Are you thinking of listing your condo on the market? Since condos sell a little differently than houses, we’ve compiled a list of the most important questions for Chicago-area condo owners who are looking to sell.
The basics of selling a condo function much like selling a home: you list it, price it thoughtfully and negotiate based on the offers you receive. However, the condo’s location and HOA (Homeowner’s Association) will be two important factors that buyers take into consideration that don’t apply to single-family homes.
We’ll get to condo pricing in a moment. A buyer’s lender will often conduct a review of the condo’s HOA to look at how many cash reserves are in place for repairs, the ratio of renters to owners, and to see if there are any pending litigations or other issues that could affect the sale.
Finding “the best” time to sell your condo depends largely on the neighborhood and current market trends. A trustworthy real estate agent who has sold condos and knows the local market will be able to give you good advice on when to sell. While the rule of thumb is that the spring is always a good time to list a property, it also depends on how the housing market is doing, location and the condition of the property you want to sell.
It might be tempting to sell your home without an agent, especially since sellers pay commission fees to both buyer and seller agents at closing. The FSBO (For Sale By Owner) method of selling might appear to save money, but working with an agent can actually help you price your home better and negotiate a good sale price.
Realtors bring years of experience to the market. They’ll give advice about how to stage your home, how to price it wisely, and how to write counter-offers to sellers. While a successful FSBO can save you money, it is fairly rare and often takes much longer to close.
Deciding whether or not to make repairs to your home before selling depends on your property condition and on how you want to sell it. Making large repairs might increase your condo’s value, but it can put a dent in your finances and there’s no guarantee that you’ll recoup the cost.
On the other hand, sellers are often obligated to make repairs based on village codes and findings from the buyer’s inspection. Ask your realtor to help you anticipate what kinds of repairs might need to be made, and their experience selling condos in the area will help you make a smart, cost-effective decision.
Costs for selling a condo can be broken down into two categories: costs to prepare it to sell, and the commission and fees associated with the sale itself. Expect to put some money into cleaning your home and making simple upgrades like new paint or landscaping. Staging your home to sell will cost you as well. Once you’ve accepted an offer, you will pay between 5% and 6% of the sale price as commission to the buyer and seller agents. It’s also a good idea to check in with your mortgage lender to see what fees you might have to pay when ending your mortgage on the property.
It’s hard to price a condo at a rate that will sell quickly but at a beneficial price to you. Condo pricing will be based on the unit’s square footage, similar sold condos, its neighborhood location, and other factors like its location in the building (e.g., does it have a view of Lake Michigan or of a nearby parking lot?). Your agent will use the MLS and their experience to price your condo at an accurate rate so that it sells at a good price without sitting too long on the market.
One of the keys to selling your home is making it look attractive to potential buyers during showings. Simple repairs like patching cracks and removing mildew and mold can go a long way in making your condo look more attractive (and a deep clean is strongly recommended as well).
Consult your realtor to see if staging your condo might help it sell. This can be costly, especially if you have to move out furniture and belongings that are already there, but it might help depending on your condo’s location and the local market.
The length of time that it takes to sell a condo depends on its location and the demand in the market. On average, Chicago condos sit on the market for 40-70 days, but don’t count on this number when planning out next steps. The average closing period in Chicago is 45 days, but this can vary as well.
When an offer is made on your home, you have the choice of accepting, rejecting, or providing a counteroffer. Once you and the buyer have settled on a sale price, you will go under contract and the attorney review period will begin. The buyer will schedule their home inspection and your attorney will review your contract. The first few days after going under contract will be busy, so be prepared to schedule inspections and communicate with your agent and attorney to get the ball rolling on all necessary items.
Sometimes a buyer’s ability to purchase your condo is based on the sale of their property. If the buyer’s previous home doesn’t sell in time, the contract on your condo is terminated. A sale contingency helps the buyer but is risky to the seller, since there’s no guarantee even after going under contract that the buyer’s home will sell in time. A settlement or closing contingency means that the buyer is already under contract and a closing date has been tentatively scheduled, so it's slightly less risky to the seller.
After the buyer’s home inspection, their lender will send a third-party professional to conduct an appraisal. The appraisal helps the lenders know that the loan amount they are giving to the buyer is representative of the actual value of the home. One of the reasons it’s important to price your home correctly is that if the appraisal comes in below the sale price, the lender won’t approve the buyer’s loan and the buyer will have to back out.
When you sell a condo that has a mortgage, the buyer’s financing will pay off your lender. After you have paid closing costs, the remaining equity in the home goes to you. Assuming that your condo hasn’t dropped in value, you will make a profit based on market values and equity that you’ve built up over time with mortgage payments.
With over a decade of experience helping clients buy and sell homes in Chicago, we understand the complications that come with the selling process. Feel free to reach out to our team with any questions you have, or check out our Advanced Search feature for local listings and start the search for your next home today.
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