Hearing that houses “Sold in Five Days” makes the work seem like a quick and easy job. But even when selling quickly, most still require five months of work. The objective of this blog post is to share with sellers a realistic timeline of the prelisting, listing, marketing and selling of a home.
Month One: Identifying a Realtor Partner
The first month of getting ready to sell your home requires research and market education. You seek information on selecting a realtor and learn more about what these professionals think of your home’s value and what the sales price can be. This includes interviewing realtors, asking for a comparative market analysis (CMA), and determining who is the best fit for you (both realtor and firm).
Month Two: Preparing and Organizing Your Property
The second month is where you move down the path of actually putting your plans into motion. This involves selecting a realtor and signing a Residential Listing Agreement and other agency contracts. Now you begin closely working with them and relying on them to help you navigate the home selling process. If it is a rental property, this includes giving proper notice to tenants (30-60 days depending on the length the tenant has lived in the property). Other preparations take place that include pairing down furnishings in your home, removing clutter, sorting through closets and the garage. You also need to evaluate and secure resources required to sprucing up the appearance and curb appeal of your property. Examples are landscapers and painters that can be booked up for weeks before they can get to your home.
Month Three: Inspections and Listing Paperwork
Your moving towards getting your home ready for market and the work seems to take every spare moment and eats into your nights and weekends. This is the normal. But now its time to get your home inspected by both a structural pest inspector and certified home inspector. The reason for a “pre-inspection” is twofold.
- First, it helps identify any possible areas that can be simply fixed or improved when bringing your home to market. It provides a neutral party evaluation of the home’s condition and transparency to potential buyers of areas for repair. I’d estimate it is common to find termite damage in 90% of all homes on the Monterey Peninsula.
- Second, knowing the condition of the home and what possible improvements need to be done to the house helps determine if you are going to fix them. Or, if you are going to factor the needed repairs into the pricing of your home (this is important in the “Request for Repairs” discussed later in this post).
During this same period there is a litany of paperwork that you complete with your realtor. This include some simple forms while others are more detailed asking for a history of the property, improvements you’ve made and any known defects. The Seller Property Questionnaire and Transfer Disclosure Statement are the longest and most detailed.
Month Four: Finalizing Price, Marketing and the Listing “Goes Live”
Your realtor is very busy during this period doing a number of things behind the scenes getting ready to “launch” your home. This includes taking photos/video, scheduling advertisements, drafting brochures, creating websites, and preparing for the first Brokers’ tour. The final decision that you and your realtor need to discuss is the price that you list your house for. You should take into account updated market information that includes competitive houses up until the last minute for the most accurate pricing.
You’ve got everything aligned and now it’s time to “go live”
The first week creates a flurry of activity and it really is the most important part. You only “launch” once and you want to do it right. Your realtor is busy around the clock fielding questions, showing the home, holding open houses and capitalizing on the initial demand for the property. Again, this is very important. You need to make your home as accessible and available to capitalize on the momentum of the launch.
And now is where we get to “Sold in Five Days”
You’ve now received you first offer(s). Your realtor counsels you on a response(s) and you could have several days of negotiating back and forth. This process may have started on day one, and by day five, you’ve reached and agreement and you are officially in escrow!
Within the first few days of escrow there are several more reports, disclosures and questions that need to shared and answered between you and the buyer. You need to open up your home as the buyer wants additional looks at your house and schedules some of their own inspections. This initial “physical inspection” period is normally 17 days. At the end of this time period the buyer can come back and ask for a “Request for Repairs”. This is a second negotiation in the real estate transaction where the buyer asks for repairs, a credit or a reduction in the sales price of the home. As the seller, you can negotiate these terms that result in: a) agreeing to repairs, b) compromising on repairs, c) not agreeing. Each negotiation again balances the risk of losing the current buyer versus staying in escrow.
Month Five: Lifting Contingencies and Packing to Move
Entering into the fifth month your realtor and the buyers’ agent have been working on finalizing paperwork and getting everything ironed out for a smooth transaction. If the Buyer has a loan, you get through the 17-day appraisal and 21-day loan contingencies (these are the “standard” but can be longer based on the Residential Purchase Agreement terms of your sale). Now, the final “Removal of All Contingencies” and you are on the home stretch. The next 10 – 25 days you know that you are moving out and prepare for the transfer of the sale of your house. As you schedule the final signature at the title company or with a notary, you get word that the “buyers’ funds have come in” to close the transaction. This means all of their money is in the escrow account and ready to transfer to you on the day of recording. Congratulations, you’ve sold your home!
So while you can see it “sold in five days”, the whole process took five months.