The Ultimate Guide to Selling Your Home

Selling a home can feel like a daunting task, especially in competitive markets like Sherman Oaks or anywhere in Los Angeles. There are a multitude of factors to consider, from staging the home to negotiating offers and navigating the complexities of escrow. Hi, I'm Blayne Pacelli, with Rodeo Realty, and I’d like to guide you through some of the most common seller questions and provide expert advice to help make the process smoother. Whether you're selling in Sherman Oaks or any other area, the principles are largely the same. Let's dive in.

1. Preparing Your Home for Sale

One of the first steps in selling a home is ensuring that the property looks its absolute best to potential buyers. Every home is unique, but there are general guidelines that can be applied to most properties.

Staging

If your home is vacant, I highly recommend staging, especially for key rooms like the living room, master bedroom, and family room. Staging helps buyers visualize how the space can be utilized. When they walk in and see furniture arranged thoughtfully, they can more easily imagine living there. However, you don’t need to stage every room in the house. Part staging—covering three or four rooms—often does the trick and is far more cost-effective.

I typically pay for part staging when selling an empty house. A well-staged home not only helps to attract buyers but also may lead to a quicker sale at a higher price.

Decluttering and Depersonalizing

If your home is furnished, decluttering is essential. You want your space to feel open, airy, and ready for someone else to move in. Less is more when it comes to furniture and decor. Large pieces of furniture should be removed if they make the space feel cramped. Additionally, consider removing personal photos and memorabilia. You want potential buyers to envision themselves in the home, not be distracted by your family photos or personal style.

Curb Appeal

Don’t forget about the exterior. The front of the house is the first thing buyers will see, and first impressions matter. If your front yard lacks color or life, consider adding some potted plants or flowers. A well-maintained yard can make your home feel more inviting and set the tone for the rest of the showing.

2. Choosing the Right Realtor

Selecting the right real estate agent is one of the most critical decisions you'll make when selling your home. I always recommend interviewing three to four realtors before making a decision. While many agents offer similar services, not all are created equal.

Communication and Chemistry Matter

It's important to work with a realtor you connect with on a personal level because you’ll be interacting with them throughout the entire process. Selling a house can be stressful, and having a realtor who communicates well and understands your needs can make the process much smoother. Don’t just meet someone at an open house and hire them on the spot. Take the time to ensure they have the experience, market knowledge, and communication skills you need.

3. Understanding Commissions and the Current Market

The real estate industry is currently going through some changes, and it's crucial to understand how commissions work. A recent lawsuit in the Midwest suggested that realtors colluded to make sellers pay commissions to buyer’s agents. This is not how it works in practice.

Typically, sellers cover the buyer’s agent commission because most buyers can't afford to pay their own agent. Buyers are often stretched thin, especially when putting down a large deposit, so it's easier for the seller, who often has more equity, to absorb that cost. Without this commission, buyer’s agents wouldn’t have an incentive to show the property to their clients.

4. Dealing with Offers: It's Not Just About the Highest Price

Once your home is on the market, you'll start receiving offers. The highest offer isn't always the best one. Some buyers offer a high price only to negotiate it down later in escrow by requesting costly repairs or credits for items like a new roof. In these cases, the price you initially accepted can be whittled down, costing you more time and stress.

Buyer Commitment

I like to interview the buyer's agent and even the buyer if possible. One important question to consider is how much the buyer loves the home. If you have two offers, and one buyer absolutely loves the house while the other one is less enthusiastic, I would advise going with the buyer who is passionate about the home, even if their offer is slightly lower. Buyers who love the property are less likely to back out of escrow or make unreasonable demands.

5. The Escrow Process and Contingencies

After you accept an offer, the escrow process begins. In this stage, buyers have the power to back out based on certain contingencies like inspections, appraisals, and loan approvals.

Inspection Contingencies

Inspections are often the most significant hurdle during escrow. After a buyer inspects the property, they might request repairs or ask for a credit. It’s essential to have a clear understanding of what you’re willing to negotiate to keep the deal moving forward.

Appraisal Contingencies

If your agent has priced the home correctly, you shouldn’t have an issue with the appraisal. However, if the home is priced too high and the appraisal comes in lower, it can jeopardize the deal. It's important to price your home based on market conditions and comparable sales.

Loan Contingencies

Just because a buyer has a pre-approval letter doesn’t mean they are guaranteed to get the loan. As a seller’s agent, I always make sure to communicate with the buyer’s mortgage broker to ensure they are well-qualified. Some buyers may not fully understand their financial situation, and mortgage brokers don’t always ask enough detailed questions upfront. It’s crucial to dig deeper and ask if the buyer has additional obligations like alimony payments or irregular income sources. This due diligence can save you from accepting an offer that could fall through later.

6. Removing Contingencies and Closing Escrow

Once all contingencies are removed, the buyer is generally committed to the deal. However, even at this stage, buyers can still back out, though doing so puts their deposit at risk.

Understanding Deposits

Typically, buyers put down a 3% deposit when entering escrow. If the buyer backs out after contingencies are removed, you can potentially claim this deposit. However, many sellers mistakenly believe they are automatically entitled to the full deposit if the buyer backs out. In most cases, it goes to arbitration, and you may only receive a portion of the deposit. Additionally, while you’re going through this legal process, your home is tied up in escrow, preventing you from relisting it.

Market Timing

When deciding whether to pursue a deposit claim, consider the current market conditions. If the market is strong and prices are rising, it might be better to relist the home quickly rather than fight for a deposit that may not be fully awarded. If the market is softening, it might be worth the wait to recoup some of the lost value.

7. The Importance of Hiring a Professional Realtor

With all the complexities involved in selling a home, it's essential to hire a professional realtor who knows the market and can guide you through each step of the process. A good realtor will help ensure your home is priced correctly, marketed effectively, and sold with as little stress as possible.

Knowledge of Contracts and Legalities

Real estate contracts are becoming more complex, and there are numerous ways for a buyer to back out of a deal. A skilled listing agent will understand how to navigate these contracts and minimize the chances of a deal falling apart.

Conclusion

Selling your home is one of the biggest financial decisions you'll make, and having the right support is crucial. From staging and decluttering to negotiating offers and navigating escrow, each step of the process requires careful consideration and expertise. As a seasoned realtor with Rodeo Realty, I'm here to make the process as seamless as possible. If you're thinking about selling your home, or simply want to know more about the market, feel free to reach out.