THINKING OF SELLING? Follow these 15-steps to better understand the Big Island home selling process with Kona REALTOR ®, Penn Henderson (RS).
For many people, the home selling process can seem quite daunting. If you are currently thinking of selling your home, you have probably already spent the past couple of months considering the financial implications, the logistics, and the uncertainties of “what’s next”? On top of that, there are the emotional aspects of letting go and moving on – along with the inevitable preparation jitters and questions about how to start the home selling process.
Sit back, relax, and take a breather for a moment. The home selling process doesn’t have to be difficult – or stressful. Below, you will find the process simplified into 15 straight-forward steps to help wrap our minds around things. If you have any questions while reading through this, feel free to reach out to Kona REALTOR ®, Penn Henderson for assistance.
Should you ultimately decide to sell your home, you would be hard-pressed to find a more committed and skilled professional to partner with than Penn. He is well versed in effectively managing the Big Island home selling process – start to finish. He will help take the weight off your shoulders and provide peace of mind towards a successful sale.
Step # 1
Define Your Objectives
Getting started is often the hardest part of the home selling process. But in reality, it is as easy as simply reaching out to Penn for a no-hassle, candid discussion. He will go over various real estate topics with you including your goals and objectives. Plus, it provides an opportunity to get to know one another and to get a feel for whether or not the synergy exists in partnering to sell your home.
A few questions worth exploring:
- Reason for wanting to sell? (Job transfer, downsizing, upsizing, etc.)
- Are you emotionally ready to sell?
- Have you established enough equity in your home?
- Do you have time to prepare your home to sell (quickly)?
- Current Big Island real estate market conditions, is it a good time to sell?
- Do you qualify for the homeownership tax break?
- Are you ready to partner with a professional Realtor®?
No matter your situation, Penn can help you answer these questions and help define clear objectives to focus on. The aim here is to provide clarity and comfort with your decision. It is important that your needs are addressed, goals are established, and appropriate “next steps” have been determined.
Step # 2
Assess Your Home's Value
Assuming you had a productive discussion with Penn during step 1, and after careful consideration, you have decided that selling your Big Island home makes sense. It is now time to determine a marketable price for your home. Keep in mind, pricing your home is about establishing a price based on research, market insights, and reality.
Overpricing a home based on a seller’s perceived value is a pitfall to avoid. Penn can help you with this – by creating a thorough Comparative Market Analysis (CMA) Report on your home. This is a free service with no obligations to choose Penn as your real estate partner, whatsoever. With this report, you will have a much better understanding of how best to price your home to sell.
A FEW KEY POINTS OF CONSIDERATION WHEN PRICING YOUR HOME TO SELL:
A Comparative Market Analysis (CMA) is a must! Utilize Penn’s vast industry resources and market knowledge to get this valuable information – at no cost to you.
Avoid setting a price to simply make more money. Listing your home at a higher price does not usually equate to a higher selling price. Price it accordingly to ensure it sells. Too high of a price often results in a longer period of sitting on the market, oftentimes resulting in a lower sales price.
Use caution with internet-based home estimates. Sites such as Zillow can provide a certain degree of helpful information. However, computer-based algorithms estimating your home value should only be used as a rough estimation. This is especially true in dynamic real estate markets such as Hawaii. Nothing substitutes real-time, expert knowledge when it comes to evaluating your home’s comparative market value.
Step # 3
Review the Listing Agreement
Now is a good time for you to discuss with Penn any final details of selling your house and the Agency fee, before signing the final listing agreement.
At this point in the home selling process, you are ready to review the nuts & bolts of what is entailed with listing and selling your home. This includes the associated cost of service (Brokerage Agency Fee). Penn will carefully walk you through everything, addressing any questions you may have before signing a listing agreement.
A COUPLE KEY ELEMENTS RESIDE WITHIN THE LISTING AGREEMENT:
Seller’s Disclosure – This is a critical component, not to be taken lightly. Nobody wants a lawsuit – the Seller’s Disclosure is paramount in helping avoid such a situation. Penn will be with you every step of the way – including helping you prepare a thorough Disclosure form. Do not leave anything out, if there is any doubt about anything – it needs to be disclosed. Contrary to what you may think, full-disclosure – even meniscal items that may seem irrelevant show potential buyers that they are dealing with an honest & trustworthy seller, increasing the likelihood of a fast and smooth sale.
Agency Fees – The cost to the seller, called an Agency Fee, is generally 6% (plus GE Tax) of the final sales price. The Buyer’s Agent generally receives ½ of the Seller’s Agent fee, so essentially the Seller’s Agent’s Brokerage Firm gets 3% and the Buyer’s Agent’s Firm gets 3% (all paid by you, the seller). The benefits and value of enlisting the services of a professional REALTOR® cannot be underestimated. REALTORS® help guide you through a complex process in an efficient manner while leveraging marketing and industry resources to help sell your home as close to the listing price as possible.
Step # 4
Preparing Your Home to Sell
Even with a meticulously well-thought-out price to list your home at, it still needs to “show well” for the best opportunity in receiving full-price offers. Out of everything, this is probably the hardest part of the home selling process. This is especially true if they are still occupying the home while it is listed – which is normally the case. Every showing, and every open house counts! Not often is there a second chance to make a first impression – so it is important to stay on top of things. Here are some recommendations:
- Clean Thoroughly – Consider hiring a professional cleaning service.
- De-Clutter – Consider renting a temporary storage unit if necessary.
- Increase Curb Appeal – Fresh paint here and there, hedge the bushes, etc.
- Pets & Kids – Ideally, try to entertain them elsewhere during showings.
- Consider “Staging” Your Home – With the help of a hired professional. There are many levels of services available from stagers, who can either utilize your own furniture or can use their own inventory of furniture for an extra fee.
Step # 5
Marketing Your Home
With Penn at the helm, you will enjoy custom-tailored marketing campaigns created for your home’s unique qualities and features. Penn will then follow-up with full amplification utilizing an array of options. Everything from generating effective copywriting, eye-catching professional photography, Matterport virtual tours, engaging videos, creative social posts, open houses, and numerous web engagement tools.
Leveraging powerful marketing resources available through NextHome Paradise Realty, Penn will get your property’s MLS listing syndicated across literally hundreds of internet real estate websites. This includes the big hitters such as Zillow, Trulia, and Redfin – all within a matter of days.
With nearly 25-years of hands-on marketing experience, you can have confidence in knowing your home will stand out and get noticed.
Step # 6
Showing Your Home
Home showings give potential buyers the opportunity to view your home in person. Showings are a very important part of the home buying and home selling process, and according to a 2018 Zillow Report, 79% of buyers credit taking a private tour as a key factor in their decision to purchase. There are several types of showing methods – such as an open house, a lockbox tour, or a private showing. If you are looking for a conventional buyer, and if you want to encourage multiple offers, avoiding showings is not really an option. Sight-unseen sales are rare unless you are dealing with international or out-of-town buyers.
Open House Showings: This is when you open your home to be viewed at once by many potential buyers, usually over the course of a three to four-hour period on a weekend afternoon. Open houses can minimize the inconvenience of showings as you will only have to get your house “ready to view” one time, and you will know the schedule ahead of time.
Lockbox House Showings: More convenient than private tours, lockbox tours allow potential buyers to look at your home with their own agent. Since they can access your home with a lockbox, this setup allows more flexibility in scheduling. They can let themselves in rather than waiting for Penn to show the house. However, this method only works if you are not living in the home. Generally, utilizing the lockbox process will generate more showings.
Private Tour Showings: With a private tour showing, Penn personally shows your home to a prospective buyer and their agent. This provides Penn with the ability to control the showing, providing answers to all of the buyer’s questions in real-time, pointing out your home’s best features, etc. Plus, private tours often provide Penn with helpful feedback regarding your home’s price, condition, and competition – which is helpful information when refining marketing campaigns.
Step # 7
Review Offers from Buyers
If everything has been done right up to this point in the home selling process, there is a chance you may receive multiple offers. Be ready to act quickly by either accepting, rejecting, or making a counteroffer. Even if the offer is less than you are willing to accept, it is important not to ignore an offer. Penn is a savvy negotiator, formulating an enticing counteroffer is definitely worth a shot for a win-win result! The art of countering comes into play with most real estate transactions. In fact, it is not uncommon to see many back-and-forth counters before agreeing to terms.
Step # 8
Open Escrow / Order Title
Upon both buyer and seller agreeing to the terms of sale, Penn will arrange for a Transaction Coordinator to begin the process of opening escrow and ordering a title policy for you. A complete timeline of the escrow process and the required steps to follow will be provided to you.
Step # 9
The Home Appraisal
The buyer’s lender will require an appraisal to be conducted – and is almost always a key factor whether or not the buyer receives financing. Typically written into the contract, a buyer can cancel the contract based on the outcome of an appraisal. So, it is important to prepare for a scheduled appraisal as if you are showing the home to a potential buyer for the first time, everything needs to be clean and tidied-up.
Step # 10
Buyer's Due Diligence
Once you and the buyer have agreed to an offer, there is a process lasting a few weeks before the transaction closes. During this window of time, buyers are often told to “do their due diligence” on the home they soon hope to own.
Home Inspection – Most home buyers will hire a home inspector to scrutinize your house top to bottom as part of the due diligence process, looking for problems that could cost the buyer major money to fix. The inspector is looking for a crumbling foundation, mold, faulty HVAC systems, termites, leaking roof, and other potential big-ticket problems. The buyer may conduct additional inspections related to bio-toxins, septic, solar, flood zones, etc. All inspection costs are normally the responsibility of the buyer.
Termite Inspections – The Buyer typically selects a termite inspection company, though you (the seller) normally pay for the inspection and any necessary remedies.
Condo / HOA Documents – If you are selling a condo or property within a subdivision with a homeowner’s association, you need to provide the association documents to the seller for their review. This is generally pretty straight-forward, most often Penn will obtain the documents and provide them to the buyer.
Final Walk-Through – The final walk-through is a final inspection of your home shortly before the closing date. It is an opportunity for the buyer to verify that all negotiated repairs have been completed and to ensure that the condition of the property has not changed since their last visit, as well as to familiarize themselves with the home’s systems.
Step # 11
Final Repair Requests
This is negotiable. Hawaii is an “as-is” State, therefore you do not necessarily have to accept a buyer’s request to make repairs, however, the buyer can cancel the contract if you do not. If issues arise, there are some options; For instance, a buyer might instead accept a closing cost credit if you choose not to make repairs.
Step # 12
Buyer's Release of Contingencies
This is a document used by the Buyer to release one or more of the standard contingencies contained within the contract. For example, after the home inspection is completed – and no problems have been identified. This form would be completed by the Buyer’s Realtor®, “releasing” the contract from the inspection contingencies contained within it. The buyer is not obligated to provide a contingency release, but it is good practice – and it should be asked for. If there is no word from the buyers, you can assume “no news is good news” – as silence from the buyer is deemed as “acceptance”.
Step # 13
Sign Closing Documents
The closing process can span a couple of days, and in contrast to other parts of the country, the transaction is generally not consummated with all parties sitting at the same table. The closing itself convenes at the office of the escrow agent, closing agent, or title company where a buyer signs all closing documents. Generally, the seller signs their documents at a different time (or day).
Step # 14
Record Documents / Close Escrow
Once the property deed, re-conveyance and deed of trust records in public records, escrow is officially closed and the sale is complete. Upon recording, the title company will notify both you and your Realtor®, Penn. Your exact “move-out” date will depend on the buyer’s stipulated possession rights contained within the contract. You might be required to move on the day your home closes or possibly beforehand. It can also be negotiated (specified beforehand in the contract) to remain in the home after the closing for a period of time.
Step # 15
At this point, you have completed the home selling process and it is time to celebrate the successful sale of your home – congratulations! Now is a good time to reflect on your accomplishment and recalibrate before moving on to your next endeavor, possibly changing roles and becoming a “buyer”. Once you are ready, be sure to check out Penn’s Step-by-Step Guide on the Buying Process.
And of course, whether buying or selling, feel free to Contact Penn with any questions or assistance.