Friday, August 9, 2019

First-Time Home Seller, Part One

I have worked for almost twenty years with first-time homebuyers - either counseling them as a non-profit employee or counseling them AND closing their mortgages as a loan originator.  So I’ve seen that there’s no shortage of advice out there for first-time homebuyers. But when I went to sell my home, I thought about how little guidance there is for first-time SELLERS.  Which most first-time buyers will become at some point in their lives. Now that my home has sold, I want to walk people through that experience and hopefully provide a few helpful pointers of what you might not have thought about before that undertaking.

If it seems, at times, like a piece of advice comes out of nowhere and one thing doesn’t always follow another in any logical sense, that’s because in the process of selling your home things come out of nowhere and one thing doesn’t always follow another in any logical sense.  Selling your home is sort of like if you’re dating someone and the relationship gets to the point where the two of you are finally ready to take the big step and meet one partner’s friends for board game night. And it turns out you thought you knew how things would go but everyone’s got these inside jokes and they bust out the rule book to prove to you that you’ve been playing Monopoly wrong for your whole life and you’re thinking about breaking up with her before the game is even done but they made you be the damned thimble and now you’re determined to win, if only to prove a point.  

In order to give some semblance of order while still allowing for the occasional non-sequitir, I’ve broken this series down into three categories.  The emotional/mental side of things, the physical/practical aspect, and the finances.

The Emotional and Mental Side of Selling Your Home

Lesson number one: Selling your home is the equivalent of a new, second, full-time job.

The first thing I realized when I began the process was that holy cow, selling a home and buying a new one is REALLY quite taxing mentally and emotionally.  I worked with hundreds of families over the years who were doing this exact thing but had bought only one home before (now two!). Selling made me think that loan originators and realtors and other real estate professionals should almost HAVE to go through this process on their own from time to time.  It’s one thing to guide others through the steps of getting qualified for financing, looking for a home, getting ready to market and sell your own, and then coordinating all the other moving pieces in life. It’s quite another to go through it yourself.  

Getting the paperwork ready to qualify for a new loan, preparing your home for sale, looking for the new house, and everything in between pretty much adds up to the mental and practical equivalent of a second job.  But because your realtor, lender, and most other partners in the sale process all work at this as their full-time jobs, you can expect to have your actual job interrupted constantly either by their tasks or by the difficulty of setting aside your worries until after hours.  Imagine taking on a new job in conjunction with everything else in your life, only the new job might require you to stop everything you're doing at a moment's notice and focus entirely on that for at least a little while. To top it off, the highs of getting qualified, finding a home and getting an accepted offer are exhilarating. The lows can be conversely stressful. The times between the two can feel like endless purgatory.

For all of my buyers that I worked with, you've got an added degree of my admiration for what you went through, and anyone reading this, be prepared for an emotional roller coaster that can permeate almost every aspect of your life for the next few months when you prepare to sell.

My own experience was complicated by the fact that what precipitated my move was a new job opportunity.  So I had job interviews in a different state to juggle with everything else. It was simplified though, because I didn’t have to close on a mortgage to purchase my home at the same time that I was selling.  I didn’t have to worry that complications from a prospective buyer’s side would impact my ability to be in my new home. Even so, at the back of my mind there was always this creeping feeling: what if something goes wrong? 

Thankfully, there are people who can make that burden a little lighter.  Realtors. And for my money, the best ones can be found with Constance Vork and the Vork Real Estate Group.

Lesson number two: Talk to and enlist the services of a Realtor.

Look, if there is anyone who would appear to not need a realtor in order to sell their home, it would be me.  I spent nineteen years in the Twin Cities housing industry. Between my own connections among realtors, lenders, non-profit housing agencies, investors, and other prospective buyers, there is no doubt in my mind that I could have found someone to buy my home.  And with a property on a high-visibility intersection with car, bus, bike, pedestrian, and heck even those fancy new scooters zipping by, a “For Sale By Owner” sign would have been the milkshake that brought all the buyers to the yard, so to speak. In a market as hot as Minneapolis has been, I had more than a few “we’ll buy your house” postcards too.  I didn’t NEED a realtor to sell my house to someone at some price, but there wasn’t a second where I thought about going through that process without one. Here’s why.

First off, a home is such an emotional belonging.  We don’t always think rationally about our homes when we decide on such minor things as paint color or room layout.  We do what we like, and that’s all fine and good for when the home is ours. So why would we suddenly become dry and analytical and efficient when it comes to attempting to sell?  A good realtor will be right there with you for the emotional highs and lows, and they bring their professional expertise to the process. Every home can be sold, at the right price, but what’s the best price for your home? What's the best time and the best way to get your home in a condition to sell at the ideal price?

For instance, if you want or need a certain sale price and net proceeds for your home (usually the most important part of whether you accept an offer) then how do you to get that value?  Price low and start a bidding war? Price higher to set the expectation of what the home will sell for? If you price too low, will the escalating bids get high enough? If you price too high, will there be limited or no bids at your level, and what does that do if a house sits longer than others usually do in that marketplace?  

Lessons three and four.  Every home is saleable at the right price, and buyers tend to look for true value over negotiating for a bargain.  

Your realtor will also guide you through other parts of the sale that are important to you.  Most of us also want to leave our home and our community in good hands, so finding the right buyer can be more than just who comes in with the highest bid.  In my case, I wanted to ensure as much as possible that my home would sell to an owner-occupant or relative homestead buyer. (Short of a deed restriction, there’s no way of guaranteeing that, and even if a buyer indicates a certain kind of occupancy they have a reasonable right of use and enjoyment to their property after the sale.)  Still, I wanted to do everything I could to maximize the offers coming in from those buyers instead of an investor. A good realtor will do more than just maximize your profit.

Lesson five.  Not every realtor is created equal.

Speaking from experience, there are realtors out there who I absolutely wouldn't want representing me or even my buyer. There are agents out there who I know are top-notch professionals but they wouldn't be a good fit for me or my home. Your experience AND your price can be quite different based on who you choose to represent you.  I only sold my home once, so I can’t exactly describe comparison shopping. But there are some very specific things the Vork Real Estate Group did for me that I don’t think other agents would have achieved to the same degree.

Since I was fortunate enough to be able to move to my new home without selling first, I was able to make some cosmetic repairs and upgrades before listing.  My realtor guided me through which repairs should be done and what the best strategy was for that. A good rule of thumb is to NOT do major remodeling without checking first with your agent.  A new roof, for instance, is going to cost you upwards of ten grand but likely won’t get anywhere near that in an increased sale price unless the roof is obviously failing. So I put in a new carpet, touched up some exterior paint, repainted most of the interior, and did minor repairs to the kitchen and bathrooms.  

Some of those repairs, I wish I had done years ago because they’d have added to my enjoyment of my home.  Others quite honestly helped me detach. Changing a bright and bold color scheme for (to me) a bland, off-white decor made it clear the home wasn’t mine anymore.  “If you hear me say I hate it, that’s actually a good thing,” was my way of complimenting the workers.  

“But I LIKE this color!”  “A buyer won’t, and that could cost you money.”  I don’t know how often I had this exchange with Constance or one of her team members, but it was probably five times too many.

From the time I started preparing my home for sale to the actual closing date, there were countless decisions I had to make that my emotions or my thought process probably would have made worse if it weren’t for the guidance of my realtor team.  Some were seemingly minor. What do I do if my roommate can’t find a new place before closing? Can I bring my dog and my neighbors’ dog and some friends’ dogs over for one last doggie play date? (NO AND WHY DID YOU EVEN ASK!) Could we just keep the cat safely secured in one room and put up signs telling buyers to be careful not to let it out? (HAHA ALSO NO)

Others were pretty major.  We thought about listing on a weekend when temperatures were slated to be in the polar vortex range, and decided to wait one more weekend so that we could try and sell during a major snowstorm instead.  My house, had it been located in the middle of a block on a more secluded street, would have had an easily ascertained listing value. Instead, it was on a busy intersection across from a gas station, but right on a really great bike path.  What was the best strategy for getting the best offers?  

Once the offers came in, the landlord offers were higher, but how much higher was enough to consider that sale vs. to an owner-occupant?  One offer didn’t make it through the inspection contingency period, for minor reasons, so how do I handle that and what’s the best way to get the next offer successfully negotiated?

From the day I knew I was going to sell my home until the day the ink was dry on the closing documents, I went through almost every range of emotions and was at times in a near-constant state of overthinking-driven anxiety. The reason that frame of mind wasn't completely constant was because I had an excellent realtor guiding me along the way. It was either that, or I would have needed a therapist.

Lesson six: therapists can't help you sell your home and don't get paid on commission, but your realtor can sometimes feel like a therapist.

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