Seller Resources

The interest rate on an owner-carried loan is negotiable. Ask your agent to check with a lender or mortgage broker to determine the current rate on institutional first (or second) loans. Seller financing typically costs less than conventional financing because sellers don’t charge loan fees (points). Interest rates on an owner-carried loan will also be influenced by current Treasury bill and certificate of deposit rates. Sellers usually aren’t willing to carry a loan for a lower return than they would earn if their money was invested elsewhere.

Seller financing offers tax breaks for sellers and alternative financing for buyers who can’t qualify for conventional loans. If you are a seller, the risks you face are the same as those facing any lender: Is the borrower a good credit risk? Will the property hold enough value over time to allow for the repayment of all loans made against it? You should run a full credit check on the borrower, require hazard insurance on the property, and include a due-on-sale clause. There also are financing, disclosure, and repayment-term requirements that need to be met. It is wise to consult a lawyer when putting together this kind of transaction.

The list price is how much a house is advertised for and is usually only an estimate of what a seller would like to get for the property. The sales price is the amount a property actually sells for. It may be the same as the listing price, or higher or lower, depending on how accurately the property was originally priced and on market conditions. If you are a seller, you may need to adjust the listing price if there have been no offers within the first few months of the property’s listing period.

Price and condition are the two most important factors in selling a home, even in a down market. The first step is to price your home correctly. Use comparative sales information from your agent, or pay for a professional appraiser (usually $200 to $300), to objectively evaluate your home’s worth.

Second, go through the house and repair any obvious cosmetic defects that could deter a buyer. In a down market, you may have to consider lowering your price and/or making a major repair, such as replacing the roof, in order to lure a buyer.

Also, make sure that your home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage and a listing on the local multiple listing service or online listings provider.

The appraised value of a house is a certified appraiser’s opinion of the worth of a home at a given point in time. Lenders require appraisals as part of the loan application process.

Market value is what price the house will bring at a given point in time. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker. Either an appraisal or a comparative market analysis is the most accurate way to determine what your home is worth.

It’s very important to price your home according to current market conditions. Because the real estate market is continually changing, and market fluctuations have an effect on property values, it’s imperative to select your list price based on the most recent comparable sales in your neighborhood. A so-called comparative market analysis provides the background data upon which to base your list-price decision. When you prepare to sell and are interviewing agents, study each agent’s comparable sales report (the data should be no more than three months old). If all agents agree on a price range for your home, go with the consensus. Watch out for an agent whose opinion of value is considerably higher than the others.

Doing whatever you can to put your houses’ best face forward is very important if you want to get close to your asking price or sell as quickly as possible. Short of spending a lot of money, here are several ideas for making your home show better:

• Sweep the sidewalk, mow the lawn, pull weeds from the garden and clean the yard.
• Clean the windows (both inside and out) and make sure the paint is not chipped or flaking. Make sure there are no sources of lead in the paint.
• Be sure that the doorbell works.
• Clean and spruce up all rooms, furnishings, floors, walls and ceilings. It’s especially important that the bathroom and kitchen are spotless.
• Organize closets.
• Make sure the basic appliances and fixtures work.
• Get rid of leaky faucets and frayed cords.
• Make sure the house smells good and hide the kitty litter.
• Put vases of fresh flowers throughout the house.
• Have pleasant background music playing to set your stage.

A real estate agent is a good source for finding out the status of the local housing market along with your statewide association of Realtors. For overall housing statistics, U.S. Housing Markets regularly publishes quarterly reports on home building and home buying. Here are some other sources:

• The housing research firm is located in Canton, Mich.; call (800) 755-6269 for information.
• The U.S. Bureau of the Census in Washington, D.C.; (301) 763-2422.