Step-5: Frequently Asked Questions

question_marks1. Once we establish the Listing Price, can the Price be changed?
2. Should I be available at the Home when potential Buyers visit ?
3. How effective is it to have an Open House?
4. If I don’t have an acceptable Offer within the first 30 days, What does that imply?
5. What expenses am I responsible for when I sell my Home.
6. Do I have any Security concerns about letting potential Buyers visit my Home when I am not here?
7. When I receive an Inspection Report from the Buyer with a list of items to be corrected, I am I obligated to fix all of the requested items?
8. If the Appraisal prepared for the Buyers Financial Institution does not support the agreed Sale Price, What happens?
9. What does it mean to have a “Cloud on the Title”?
10. I have read newspaper article’s refer to the Median Price of a home vs the Average Price of a home, what is the difference?
11. How is the Square Foot size of my home determined?
12. What is the Seller’s Property Disclosure form?
13. Am I affected by the Lead Base Paint disclosure rules.
14. How do I determine the Taxable Gain on the sale of my home?
15. What is the difference between a Listing Agent and a Selling Agent.

Once we establish the Listing Price, can the Price be changed?

YES – The initial listing price is only the start. If you find your are getting “overwhelmed” with showings, we may decide to raise the Price before an offer comes. Conversely, if few showings and no offers are coming in, we may decide to lower the Price. Market conditions constantly change, you have the flexibility to meet these changes.

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Should I be available at the Home when potential Buyers visit

NO – When potential Buyers tour your home, they are there for the purpose of determining if your home meets their needs. As a general rule, they are with their Agent and wish to be totally unencumbered to speaking objectively about the home with their Agent. Your presence can prevent Buyers from speaking openly about their impressions or to ask questions they may have.

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How effective is it to have an Open House?

DEPENDS – Many factors are at work here. Generally, it is good to have a fan open house for real estate professionals.  Open houses for the public are generally not productive in terms of selling your specific property.  It is a good way for new brokers to make contact with buyers and sellers before they establish more reliable sources of clients.

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If I don’t have an acceptable Offer within the first 30 days, What does that imply?

It depends!  How many showings are you getting? How many other homes in your neighborhood are selling, Have interest rates or other economic conditions changed in your area? What is the time of the year? Has your home been entered into the MLS and been given national exposure through the internet? If you are not getting activity after 30 days , you need to seriously review the initial marketing considerations and efforts.

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What expenses am I responsible for when I sell my Home.

Title insurance policy; payoff of your existing mortgage(s) including prepayment penalties, if any;
Broker’s commissions; unpaid property taxes for the current year; repairs which you have agreed to do; other miscellaneous items which you have accepted to pay.

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Do I have any Security concerns about letting potential Buyers visit my Home when I am not here?

While each Agent arranging for a visit to your home with a Buyer will be identified and registered, it is always best to avoid the problem of “tempting” anyone visiting your home.  It is strongly recommended that you NOT leave jewelry or other valuable items visible for Buyers visiting your home to see or take.

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When I receive an Inspection Report from the Buyer with a list of items to be corrected, am I obligated to fix all of the requested items?

All inspection items fall into one of two categories: 1. Health, Safety and Working Condition issues and 2. Cosmetic issues. Generally, health,safety and working condition issues should be repaired; “cosmetic” items require a judgment call. If you don’t complete the Health, Safety and Working Condition issues, the Buyer may terminate the contract and you will be faced with the same issues with the next Buyer. Cosmetic items are a function of cost and ease with which you can find a new buyer without fixing the items listed. Many times, the issues can be resolved by agreeing to a monetary settlement, with the Buyer actually having the work completed.

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If the Appraisal prepared for the Buyers Financial Institution does not support the agreed Sale Price, What happens?

In Colorado we cannot, by law, have contact with the appraiser. We can, however, speak with the listing agent about what the appraisal says, and go from there. If we cannot reach a satisfactory solution, then either the Buyer is required to come up with a larger down payment or the Seller needs to agree to reduce the price. If all else fails, then the contract may be terminated, and the marketing efforts to find a new Buyer continue.

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What does it mean to have a “Cloud on the Title”?

During the closing process on the sale of your home, Seller is required to provide a Title Opinion stating that Seller does in fact have the ability to convey Title in the property being sold free and clear to Buyers. If during the examination of Title, it is discovered that an encroachment , lien or easement on the property has been placed of record; it is said to place a “Cloud on the Title”. These items must be resolved prior to completing the sale of the property.

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I have read newspaper article’s refer to the Median Price of a home vs the Average Price of a home, what is the difference?

These statistics are often referred to as a means of indicating the trend of the housing market pricing. The median price is the midpoint of all homes sold in a given period. Midpoint means half the homes sold for higher prices and half the homes sold for lower prices. The average price of a home is calculated by adding the price of all homes sold and dividing by the number of homes sold in the same time period. In a given period, the average home price may increase if fewer but more expensive homes sold, while the median price of homes may not be appreciating. It is helpful to understand the difference when establishing a price for your home.

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How is the Square Foot size of my home determined?

Square feet as generally defined in Summit County Colorado includes all the square feet of heated living area. Unfinished basements are not included the stated square feet for a home. If all or a portion of the basement is finished, this amount of square is added to the square feet of the home but generally valued at about half the dollars per square foot of the upper levels. The one notable exception to this rule is a “walk-out” basement, in which case the finished square feet are usually included in the square feet of the home.  Because of our building conditions and topography in Summit County, actual basements are not as common as elsewhere, but walk-outs are very common.

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What is the Seller’s Property Disclosure form?

Although according to the Colorado Real Estate Commission-approved Listing Contract the Seller’s Property Disclosure MAY or MAY NOT be provided to any Buyer at the time a Purchase offer is accepted, I strongly urge Sellers to provide one. It gives notification to Buyers about the condition of the home including ALL KNOWN material defects.  Although the Seller may elect not to provide this, it raises a huge red flag in the minds of Buyers if the Seller refuses.

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Am I affected by the Lead Base Paint disclosure rules.

If construction of your home commenced prior to January 1978, you are required by HUD to complete a Lead Base Paint disclosure form prior to entering into a Contract for the Sale of your home. The penalties for not doing this may be severe and are established by federal statute.

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How do I determine the Taxable Gain on the sale of my home?

This is a matter for you to discuss in detail with your tax advisor! As a general rule, the gain on the sale of your home is determined by subtracting from the Sale price of your home, net of closing costs and commissions (excluding payoff of financial encumbrances) the price at which you bought the home plus any “capital improvements” you have subsequently made to the home prior to closing on the sale of the home. Many other factors affect this calculation, especially if you rented the property for a period of time while you owned it.

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What is the difference between a Listing Broker and a Selling Broker.

The LISTING Broker is the Real Estate Company (or individual) you select to represent your interests in the sale of your home. The SELLING Broker is the Real Estate Broker which actually brings a bona-fide Buyer with a Purchase Offer to Buy your home. About 75 percent of the time, the Listing Broker and the Selling Broker are two separate entities, although both the Listing and Selling Broker may on occasion be the same.

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NOTE: The questions and answers above are provided for your general information only. We do not provide Legal or Tax advice. You are strongly recommended to seek Independent Legal or Tax advice for any matters pertaining to your specific circumstances and conditions.

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