Property Sales Process | Selling Costs
Introduction:
One of the most important things connected with selling a property is working out the true worth or value of your property. There is a multitude of ways that you can work out the value of your home, but for most people the two main ways that they use are market value and appraisal. Both of these techniques are valued methods of calculating the value of a home, but are markedly different from each other.
Sitting down with your realtor and discussing what you believe to be the market value of your house is the best place to start, for most property owners. The market value of your house refers to what it is worth when it is compared to houses that are near or comparable to it.
Home appraisal
Having an appraisal performed on your home is an additional way to find out the value of your home. Real estate appraisals provide valuable information for the buyer and the seller, however the appraisers, who caries out the appraisal, primary assignment is to guard the lender.
An appraiser is an expert professional who is qualified to use their opinion, judgment and experience to perform a thorough and detailed examination of your home. This examination will lead them to a valuation of your home, compared to the current market conditions.
To perform their examination and get to the correct valuation appraisers weigh up specific criteria including location, proximity to desirable schools, and condition of the home and recent sales prices of similar properties, to arrive at a value.
To become an appraiser is not easy, with federal law requiring states to establish minimum standards and licensing practices for real estate appraisers.
Because an appraisal is a professional estimate the service is not free. The cost of an appraisal depends on the price of the home, but is typically about $300 for a house that is valued at $250,000.
Disclosure
Knowing what to disclose to a prospective buyer can be an interesting dilemma. Selling a house is not the easiest of tasks and some people prefer to have an attorney on hand, to guide them through the mire of real estate problems and contractual negotiations.
Whilst not necessary in some states hiring an attorney can be a god move for the majority of property sellers, as their experience in contract and other real estate dealings could be extremely beneficial.
Knowing where you legally stand in terms of what you have to disclose to a buyer is essential in any contract negations. Whether to disclose the value of other offers is not legally required however there are pros and cons to giving out and also retaining that information.
As a buyer you are however legally obligated to disclosure certain material information about your property to a prospective buyer. A real estate transfer disclosure is a through document highlighting in detail the possessions in and attached to the house, that is required to be filled out by the seller.
Items that can be found in the discourse form vary but generally include ad description of items in the kitchen; notice of the safety features in the houses; any external devices, such as a TV antenna or satellite dish; the amenities including pool or spa; heating devices and water supplies
Sellers are also required to indicate any major defects or malfunctions that exist in the major systems of the home and the presence of environmental hazards, walls or fences shared with adjoining landowners, room additions or repairs, zoning violations, citations against the property and any lawsuits against the seller affecting the property
Escrow and closing costs
One of the biggest issues for homebuyers is the amount of escrow and closing costs that are involved in purchasing a home. Escrow costs and closing costs are similar concepts that refer to expenses accumulating from services that are required to complete a property transaction. Closing fees refer to services that are required in the closing portion of the home sale, and include:
- Title insurance premium
- Real estate commission
- Transfer and assumption charges
- Recording fees
- Loan fees
- Tax fees
- Insurance
- Termite inspection fees
- Surveying fees.
Escrow costs refer to fees charged by a title and/or escrow company. Escrow companies usually hold money or documents in trust during the closing stage of the property transaction. This arrangement enables both the homebuyer and home seller to finish the final stages of the home purchase or sale without worrying about exploitation from the other side. Examples of escrow costs are the fees charged in order for required documents to be prepared in order to officially consummate the real estate transaction.
Timeframe:
Generally it will take 2-4 weeks to sell a property. This is dependent on a number of factors, not all of which are in your control. The terms and conditions of the sale can be negotiated very quickly, therefore it is important to have an accurate picture of the condition of the property, likely repairs that will be needed and its consequent value.
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