Facebook
Twitter
Pinterest
Copy Link
Home Sellers’ FAQs: Inspections, Contingencies, and More
Thinking of selling your home? Home sellers deal with appraisals, inspections, contingencies, staging, and more. We answer your most frequently asked questions below.
What is a Comparative Market Analysis?
A Comparative Market Analysis or CMA is a detailed report that estimates the value of your home based on the sale of similar properties in your area. Typically, the seller’s agent completes the report after inspecting your home and researching other similar properties near yours. They will also take into account regional market trends.
One of our local real estate experts can provide a free analysis. Knowing this information will allow you to make informed decisions moving forward. It can also aid in determining what remodels or potential upgrades would be worth it to make before putting your home on the market.
How is an appraisal different from a CMA?
An appraisal of your home will occur further along in the home-selling process. Once a buyer makes an offer, their lender will require an appraisal for financing purposes. It ensures that the bank does not lend the buyer more money than the property is worth. Typically, the home buyer will pay for the appraisal.
Is a pre-listing inspection worth it?
While a Comparative Market Analysis will identify the value of your home, a pre-listing inspection can take place before the home is put on the market to ensure it is ready to list. A home inspector examines the property and identifies any repairs or problems that may need to be addressed. Pre-listing inspections also allow the seller to address and avoid any surprises that might scare off a home buyer. Additionally, they help instill a sense of trust so that the buyer knows more about the property upfront and feels more confident about it.
If the pre-listing inspection uncovers any major repairs that need to be completed prior to selling the property, the Windermere Ready Program is a loan program that can help sellers with the upfront costs. It provides a loan specifically for repairs and upgrades to a property and can enhance your home with the goal of it selling for more and in less time.
What types of contingencies will I face?
Once a buyer puts in an offer, it is common for the offer to come with contingencies. Five of the most common contingencies in a home sale are home inspection, financing, appraisal, home sale, and title contingencies.
These contingencies protect the buyers’ interest, but the seller also has certain options in each case. For example, in a home sale contingency, it is the seller’s choice on whether or not to accept the offer contingent upon the sale of the buyer’s home. A seller could also include a “bump” clause to keep showing the property. If you receive a new offer, the first buyer has a specific time period to either choose to move forward or back out of the contract.
What if a buyer backs out?
First and foremost, it will be important to work with your real estate agent to fully understand the buyer’s offer. Once agreed upon, the buyer will put their earnest money into escrow.
If a buyer backs out for a reason other than those stipulated in the contract, the seller receives the earnest money. If the buyer backs out for a reason that is stipulated in the contract, then they will receive their earnest money back.
As a seller, you are also able to accept backup offers and/or refuse offers and counteroffers.
Should I stage my home?
Most real estate professionals will agree, staging a home is worth it. Staged homes often sell faster and for more money than un-staged homes. Many buyers begin their house hunt online and a staged home can make a good first impression. Highly-quality staging and excellent professional photos can grab buyers’ attention and help them easily imagine living there.
If you still have questions about the selling process, our agents are always happy to help. Feel free to reach out. Additionally, check out our guide to selling a home for more useful information and tips.
New Agent Spotlight: Ashley Mathews
We’re excited to highlight our new Broker, Ashley Mathews. Highly involved in our community, Ashley is passionate about helping people. She has a background in marketing and a range of industry experiences. Read on to find out more!
What unique professional skills do you possess that enhance your abilities as a realtor?
I started working at my mom’s travel agency at around 12 years old, which taught me organization in a transactional industry. After stints as a realtor in the fast-paced New York City market, I moved on to the marketing side of the business. I am a marketer at heart and bring the combination of my marketing expertise to my transactional knowledge of real estate, which benefits my clients.
What drew you to real estate?
Real estate has been the backdrop to my life for as long as I can remember. I love the ever-changing landscape, market conditions, and being able to impact someone’s life in such a monumental way.
How long have you lived here and what brought you here?
I have lived on Bainbridge Island for 12 years. I moved here from New York City after meeting a man from Bainbridge Island. He is now my husband of ten years.
What personality traits do you think are important in this profession?
I think it’s important to be a good listener, have the ability to roll with the punches, have a good sense of humor, and possess dedication and integrity.
What area do you serve and what do you love about it?
I serve Bainbridge Island and have a great deal of first-hand knowledge of Bainbridge’s unique neighborhoods, having lived in downtown Winslow, Fletcher Bay, the Sand Spit, and Pleasant Beach. I love its beauty and the fact that it can be whatever one desires. Sometimes I enjoy its quiet serenity. Other times, I want to enjoy one of our award-winning restaurants. There is something here for everyone.
What made you decide to work with Windermere?
My passion for service has always made me a fan of the Windermere Foundation and its work. The Windermere Brokers on Bainbridge Island have such a great reputation and I wanted to be on their team. Blue is also my favorite color.
How are you involved in the community?
I serve as a board member for the Bainbridge Island Museum of Art, and I serve as Planning Commissioner for the City of Bainbridge Island. Additionally, I serve as the Chair of the Board Development Committee for Treehouse For Kids and sit on its Board of Directors Executive Committee. For over a decade, I’ve been involved in Bainbridge Island’s vibrant equestrian community and am a member of the Bainbridge Island Saddle Club. I love the arts and have performed with the Bainbridge Chorale and on the Bainbridge Performing Arts stage in “Chicago” and “Cats”. I am also a lifetime member of the NAACP.
Is there anything else you’d like to share with us?
I have a 19-year-old daughter who inspires me every day as she navigates our new normal as a college freshman, as well as a beautiful and not so smart Doberman named Grace and a beautiful and very smart horse named Nektonia. I love to meet new Islanders so if you see me come say hi. Human connection is so important these days.
We’re so glad that Ashley Mathews has joined us. We know her local expertise and her integrity make her an excellent choice for buyers and sellers. You can connect with her on Facebook or through her website.
Home Sale Contingent Offer – Pros and Cons
There are a lot of specific terms used in real estate, and you may wonder what a home sale contingent offer is. Who does it affect and what are the advantages and disadvantages? We’re here to provide you with the information you need.
A Home Sale Contingent Offer
Offers typically come with contingencies such as a home inspection but an offer that is specifically dependent on the sale of another property is a home sale contingent offer. If there’s a home sale contingent offer, the MLS (Multiple Listings Service) will list the property as contingent. So if someone else writes up a better offer then that one is “bumpable” by someone else.
Types of Home Sale Contingencies
There are two types of home sale contingencies. One is a contingent offer and one is a pending sale contingency, which would say the other property is already under contract.
Suppose the potential homebuyer has not obtained or agreed to an offer on their own house. In that case, they may submit a home sale contingent offer. Through this contingency, the buyer effectively has “first dibs” on the house. The seller can include a “bump” clause to continue to show the property to other potential buyers. If the seller receives an offer, the first buyer has a specified amount of time to decide whether they want to move on with their contract.
If the potential homebuyer has acquired an offer and has a closing date set, they may include a pending sale contingency. Since a home is not officially “sold” until closing occurs, this protects the potential homebuyer if the deal falls through. If the house is sold, then the contract is still valid. If the deal falls through, so does the homebuyer’s offer.
Earnest money or good faith money may also be given to a seller when a buyer includes a contingency clause. This money represents the buyer’s good faith to continue with the purchase if the outlined conditions are met. Similar to a deposit, the earnest money is typically held in an escrow account until closing and then it is applied to the down payment and closing costs.
Pros and Cons of a Home Sale Contingent Offer
There are many things for the seller to consider when accepting a home sale contingent offer. If you are selling your home, you should note that there is no guarantee that the buyer’s home will sell. So it is essential to specify a timeframe for the buyer to sell their property.
On the other hand, if your property has been on the market for a while, then a home sale contingent offer may be a good option. To protect yourself as a seller, you can include a “bump” clause in the contract to obtain some leverage in the sale. You would state a specified amount of time after receiving another offer for the first buyer to decide whether they want to pursue the contract. If the buyer still wants to continue, they must remove the contingency clause to resume the contract. If the buyer does not respond in the specified amount of time, you can back out of the contract and sell to the new party.
Pros and Cons of Buying a Home with a Contingent Offer
If you are looking to buy, you might also be a home seller at the same time. If this is the case, it is crucial to understand both sides. As a buyer, a home sale contingent offer allows you to smoothly transition between houses. However, a home sale contingent offer comes with risk. You’re essentially asking the home seller to hold the house for you and risk not being able to sell their home if you’re unable to sell yours. And, when you’re looking to buy in a popular place like Bainbridge Island, multiple offer situations are common. So you’re competing with many eager buyers. Other buyers may be able to buy the home you want without having to sell their current home. Additionally, some may be willing to waive other contingencies in order to win a multiple offer situation. This does not mean that you need to do that too if that makes you uncomfortable. But it is important to consider contingencies carefully.
Bottom Line
As you can see, there are different ways to look at a home sale contingent offer. It all comes down to the offer made on the property, any time constraint on the seller to close, and the seller’s preferences. A knowledgeable, local real estate agent, will advise you, advocate on your behalf, and guide you through the process.
Selling in Winter: 4 Reasons Why It’s a Good Time to Sell
Selling in winter may not seem optimal but there are actually some important advantages to consider, especially given our current market. Here are four reasons why now may be the right time for you to sell.
1. Demand is High and Supply is Low
There are many anxious buyers who want to move to our area. Western Washington has seen a significant increase in demand. Here on Bainbridge Island, closed sales were up 43.6% year-over-year in 2020’s third quarter. Multiple offer situations have become common and our agents have seen quite an increase in all-cash offers. Additionally, many families are able to work remotely and they’re drawn to all Bainbridge Island offers.
2. Mortgage Rates Have Hit Historic Lows
During 2020, mortgage rates hit all-time lows a dozen times. As of December 3, 2020, rates on a 30-year and 15-year fixed-rate mortgage (FRM) have dropped to 2.7% and 2.3%, respectively. These low-interest rates incentivize serious buyers and create a sense of urgency for many.
3. Home Prices Are Up
Since inventory is low, prices have gone up. In fact, the median sale price was 1049K in 2020’s third quarter, which was up 19.9% year-over-year. So you could potentially sell your house for top dollar. If you’ve properly prepared your home and your agent is marketing it effectively, you could also experience a multiple offer situation.
4. Many Buyers’ Priorities Have Shifted
With the pandemic, many buyers are focusing more on finding homes that offer space: a backyard, proximity to nature, and room for their children to play and/or a home office. Bainbridge offers all of that as well as gorgeous beaches and hiking trails, a strong sense of community and easy access to the city. This appeals to first-time buyers as well as those looking for luxury homes. So even though it’s not the popular time to put your home on the market, it’s still a strong seller’s market and there are still plenty of serious buyers ready to make an offer on the right property.
Why You Should Stage Your Home in a Seller’s Market
We have a strong seller’s market, which means it’s an excellent time to sell your home. Inventory remains low and there are many anxious buyers wanting to move out of crowded cities to a beautiful place like Bainbridge Island. In our third quarter, our closed sales were up by 46% year-over-year. But just because our market (or any market) is doing well doesn’t mean you should casually list your home and expect to experience an incredible multiple offer situation. Some sellers are asking our agents this question: “Why do I need to stage my house if the market is so hot?” Our answer: It may be the best way to yield the outcome you want. Here are some key facts and figures for you to consider.
Proper Preparation Still Matters
If you have a good agent, you’ll know how important it is to take the time to make sure your home is ready to put on the market. Even though our market is strong with many success stories, there are still some houses that are sitting on the market for longer than others. Sometimes it’s because they were priced too high or they didn’t take the time to prepare. Most buyers right now don’t want a fixer-upper, in part because of the pandemic. They don’t want to have to deal with workers in their house. So, carefully prepare your home and utilize your agent’s local knowledge, resources, and expertise.
Think Like a Buyer
First impressions are everything and photos are usually buyers’ first glimpse of your property. In fact, 95% of people search for homes online. So, you want to grab their attention with beautiful visuals. In a recent report by the NAR (National Association of Realtors), buyers rated photos as the most important element in their home search process. They rated it higher than the description of the home and higher than the location.
Now, you may think a photographer can simply take photos of your home as it is. However, if your home is cluttered or filled with various personal touches (as most of our homes are), it can be difficult for buyers to imagine themselves living there. Expert stagers can draw people in and provide just the right amount of detail. The research supports this as well. According to the NAR, 83% of buyers’ agents said staging made it easier for buyers to see themselves living in the home they were viewing.
The Potential Return on Your Investment
According to last year’s NAR report, sellers’ agents stated that when staging a home, 39% saw an increase in the dollar value of the home, anywhere from one to ten percent. Additionally, 28% of sellers’ agents saw a decrease in time on the market for staged homes. So if you stage your home using local experts, it could greatly benefit you, especially when you think of how this information applies to our current, local market. Serious buyers are out there but you want to make sure you’re putting your best foot forward in order to achieve success.
Bainbridge Island’s Market: Third Quarter Review and Forecast
Bainbridge Island’s market had an incredibly strong third quarter. We’ve compiled key stats below to provide a comprehensive review of our market, as well as insights and predictions from Windermere Real Estate’s Chief Economist, Matthew Gardner.
Our Strong Seller’s Market
It’s a hot seller’s market here on Bainbridge Island. Inventory remains low and demand is still high. In our third quarter, closed sales were up 43.6% year-over-year. Buyers should be aware that multiple offer situations are very common. Our Brokers have seen a significant increase in all-cash offers. In September alone (when the market typically starts to cool down), 37% of all Bainbridge Island residential sales were from all-cash buyers.
Market Predictions
Although mortgage rates remain historically low and demand is high, our Chief Economist, Matthew Gardner, has some concerns about how this may impact real estate down the road. “We may be heading towards a period where we see houses turn over at a far slower pace as we stay in our homes for longer than ever…this could be a problem as it leads to persistently low levels of inventory for sale, which itself could lead to prices continuing to rise at above-average rates and that would further hit affordability.” As for mortgage rates, Gardner does not expect them to rise significantly any time soon. However, he says, “We should all be aware that there could be consequences to very low rates”.
Western Washington Review
Let’s zoom out a bit and look at our area. Below are highlights from The Western Washington Gardner Report provided by Windermere Real Estate’s Chief Economist, Matthew Gardner.
WESTERN WASHINGTON HOME SALES
- Total Sales: 11.6% increase from Q3/2019, and 45.9% higher than Q2/2020
- Homes for Sale: 41.7% lower than Q3/2019, but up 1.6% from Q2/2020
- Pending Sales: up 29% from Q2/2020
WESTERN WASHINGTON HOME PRICES
- Average: $611,793 (up 17.1% from Q3/2019). Low mortgage rates and limited inventory are clearly pushing prices up.
- Prices will continue to increase as long as mortgage rates and inventory levels stay low. If this continues to be the case, affordability issues will become more apparent in many markets.
DAYS ON MARKET, WESTERN WASHINGTON
- Average: 36 days (an average of 4 fewer days than in Q2/2020 and 2 fewer days than in Q3/2019)
- Kitsap County’s average days on market: 20
Conclusion
In Gardner’s Western Washington Report, he states that, although we have a strong seller’s market that is very buoyant, he’s “starting to see affordability issues increase in many areas—not just in the central Puget Sound region—and this is concerning. Perhaps the winter will act to cool the market, but something is telling me we shouldn’t count on it.”
