the amount of the exclusion is
limited to a one time $250,000 ($500,000 one-time exclusion for married
couples). You want to read the whole thing? Knock yourself
Step 6.) MyOffer - Writing a Buy-Sell
Once you've accepted an offer, it's time to create a contract.
Who can write a sales contract? Anyone.
A real estate sales contract simply does the following:
- Identifies the
property being sold
- Names the buyer and seller
- States the amount of money the buyer will pay (consideration)
- The date when title to the property will be exchanged for the
And now some smart additions to any real estate sales contract:
- A deposit
explanation that declares how much the deposit will be, which will
accompany the contract and who will hold the deposit money.
When and where the closing will take place.
- If and when the property must be inspected or if it is to be
sold "as is".
- If any warranties are included with the property.
- Whose insurance will cover the property until the closing date.
- Notice of any disclosures on the property (lead paint is the
big one, but anything, ANYTHING notable that could adversely
value of the property should be identified).
- When will the buyers take possession?
- Who will pay for pest, well, septic and other inspections,
buyer or seller?
- What is included and excluded with the property?
- Any provisions for arbitration and disputes.
- Any other contingency you can think of. Who will pay if
there is termite damage? If the roof is old, will the sellers
- Clear the title. Does the buyer own the property
A real estate contract must also say something to the effect that "This
is a legally binding contract, so if you do not understand it, please
get legal advice before signing."
Some notes: including a plat map with the county's official
location of the property is a good idea. Streets change and so do
addresses but a surveyed plat of the property will remain the
Homes and buildings are often referred to as "improvements" and land is
called "real property."
Step 6.) MyTitle Commitment - Preliminary
As a seller, you typically pay for title insurance, which provides the
buyer assurance that he is getting clear title to a property.
Title insurance is prepared by title company in preparation of title
insurance policy. From a cost perspective, it is pretty much a
commodity since rates are filed with the county and/or
state. However, service and claims provide differentiation.
Most sellers (and buyers) know very little about title companies and
simply rely on their agent to suggest a title company.
A preliminary title report is the document, which is prepared on a
property once an escrow is opened. It provides all kinds of information
about the property that is essential for a buyer to see, such as
who owns the property, what kind of exceptions to title are currently
of record (like easements, liens and encumbrances).
The preliminary title report then becomes the final title report, on
which title insurance is based. In addition to specific exceptions to
title that will be listed on a title report, it will also list standard
exclusions from coverage.
In almost every real estate transaction, the buyer has the right to
approve or object to the preliminary title report and back out of the
deal unless the seller can provide clean title by eliminating certain
exceptions to title prior to closing. But, a buyer will only have a
short period of time during which to act on the preliminary title
So, it's extremely important for a buyer to carefully review a
preliminary title report immediately and to take appropriate action if
there are any unacceptable exceptions to title -
including the hiring of a good real estate attorney.
respect to Title Insurance, who is insured?
The lender, any future investors and, if an owner's policy is issued,
those buying the property.
amount does it cover?
Typically it covers the amount of the mortgage and the sales price for
is being insured?
Clear title to the real property. It insures against a prior
owner (or relative of a prior owner) coming back to try and claim
ownership of the property.
do I need to acquire title insurance?
You must have proof of that property taxes were paid, have the signed
Sellers’ (or Owners') Affidavit explaining that the seller or owner is
not aware of anything that would adversely affect the title.
Also, any open mortgages, judgments or liens that the abstractor found,
bearing against the property, must have been canceled and a survey from
a licensed surveyor or a survey waiver must be signed at closing.
Step 8.) MyRenegotiation
If you've found issues with defects in the house (from disclosure
statement, home inspection report), clouds on the title (from title
commitment or your own due diligence), etc., you need to negotiate any
remedies prior to the date specified in your buy-sell contract.
We recommend that you have major items repaired by the seller, as
opposed to taking a reduction in price, as the actual cost may turn out
to be more than the estimated price - especially when it comes to new
roofing, foundation repairs, or mitigation of mold/mildew, radon,
Step 9.) MyClosing
Typically, the closing is coordinated by an escrow agent from a title
company, although an attorney is required in Alabama, Massachusetts,
Delaware, Georgia and North Carolina. If you've selected a good
closing entity (title company or attorney), the closing should go off
without a hitch. You should have received your settlement/closing
statement (HUD-1 form
least three days before closing. It is
at the closing when you must bring a cashier's check with the balance
of your down payment.
What is escrow?
Escrow is an account handled by a neutral third party. It holds
documents and money in a real-estate transfer until all conditions of a
sale are met. When selling homebuyers will accompany their offers with
earnest money at approximately 1% of the asking price. This money
expresses the buyers "earnest" intent of buying your home and is put in
escrow. If you accept the offer and they buy your home, then the
earnest money is typically applied to their down payment.
Escrow also accrues money from your monthly mortgage payment that is
applied to home insurance and property taxes.
Step 10.) MyMove
Moving your household – go it alone or hire a professional moving
company. Find movers and
storage at MyREALTY.com
. You can
several useful lists
Even before you pack anything you should:
Go to the post office and fill out a change of address form or pay a
small fee and do in online through their website.
- Change address with IRS, banks and credit card companies
(think of the things you don't want showing up at the wrong house.)
Find a new bank in your new city. It's a good idea to set up a
- Contact any subscriptions, cable and Internet.
- Contact utilities and switch your address.
- Ask your current dentists and doctors for referrals. You
need a new pharmacy too.
- What church or civic organization will you be a part of in your
new town? You should close out current memberships as well.
- Rental trucks and movers need advanced reservations, so give
them a call now. Make any necessary travel arrangements.
- What about pets? You'll want to plan how they'll get to
your new home.
- Taking down serial numbers and creating an inventory of your
belongings is a good idea. Insurance companies also
video taping your belongs. You'll also want to make copies
of important documents before mailing or moving them.
- Get more boxes than you ever imagined you'd ever need.
You'll need them.
- Color code boxes for different rooms or mark them
clearly. Give yourself time to be organized. Check closets,
nooks and outbuildings for your belongings.
- Eat your inventory. Dine-in more and clean out your
- Get ready to buy some pizzas to tempt friends to help you
- Contact the Division of Motor Vehicles for driver's license,
auto registration and tags.
- Find the hospitals, police stations, veterinarian and fire
stations near your home.
If you're selling then you've most likely been involved in at least the
buying side of a real estate transaction. The insight you gained
will be helpful to get the most for your property. Yet at MyREALTY.com
we are a little
obsessed with getting you the right
information; the inside stuff and the important things you might
overlook, as well as our many available tools to move your house off a
What final point might we leave with you? Again, as a seller, it
comes down to Disclose, Disclose, Disclose! It's the best remedy
against collapsed closings and prolonged legal battles.
If you go FSBO (For Sale By Owner), remember that statistics show what
you save on real estate commissions is often countered by smaller
profit margins. A professionally trained Real Estate Agent will
earn his or her keep by getting you the highest price the market will
bear for your home. And that brings us back to another important
point: legally, real estate agent commissions cannot be fixed and
therefore are negotiable!
Getting the price you want for you home without the legal and financial
hassles comes down to the details. We do our best to take care of
those. We know you're busy with your own life so we dedicate ours
to picking at buy/sell transactions until everything is exposed.
If you haven't found all the right sales tools, or you haven't seen the
answers you need on the MyREALTY.com blog
, the MyREALTY.com
, then contact us
to let us know how we
Finally, like an overzealous mother, we also have some Real Estate
"Do's and Don'ts" to download and take with you.