You’ve seen the headlines. You’ve heard what other homes are selling for in your neighborhood. To top it off, you are approaching a new phase of life – maybe you have a baby on the way, maybe your kids are moving out, maybe that new promotion is coming through. Either way, you are seriously considering selling your home and can’t think of a better time than now. That’s great!
If this will be your first time listing your home, or if it’s been many years since having your house on the market, it’s important to know a few key points about selling your home in the Denver metro area:
1. Despite the current market conditions, an effective home sale still needs to be built on the fundamentals of condition, pricing, and exposure. In my 33 point home marketing plan, the first few elements address getting your home in the proper condition and establishing the right price. When I’m showing homes to buyers, we often come across properties where the condition is sub-par (maybe in bad shape or just completely outdated) and the price doesn’t reflect the amount of work needed. We also see sellers set a price way too high for what their neighborhood comparable properties support. Buyers are not senseless in this market – despite the lack of inventory! Every day, homes in the Denver real estate market “expire” (meaning get taken off the market) because of over-pricing or bad condition. In fact, in the last week alone, 197 home listings did not sell and fell off the market! Once you get the condition right and pricing correctly positioned, then maximizing exposure will pay off and you’ll reap the benefits.
2. The Contract to Buy and Sell Real Estate is built in favor of the buyer. First, it’s always a good idea and highly recommended to consult with an attorney regarding language in the sales contract (an 18 page document alone, not including the additional disclosures, forms, etc, that will be required) – in fact, you’ll see this at the top of the contract: “THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD CONSULT LEGAL AND TAX OR OTHER COUNSEL BEFORE SIGNING.” With that being said, the buyer in any home purchase has multiple contingencies built into the contract to use as they see fit. These include conducting any types of inspections they’d like, reviewing the costs of property insurance, reviewing HOA rules, reviewing the title commitment, reviewing the loan costs and terms, and having a survey completed. Of course, how the due diligence activities and timelines are structured is determined upfront during negotiations between the parties. In a multiple offer situation and low inventory environment, you’ll most likely find yourself in a situation where terms can be set more favorably for you as the seller.
3. Sellers still can’t blindly cancel the contract (without potential consequences). Despite having more favorable terms established as the result of a great negotiation during the offer process, there’s still an important element of the contract to consider: Section 21.2. This basically says that if the seller defaults – like walking away from the contract – the buyer has the right to either treat the contract as cancelled, or “Buyer may elect to treat this Contract as being in full force and effect and Buyer has the right to specific performance or damages, or both.” Now, this most likely won’t apply to situations where issues emerge between the buyer and seller about inspection items or the appraised value of the home for example – that’s different and activates the processes related to objections and resolutions included in the purchase contract.
4. You can live in your home even after it is sold and closed. In our current real estate market, homes that execute the proper listing fundamentals can be “under contract” in a matter of days. Knowing this can happen is exciting for sellers, but often is accompanied by questions and concerns about what to do or where to go – especially if they don’t have a replacement home identified. The good news is that you can stay in your home for any amount of time after closing that is agreed to by you and the buyer. At the same time, if the buyer is financing the purchase of the home, there will be a requirement that the home be occupied within 60 days. The form that will govern the period after closing is the “Post Closing Occupancy Agreement”. Knowing that a typical escrow period is around 30 days, you may have up to 3 months to find and move into a new home (assuming you stay in the home a full 60 days after closing). This is just one example among a myriad of potential options. So before even hitting the market, make sure you’ve discussed your “post closing” occupancy plans and know your preferred course of action.
The Denver real estate market continues to show signs of a strong seller’s market – low months of available inventory, low days on market, higher than average price appreciation. If you’re considering taking advantage of the current market and selling your home, please contact me. I’d be happy to further discuss my points in this article, the listing process, and any other questions or concerns you might have. I want to make sure you are fully prepared and informed so you can make the best decision for you and your family.