A home pre-listing audit is an important part of preparing for a smooth real estate sales process. With any planned transaction, the more details you’re clear on before you begin, the better position you’ll start in. Of course, the better your starting position, the better your ending position. Thus, it behooves sellers and their agents to collect as much data as possible prior to listing a home for sale.
Even so, the majority of home sales across the country don’t start with such a process. For our real estate team, it’s the very first step we take with any listing. The purpose is threefold:
- have an in-depth discussion of what the seller’s goals are
- identify what upgrades and/or issues are present that can affect the price of the home
- determine what the market justifies price-wise for such a property
By accomplishing the above, we’re able to optimize the selling process from start to finish. This provides a great experience for you as a seller. Let’s go through each of the three components of a home pre-listing audit and why they’re important.
The Seller Interview
The first component of the home pre-listing audit is the seller interview. This is the perfect opportunity to brief your realtor on the most important details of your home. You should cover the basic details, unique features, and any known issues with the property. It’s also a chance to discuss your reasons for selling, your timeline and how important it is that the home sells quickly.
Questions we commonly ask during the seller interview include the following:
- Why do you want to sell your home?
- Do you have an idea of what price you’d like to list for?
- When do you want to sell by?
- What do you love most about your home?
- Are there any issues with your home that you’re aware of?
- Have you sold a home before? How did it go?
This information is instrumental to your realtor for creating a marketing plan that matches your goals. Surprisingly, many real estate agents do not ask for these details nor take them into consideration.
Depending on your desired timeline, your realtor may need to front-load marketing efforts that would otherwise be spaced out a bit more. The target price may need to be more aggressive to attract more buyers quickly. If your desired price is unrealistic, your realtor can prepare a proposal for lowering the price ahead of your inspection appointment.
Understanding what you love about your home gives your realtor points to emphasize in the listing description. Last but certainly not least, hearing about any previous experiences you’ve had with selling homes can help your realtor provide the best possible experience for you.
The Home Inspection
To be clear, this is not the same as the inspection that home buyers will order during escrow. The realty team performs this informal inspection with the seller and it serves two main purposes. Firstly, it provides a more comprehensive account for any marketable features of the home that may have been missed during the interview. Secondly, it will bring to light any issues you may have forgotten about or wasn’t aware of during the interview.
It may seem that ignorance is bliss when it comes to finding issues right before listing your home for sale. However, it actually provides a great advantage for you. It gives you the chance to decide if you want to address issues before listing, or simply offer the buyer a repair discount.
While you may be tempted to keep disclosures as minimal as possible, we’ve found that transparency and honesty are the best practice. By being forthright about issues, it greatly reduces the chance that the deal will fall through in escrow due to the buyer inspection—something that happens more frequently than you might think.
In fact, according to the National Association of Realtors, nearly 3% of closings are delayed or terminated due to inspection issues.
The Comparative Market Analysis (CMA)
Any decent realtor will perform a market analysis of comparable properties prior to discussing a target price with their seller. However, a CMA can range wildly in utility depending on how an agent approaches it.
Most CMAs are simply a list of homes within 1 mile of the subject property, that are as similar in size, quantity of bedrooms and quantity of bathrooms. A lot more work needs to be done to make the report useful to the seller, but some agents simply stop at this point.
Firstly, such a report will not only include sold properties, but active and pending properties as well. You might think this is a good thing, because it allows for a greater amount of properties to compare with. However, there’s no guarantee that active and pending listings will close for their listing price. This can easily skew average values up or down, sometimes significantly.
Secondly, there are many other aspects to a home that impact its value. Did you recently remodel the home? How large is the lot? Is the yard a well-maintained paradise, or a weed-covered dirt mound? Is the home open concept? Did you wire your home for modern amenities like security cameras, media centers and electric car charging?
Finally, the surrounding area can make an enormous difference on price. For coastal homes, being on the beach side of the street versus the inland side of the street would drastically affect the price. If the two homes are in different school districts, this could play a factor. Perhaps one home is on a busy road and the other is at the quiet end of a cul-de-sac.
It should be clear by now why each element of a home pre-listing audit is necessary for when beginning the real estate sales process. Only by taking all of this into consideration and adjusting accordingly can we reach a truly meaningful target price for your home. This will provide plenty of ammunition during negotiations to justify the asking price as well, giving you a stronger position in the process.