We know that the home-selling process can be complicated, so we’ve compiled our answers to the most frequently asked questions that we get from our Chicago clients when they want to sell their single-family property.
While a popular rule of thumb states that the spring is the best time to list your property, the sale of a home also depends on how the housing market is doing overall and on the home’s condition and location. Finding “the best time" to list your home is something that an experienced agent who knows the neighborhood and the market can help you with. During a seller’s market, you will most likely have little trouble getting offers on your home despite the season.
It’s tempting to try and sell your home without the help of a realtor, especially since sellers pay the commission fees of both buyer and seller agents at closing. Combined, those fees come to somewhere between 5% and 6% of the sale price, but selling without a realtor may not actually save you that much money.
The FSBO (For Sale By Owner) method might look cheaper, but you may find it harder to land on a good offer and it often takes much longer to close. Realtors bring years of experience to the selling process and can give advice about how to stage the home, price it wisely, and how to write counter-offers to sellers.
Deciding what kind of repairs to make on a home before listing depends largely on the property condition and how you want to price it. Making large repairs can increase your home’s value and boost its curb appeal, but they can also put a dent in your finances without guaranteeing that you will ever recoup the cost in a sale.
It is important, however, to be aware of what repairs may be required by village code before closing and to anticipate requests that a buyer might make after their inspection. Ask your realtor to help you anticipate what kinds of repairs might need to be made based on the local village code and the buyer’s market for your property, and their expertise selling homes in the area should come in handy.
To anticipate the costs associated with selling your home, think about them in two categories: how much it costs to prepare the home for showings, and the fees and costs associated with the sale itself.
Even if you plan on tackling big tasks like cleaning the home and tidying up the yard by yourself, expect to budget for easy upgrades like a fresh coat of updated fixtures. You can also consider staging, which can cost a substantial amount of money but may boost the property’s sale potential depending on the market.
Once you’ve accepted an offer, you will pay between 5% and 6% of the sale price in commission to the realtors. You will most likely also pay a fee to your attorney for looking over the contract and may have to cover repairs as required by the village or the buyer. There are also other fees like transfer fees owed to your City or Village, we want to say the total will be more like 8%-9% of the sales price. Additionally, it’s a good idea to make sure you’re aware of any pre-payment penalties due to your mortgage lender.
When it comes time to talk about price, your realtor will use the MLS database to conduct a CMA (comparative market analysis). A CMA will pull data on recently sold homes nearby that are similar to the property and will provide an estimated home value based on their selling prices and recent market trends. You can also conduct your own evaluation by looking at recently sold homes nearby to get your own understanding of trends in your area. Note that the CMA from an agent is different from an official appraisal conducted as part of the buying process by the prospective buyer’s mortgage lender.
It’s actually recommended that homeowners stay away during showings. This allows potential buyers to feel more at ease and envision themselves in the property. It will also let them feel more freedom to ask their realtors about potential issues and to be honest with themselves about how whether or not they want to move forward.
The amount of time that it takes to sell a home depends mostly on market trends in the area. On average, Chicago homes sit on the market for around 42 days, but don’t use this number as a guarantee when planning out your next steps. Sales can fall through even after offers are made or the home might be passed up by potential buyers for arbitrary reasons: it all depends on who is looking to buy at any given time.
Once an offer is made on your home (congratulations!), you can either accept, reject, or provide a counteroffer. As soon as you and the buyer have settled on a price, you will go under contract and the attorney review period will begin. A lot of paperwork and logistics are passed around and finalized during this period, so it’s very important to be ready to communicate with your agent and attorney regularly to get the ball rolling on all necessary items, especially within the first few days.
In certain scenarios, a buyer’s ability to purchase your property is based on the sale of their current home. If the buyer’s own home doesn’t sell in time, the contract on your property will be terminated. A sale contingency helps the buyer but it fairly risky to the seller, since there’s no guarantee even under contract that the buyer’s own home will sell in time. Another contingency you may see is a settlement or closing contingency, where the purchase is still contingent on the buyer’s own sale but occurs when they already have a closing date on the calendar, making it slightly less risky to you as 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 represents the actual value of the home. This is one of the reasons that it’s so important to price your home strategically from the get go; 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.
Selling a home before paying off the entire mortgage is fairly common. Once all of the paperwork is signed, the buyer’s own financing will pay off your lender. After you have paid the necessary closing costs, the remaining equity that you built up in the home or that accrued in value over the year all goes to you. Assuming that your home didn’t drop significantly in value, you will receive back the value you put in and make a profit as well.
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.