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Your home is actually an investment that you live in. How much profit is possible to squeeze out of your investment is determined by many factors. Is the market biased towards sellers, buyers or is it an even market? Are there pre-payment penalties on your existing loans? Will your home require major repairs to garner the best sales price? Will you have to offer incentives to attract a buyer? Do you need to get out quick, or can you wait to get your price? How much, if any capital gains will you have to pay once you've sold? How much will you have to pay in closing costs and brokers fees?
So where do you start in setting the price?
An appraiser will take several approaches to determining price once a sales price has been agreed to, but basically an appraiser is going to look at the history of comparable homes, preferably in the same subdivision, built by the same builder and sold within the last 6 months. An appraiser also looks outside of the subject properties subdivision and adjustments are made to compensate for differences in the homes. A comparative market analysis or CMA is similar to an appraisal in that it takes into consideration what a home should be priced at based on the sales history of similar properties, but it is not as detailed as an appraisal. The comparative market analysis is what a Realtor uses to give a range of suggested pricing options. I like to give an estimate of what I think a home will appraise for, along with pricing options that should allow a house to sell faster, or that might push the market to see what it will bear. It is possible to get more than appraised value, but the buyer must be willing to either pay all cash (no loan) for the home, or put down a substantial down payment that will make up the difference between what the home appraised for and the amount a lending institution is willing to lend on the home.
How much will it cost to sell my house?
There are several fees you will pay in selling your home regardless of whether you use a real estate professional or not.
ESCROW FEES- In Nevada, we use Escrow companies to check for clear title to the home and to facilitate the exchange of money or marketable consideration for real property. These companies have a series of fees they charge for their services, such as escrow fee, homeowner’s policy of title insurance, lenders policy of title insurance, recording fee, and some miscellaneous fees such as a fed-ex fee.
LOAN RE CONVEYANCE FEE- This fee generally ranges from $150 to $200 and is charged by the holder of your existing home loan to pay off what remains of your mortgage.
NEVADA TRANSFER TAX- $5.1 per thousand dollars of the total sales price of the home is charged by the state of Nevada.
HOME OWNER ASSOCIATION FEES- If you don't live in a home with an active home owners association, there will be no HOA fees. If you do, there will be a resale package fee, an association transfer fee and sometimes a new homeowner fee. The resale package and associated fee is something that a seller of real property in the state of Nevada is required to pay for and provide to a buyer by law. The transfer fee and new homeowner fee are generally paid by the buyer, but this is a negotiable item that can be paid by either party. Other association fees that may come into play are assessments, master plan fees and some homes are situated in subdivisions where both HOA and Master Plan fees are paid along with a LID or SID, which is actually a fee paid to the county. Each will have its own set of documents and transfer fees.
BROKERS FEES- If you use a Realtor to assist with your sale, they will charge a broker fee. These fees are by law, negotiable and each broker or brokerage may have guidelines they require the Realtor/Salesmen that work for that brokerage to adhere to. As with any negotiation, neither party has to accept what the other wants, but if a Realtor suggests there is an “industry standard”, that is not true. Generally the broker fee is a percentage of the sales price, but there are companies that work for a set flat fee as well as brokerages that offer advance fee limited brokerage agreements. The brokers fee is typically divided between a listing agent and buyers agent (or selling agent). So if there is a 6% broker fee, typically 3% will be set aside for the listing agent and 3% will be set aside for the buyer’s agent. Because this is a negotiable item, these splits and percentages can vary widely and in some cases if a buyer is not represented, the broker can represent both the seller and buyer in a dual agency capacity and collect the entire commission. Other brokers, like me, will not agree to work in a dual agency situation and actually refund part of the commission back to the seller in those situations. In addition to the percentage of the sales price, there are sometimes fees for document warehousing or miscellaneous broker’s fees.
NEGOTIABLE FEES- Items that you may wind up paying for from your proceeds at close of escrow, that can be used as part of the negotiation are an appraisal fee, home warranty, home inspection, pest inspection, roof inspection and various certifications. In some cases, such as when a buyer is using a VA or FHA loan, some of these items will be “non-allowable” fees and even though they are listed here as negotiable, they are not allowed to be paid by the buyer.
The Process
Okay let’s assume you've gotten your home ready to sell, you’ve signed your listing agreement and we put it on the market. The house sells in 10 minutes for $100,000 more than we listed it for and I’ve negotiated a nice vacation package for you and your closest friends to Aruba paid by the buyer, because that’s just how I roll! All right, the lawyers are telling me that I must insert the following disclaimer, “The preceding statement was a frivolous attempt at humor. We guarantee no quick sales, money over list price, trips or special perks”.
Okay, back to reality or realty in this case. As we were discussing, before my little trip down fantasy lane, we've listed your home and a buyer likes it and makes an offer. The buyer’s agent, or the buyer if there is no buyer’s agent, delivers their written offer to me. I will evaluate the terms of the offer, present it to you and we will discuss the terms of the contract and either accept it as is, reject it outright or counter it with terms that would be acceptable. This process used to involve the buyer’s agent presenting the offer directly to the seller, but that process fell out of fashion during the fast paced seller’s market prior to the housing crisis.
Generally you will see a standard GLVAR purchase agreement, but in some instances there are brokerages and non represented buyers that will use a contract generated by them or their attorneys. Even with the GLVAR contract, the conditions within the 11 pages can vary greatly, and of course with the buyer generated contract it is essential that each page, line and word be closely examined.
Obviously price is the first thing to consider, but there are also concessions that may be asked for by the buyer such the seller paying all closing costs, or paying for inspections and warranties. Other important items are the terms surrounding the earnest money deposit, the money the buyer is offering as a refundable or non-refundable deposit to show they are earnestly interested in your home, and want it removed from active status and put into Pending Sale, or Contingent Sale status in the MLS. Also, the amount of time the buyer has for due diligence to obtain lending, have inspections, review title reports, and HOA documentation as well as all disclosures are set at this point. All of these variables can be removed, or additional terms can be inserted into the contract with a counter offer. You may add or delete terms in your counter offer that the buyer is not comfortable with and they can then counter your counter offer and on and on.
Let’s assume we’ve come to terms and all parties have executed the contract. The buyer’s agent will open escrow, with the escrow or title company that was approved in the contract. At this point the title company will perform a title search to find out if there are any clouds on the title, such as a mechanics lien or another person claiming they have a right to the home. Also during this initial period referred to as the “due diligence period”, the buyer will have to be provided with an HOA resale package, (if the home is governed by an association), a seller’s real property disclosure form, and all inspections and the appraisal, (if the buyer is using a loan), will take place during this period. In my transactions I like for this to all take place within a window of 10 business days. During this time, the buyer is making sure the home is sound and that the title is clear. Based on the terms agreed to in the contract, during the due diligence period, the buyer’s earnest money will be refundable if they cancel based on a flaw found during the inspections, in the title report, or unacceptable terms in the HOA documentation, or if they can’t qualify for their loan. After the due diligence period, the earnest money can be retained by the seller upon cancellation by the buyer.
Okay, so we passed all of the inspections, the house appraised, the escrow instructions are correct, they don’t mind the terms in the HOA resale package and the title is clear. We are now most likely 14 days into our 30-45 day escrow, the buyer is beyond the due diligence period and barring any natural disasters, or alien abductions of your home or the buyer, we are closing rapidly in on closing. Generally this is the time that you will be packing and preparing to move out while the buyer is doing the same to move in. The title company will prepare the closing documents and set appointments for the buyers and sellers to come to their office, or if they are out of state to email or overnight the documents to both parties. These documents, known as escrow instructions are based on the purchase contract and spell out exactly what has been agreed to, how much the buyer will be paying and exactly what the seller will be receiving, which will be verified in a line item form known as the HUD 1, or settlement statement. Once the documents are signed, by both parties, the title company then needs to receive funding or marketable consideration from the buyer. Once that has happened, the escrow company sends the proper documents to the county recorders office to have the new owners recorded on the title to the home. Once the escrow company receives notification from the county recorder that this has happened, the escrow officer will notify you that the transaction has recorded and all funds in escrow will be disbursed. These are the funds that pay off the seller’s loans, all the fees incurred from the sale and most importantly disbursing the remaining profit to you.
Can I sell it myself - Of course, some people are quite capable of handling the sale of their home themselves. As with most things, if it’s not something you do on a daily basis, you will be at a disadvantage when working with someone that does have more experience, and of course you will be putting a lot of time into the process. A Realtor makes the process much easier, much the same way an accountant makes doing your taxes easier.
Why choose Rob Turney to seller your home - I’m glad you asked that, Rob is a close personal friend of mine, is an excellent dancer, makes a mean dirty martini and has been known to use samurai swords, silver back gorillas and water boarding techniques during negotiations with buyers. Okay, while those are definite positives, especially the water boarding, you may want some more specifics.
Experience- I’ve been selling real estate in Las Vegas and Henderson since 2001. During that time I have helped my clients sell the home I helped them buy initially and move up to their next home. I have assisted sellers liquidate residential investment properties utilizing a 1031 tax deferred exchange and purchase commercial investment properties. I have experience with a multitude of contracts, understand how to respond to aggressive buyers as well as tentative buyers and have successfully negotiated transactions where neither the buyer nor the sellers were in the country at the time of the sale. I have sold everything from tenant occupied condominiums and entry level homes to luxury homes and custom half acre homes zoned for horses.
Market knowledge- I was born and raised in Las Vegas and have seen the market shifts, both good and bad, that are unique to home selling here. I have first hand knowledge of how marketing techniques that have worked in the past and the conditions in which those techniques will work again, as well as what techniques will work today. I understand what the buying trends are in our market and am constantly reviewing statistical changes in buyer habits to better understand how to adjust to the changing conditions.
Marketing your home for sale - I spent 12 years working in television production and ran my own advertising agency in Las Vegas for an additional 4 years. Basically 16 years creating marketing materials and advertising campaigns for a variety of products. What this means to you, is that I know how to prepare your home for the market, present it in the most advantageous way possible and position it in a way to reach the highest volume of potential buyers possible. I understand the importance of specifically advertising your home, as well as the necessity of utilizing multiple avenues to reach those buyers. This background also allows me to think outside the box when it comes to finding ways to package a home for sale.
Customer Service- One of the most important elements of any buying or selling experience, is the level of customer service you receive from the professional you hire to assist in that endeavor. I am available to my clients 24 hours a day, 7 days a week on weekends and holidays. If you feel you need an open house on Christmas Day, we’ll do it. I will expect some egg-nog and a large plate of cookies however. I strive to make the home selling process as painless and stress free as possible and will do my best to take as much pressure off your shoulders as I can. I make myself available for all inspections, contract negotiations and escrow signings as well as personally showing your home if it is beneficial. One thing I can guarantee is that barring a case of spontaneous combustion, I will not disappear once I’ve listed your home. It is my hope and thankfully my experience that once you’ve worked with me on one transaction, you’ll work with me on your future transactions as well.
So where do you start in setting the price?
An appraiser will take several approaches to determining price once a sales price has been agreed to, but basically an appraiser is going to look at the history of comparable homes, preferably in the same subdivision, built by the same builder and sold within the last 6 months. An appraiser also looks outside of the subject properties subdivision and adjustments are made to compensate for differences in the homes. A comparative market analysis or CMA is similar to an appraisal in that it takes into consideration what a home should be priced at based on the sales history of similar properties, but it is not as detailed as an appraisal. The comparative market analysis is what a Realtor uses to give a range of suggested pricing options. I like to give an estimate of what I think a home will appraise for, along with pricing options that should allow a house to sell faster, or that might push the market to see what it will bear. It is possible to get more than appraised value, but the buyer must be willing to either pay all cash (no loan) for the home, or put down a substantial down payment that will make up the difference between what the home appraised for and the amount a lending institution is willing to lend on the home.
How much will it cost to sell my house?
There are several fees you will pay in selling your home regardless of whether you use a real estate professional or not.
ESCROW FEES- In Nevada, we use Escrow companies to check for clear title to the home and to facilitate the exchange of money or marketable consideration for real property. These companies have a series of fees they charge for their services, such as escrow fee, homeowner’s policy of title insurance, lenders policy of title insurance, recording fee, and some miscellaneous fees such as a fed-ex fee.
LOAN RE CONVEYANCE FEE- This fee generally ranges from $150 to $200 and is charged by the holder of your existing home loan to pay off what remains of your mortgage.
NEVADA TRANSFER TAX- $5.1 per thousand dollars of the total sales price of the home is charged by the state of Nevada.
HOME OWNER ASSOCIATION FEES- If you don't live in a home with an active home owners association, there will be no HOA fees. If you do, there will be a resale package fee, an association transfer fee and sometimes a new homeowner fee. The resale package and associated fee is something that a seller of real property in the state of Nevada is required to pay for and provide to a buyer by law. The transfer fee and new homeowner fee are generally paid by the buyer, but this is a negotiable item that can be paid by either party. Other association fees that may come into play are assessments, master plan fees and some homes are situated in subdivisions where both HOA and Master Plan fees are paid along with a LID or SID, which is actually a fee paid to the county. Each will have its own set of documents and transfer fees.
BROKERS FEES- If you use a Realtor to assist with your sale, they will charge a broker fee. These fees are by law, negotiable and each broker or brokerage may have guidelines they require the Realtor/Salesmen that work for that brokerage to adhere to. As with any negotiation, neither party has to accept what the other wants, but if a Realtor suggests there is an “industry standard”, that is not true. Generally the broker fee is a percentage of the sales price, but there are companies that work for a set flat fee as well as brokerages that offer advance fee limited brokerage agreements. The brokers fee is typically divided between a listing agent and buyers agent (or selling agent). So if there is a 6% broker fee, typically 3% will be set aside for the listing agent and 3% will be set aside for the buyer’s agent. Because this is a negotiable item, these splits and percentages can vary widely and in some cases if a buyer is not represented, the broker can represent both the seller and buyer in a dual agency capacity and collect the entire commission. Other brokers, like me, will not agree to work in a dual agency situation and actually refund part of the commission back to the seller in those situations. In addition to the percentage of the sales price, there are sometimes fees for document warehousing or miscellaneous broker’s fees.
NEGOTIABLE FEES- Items that you may wind up paying for from your proceeds at close of escrow, that can be used as part of the negotiation are an appraisal fee, home warranty, home inspection, pest inspection, roof inspection and various certifications. In some cases, such as when a buyer is using a VA or FHA loan, some of these items will be “non-allowable” fees and even though they are listed here as negotiable, they are not allowed to be paid by the buyer.
The Process
Okay let’s assume you've gotten your home ready to sell, you’ve signed your listing agreement and we put it on the market. The house sells in 10 minutes for $100,000 more than we listed it for and I’ve negotiated a nice vacation package for you and your closest friends to Aruba paid by the buyer, because that’s just how I roll! All right, the lawyers are telling me that I must insert the following disclaimer, “The preceding statement was a frivolous attempt at humor. We guarantee no quick sales, money over list price, trips or special perks”.
Okay, back to reality or realty in this case. As we were discussing, before my little trip down fantasy lane, we've listed your home and a buyer likes it and makes an offer. The buyer’s agent, or the buyer if there is no buyer’s agent, delivers their written offer to me. I will evaluate the terms of the offer, present it to you and we will discuss the terms of the contract and either accept it as is, reject it outright or counter it with terms that would be acceptable. This process used to involve the buyer’s agent presenting the offer directly to the seller, but that process fell out of fashion during the fast paced seller’s market prior to the housing crisis.
Generally you will see a standard GLVAR purchase agreement, but in some instances there are brokerages and non represented buyers that will use a contract generated by them or their attorneys. Even with the GLVAR contract, the conditions within the 11 pages can vary greatly, and of course with the buyer generated contract it is essential that each page, line and word be closely examined.
Obviously price is the first thing to consider, but there are also concessions that may be asked for by the buyer such the seller paying all closing costs, or paying for inspections and warranties. Other important items are the terms surrounding the earnest money deposit, the money the buyer is offering as a refundable or non-refundable deposit to show they are earnestly interested in your home, and want it removed from active status and put into Pending Sale, or Contingent Sale status in the MLS. Also, the amount of time the buyer has for due diligence to obtain lending, have inspections, review title reports, and HOA documentation as well as all disclosures are set at this point. All of these variables can be removed, or additional terms can be inserted into the contract with a counter offer. You may add or delete terms in your counter offer that the buyer is not comfortable with and they can then counter your counter offer and on and on.
Let’s assume we’ve come to terms and all parties have executed the contract. The buyer’s agent will open escrow, with the escrow or title company that was approved in the contract. At this point the title company will perform a title search to find out if there are any clouds on the title, such as a mechanics lien or another person claiming they have a right to the home. Also during this initial period referred to as the “due diligence period”, the buyer will have to be provided with an HOA resale package, (if the home is governed by an association), a seller’s real property disclosure form, and all inspections and the appraisal, (if the buyer is using a loan), will take place during this period. In my transactions I like for this to all take place within a window of 10 business days. During this time, the buyer is making sure the home is sound and that the title is clear. Based on the terms agreed to in the contract, during the due diligence period, the buyer’s earnest money will be refundable if they cancel based on a flaw found during the inspections, in the title report, or unacceptable terms in the HOA documentation, or if they can’t qualify for their loan. After the due diligence period, the earnest money can be retained by the seller upon cancellation by the buyer.
Okay, so we passed all of the inspections, the house appraised, the escrow instructions are correct, they don’t mind the terms in the HOA resale package and the title is clear. We are now most likely 14 days into our 30-45 day escrow, the buyer is beyond the due diligence period and barring any natural disasters, or alien abductions of your home or the buyer, we are closing rapidly in on closing. Generally this is the time that you will be packing and preparing to move out while the buyer is doing the same to move in. The title company will prepare the closing documents and set appointments for the buyers and sellers to come to their office, or if they are out of state to email or overnight the documents to both parties. These documents, known as escrow instructions are based on the purchase contract and spell out exactly what has been agreed to, how much the buyer will be paying and exactly what the seller will be receiving, which will be verified in a line item form known as the HUD 1, or settlement statement. Once the documents are signed, by both parties, the title company then needs to receive funding or marketable consideration from the buyer. Once that has happened, the escrow company sends the proper documents to the county recorders office to have the new owners recorded on the title to the home. Once the escrow company receives notification from the county recorder that this has happened, the escrow officer will notify you that the transaction has recorded and all funds in escrow will be disbursed. These are the funds that pay off the seller’s loans, all the fees incurred from the sale and most importantly disbursing the remaining profit to you.
Can I sell it myself - Of course, some people are quite capable of handling the sale of their home themselves. As with most things, if it’s not something you do on a daily basis, you will be at a disadvantage when working with someone that does have more experience, and of course you will be putting a lot of time into the process. A Realtor makes the process much easier, much the same way an accountant makes doing your taxes easier.
Why choose Rob Turney to seller your home - I’m glad you asked that, Rob is a close personal friend of mine, is an excellent dancer, makes a mean dirty martini and has been known to use samurai swords, silver back gorillas and water boarding techniques during negotiations with buyers. Okay, while those are definite positives, especially the water boarding, you may want some more specifics.
Experience- I’ve been selling real estate in Las Vegas and Henderson since 2001. During that time I have helped my clients sell the home I helped them buy initially and move up to their next home. I have assisted sellers liquidate residential investment properties utilizing a 1031 tax deferred exchange and purchase commercial investment properties. I have experience with a multitude of contracts, understand how to respond to aggressive buyers as well as tentative buyers and have successfully negotiated transactions where neither the buyer nor the sellers were in the country at the time of the sale. I have sold everything from tenant occupied condominiums and entry level homes to luxury homes and custom half acre homes zoned for horses.
Market knowledge- I was born and raised in Las Vegas and have seen the market shifts, both good and bad, that are unique to home selling here. I have first hand knowledge of how marketing techniques that have worked in the past and the conditions in which those techniques will work again, as well as what techniques will work today. I understand what the buying trends are in our market and am constantly reviewing statistical changes in buyer habits to better understand how to adjust to the changing conditions.
Marketing your home for sale - I spent 12 years working in television production and ran my own advertising agency in Las Vegas for an additional 4 years. Basically 16 years creating marketing materials and advertising campaigns for a variety of products. What this means to you, is that I know how to prepare your home for the market, present it in the most advantageous way possible and position it in a way to reach the highest volume of potential buyers possible. I understand the importance of specifically advertising your home, as well as the necessity of utilizing multiple avenues to reach those buyers. This background also allows me to think outside the box when it comes to finding ways to package a home for sale.
Customer Service- One of the most important elements of any buying or selling experience, is the level of customer service you receive from the professional you hire to assist in that endeavor. I am available to my clients 24 hours a day, 7 days a week on weekends and holidays. If you feel you need an open house on Christmas Day, we’ll do it. I will expect some egg-nog and a large plate of cookies however. I strive to make the home selling process as painless and stress free as possible and will do my best to take as much pressure off your shoulders as I can. I make myself available for all inspections, contract negotiations and escrow signings as well as personally showing your home if it is beneficial. One thing I can guarantee is that barring a case of spontaneous combustion, I will not disappear once I’ve listed your home. It is my hope and thankfully my experience that once you’ve worked with me on one transaction, you’ll work with me on your future transactions as well.