Consumer Podcast Ep 6: Looking to Sell? With Jackie Cassara and Cyndi Kane

We're back in the studio with Jackie and Cyndi to talk all about selling once again! In this episode we take more of a deep-dive into the selling process to learn what exactly to expect when selling a home. Hint: it's not all it's cracked up to be like on HGTV! 

We're talking timelines, negotiations, understanding important steps in the process. If you or someone you know is looking to sell, this is an excellent podcast episode to stream now!

Questions about the content in this podcast? Contact your ACAR Communications Director Kelli Moss by emailing kmoss@akronclevelandrealtors.com. 

Transcript

SPEAKER_02 0:05

Welcome back friends for another brand new episode of our consumer podcast. Today we have in our studio Cindy Kane and Jackie Cassara, two realtors who are very experienced in the field of buying and selling, and we're perfect candidates for our consumer podcast episode today, all about selling your home again. If you are somebody who has sold a home, you know, many years ago and is looking to sell again. There may be some differences between then and now. Um, and I'm glad that I can have these two in here today to discuss with me. The ACAR Home for All Podcast Consumer Edition, produced by the Akron Cleveland Association of Realtors, is a bi-weekly production where we will discuss all things real estate and home ownership. We'll educate you on realtor services, what you need to know before buying or selling, and much more. This podcast is for educational purposes only, and the opinions shared on this podcast do not necessarily represent the views of Akron Cleveland Realtors, Ohio Realtors, or the National Association of Realtors. Let's explore and uncover the information you need to make Northeast Ohio your home for all. Alright, everybody. Welcome back for another episode of our Home for All Consumer Podcast. I have in the studio with me Jackie Cassara and Cindy Kane for another episode. And I'm excited to have you guys here. We had a great episode previously as well. So this one is going to be about selling homes again. We did a whole episode on home selling, kind of just the process of what's going on in the background, things that people might not realize. So just to start off with this episode, is there anything that may have changed? This is for, you know, potentially a seller who has sold before but long ago. So is this fresh selling again? Um, is there anything that has potentially changed between the past and present in terms of putting up a home for sale? And are there any new procedures that return sellers may not know about, if so?

SPEAKER_00 2:13

Jackie, I'd like to start back at 2021 that we mentioned before and talk about the different terms that have become very commonplace in an offer now, where since our inventory has been so low, it's very common to be in a multiple offer situation. It's very common to see people write escalation clauses. Escalation clause indicates that I'm going to offer you, say, $200,000 for your house, but I'm willing to go up to $230 if I have to, in order to beat another offer. So escalation clauses are very common now. I had never used one prior to 2021. Interesting. Okay. The other thing is appraisal gap coverage. Because people had offered over listing price starting in 2021, it was very, very common. Pivotal. $20,000, $30,000, $40,000 over the list price and more. Potentially we could have had a problem with the house not appraising for that dollar amount. And therefore, the buyers would indicate to the seller you can still accept my offer and you can still expect to get the dollar amount that I told you I would pay you because I would be willing to bring the difference in in cash to fill any appraisal gap. So since 2021, a lot more terms that are very amenable to sellers have become very commonplace, but it also makes it a lot more complicated for the seller to fare it out which offer is going to be best for me to take.

SPEAKER_01 3:58

Right. And one of the biggest complexities that's happened in the last couple of years is consumers might be reading about these lawsuits that have led to how commission is paid. And so now we're looking at uh degrees of decoupling the commission, where something used to be taken care of exclusively on the side of the seller, now the commission is often treated differently and is paid by both the buyer and the seller, lots of different configurations on that, and everything is negotiable. So we have that that we're dealing with now that we didn't used to be. On a uh a little bit less legalistic side, we have this huge difference that TV has taken over what the process is like. And people are looking at housing now as being subject to being entertainment. And so they're watching things on HGTV, and there is this new vibe that has to do with um, you know, what would Aaron do with this house? You know, so that that people have ideas that they've received from media, yeah, and uh they walk into a house and they're you know thinking back and forth about whether they can apply those things. Yeah, you know, so they have a degree of knowledge that they didn't have previously, a degree of exposure that they didn't have previously. And as Cindy said, 2020 uh 2020 and 2021, with the advent of COVID, changed so many things that we really haven't come back to a lot of the things that we used to do routinely. It's really kind of shifted the industry and then combined with this who's paying what to the individual professionals who are working on the the uh sale and purchase. Yeah, you know, that it's uh it's pretty different. If people sold a long time ago, it's a very different process for them.

SPEAKER_02 5:44

Yeah, I did not even I mean that could be its own spin-off episode on its own, but just the impact of like HGTV on the home buying process, because that I'm sure a lot of people are like, oh, it's easy, it's just like on TV, and yeah, that's a very fascinating.

SPEAKER_01 5:57

I'll show you three, you'll buy one, you know.

SPEAKER_02 6:00

Exactly.

SPEAKER_01 6:00

I don't know the last time that happened.

SPEAKER_02 6:02

Yeah, that's that's a very good point. Well, okay, good to know, good to know. Um, I had kind of previously asked this in another episode, but kind of again just asking um when you are ready to sell and all these things are considered, how does your realtor help to put the word out about your house being up for sale? Do they spread the word for you? Do you need to do the work? Um, how will people know that the house is ready to be bought? The answer is yes.

SPEAKER_01 6:31

Everything. We advise, we collaborate, we market, um, we shout it from the highest mountaintop to get the largest number of people who might be able to or interested in buying that particular house. Gotcha. And you know, we talked previously about the idea of, you know, some houses are on main streets, others are buried in neighborhoods or rural, and all of that makes a difference in how and how effectively we're able to promote the market to the the most likely buying public who would be interested in that home.

SPEAKER_00 7:02

Until you expose your house to the market, will you ever really know how much it's worth? I had a question yesterday about appraisal. How does appraisal come into all of this? And it's interesting because when we're going in and we're helping a seller figure out what their home might be worth or what's their pricing strategy going to be, we're bringing an element of what we believe a buyer may be willing to pay, which is market value. The buyer's determining through the market and what's available, what they might be willing to pay, that may be different than what an appraiser is able to say the house is worth on behalf of the bank. Two very different things, which again is a complexity for the seller to have to determine when they're deciding which offers are they going to take. In fact, I've had sellers not accept the highest offer because we all knew that even though this buyer may say they would be willing to pay that, ultimately in the end, we were not going to realize that when it came to the appraisal.

SPEAKER_01 8:13

And the other thing that it does is to open up the renegotiation. The minute that it doesn't appraise, then everybody's back to square one in having to figure out what is the genuine value of this house.

SPEAKER_00 8:24

Yeah. There was a strategy that was going on early on, which is when appraisal gap was really established and became commonplace where buyers would come and just write crazy high offers. And the strategy was if I write you this high offer, clearly you'll take my offer and I'll knock out all those other buyers, we'll wait till it does an appraise, then we'll renegotiate for what the real value is. Oh boy. So appraisal is a fun one. Right.

SPEAKER_01 8:54

Inspections, appraisals, all of those things contribute to what the ultimate value of the property is in one person's mind. You know, and so it it it's a balancing act all the time.

SPEAKER_02 9:06

Right. So then again, question from someone who knows nothing potentially. Um the appraising process would happen in the beginning to help find or to help determine like the price point and all of that stuff for when you're doing the listing, correct?

SPEAKER_00 9:20

Yes.

SPEAKER_02 9:20

Okay.

SPEAKER_00 9:22

An opinion of value more often. Sure. Yeah. The appraisal, the specific appraisal is something that doesn't happen until you are in the process. You're already in contract. Then, as part of your lending process, you might have an appraisal, a specific appraisal done by a third party. Gotcha. If it's a cash offer, no appraisal is required by a third party. Gotcha. It may be something that somebody asks for and is part of the contract, but it's not going to be required because it's the lenders who are requiring the appraisals oftentimes. Sometimes even they don't require it, but most oftentimes when there's an appraisal, it's because the lender is requiring it.

SPEAKER_01 10:06

Right. Ours is a separate discipline from what the appraisers do. Gotcha. Um, you know, we do an estimated comparable uh value. You know, what it what is it like compared to the other properties of like kind, perhaps in this immediate area. Gotcha. The appraiser actually comes in and estimates what that individual house is like, also comparing it to comps, but they tend to be the comps that have sold, is what the appraiser is really looking at. Gotcha. Because they like to have something higher than and lower than in that immediate vicinity, which makes it challenging again in the rural areas.

SPEAKER_02 10:41

Yeah. It's there's a lot going on in the back end on that one. That's that's true. Um is there so when all of that is said and done, houses listed, people are touring it, and everything is awesome, and everything is great. Is there a usual time frame for how long that a home would take to sell? Um, does it vary by case-by-case basis? Um will your realtor be on sta I don't want to say on standby, but will they be with you through that whole process no matter how long it takes?

SPEAKER_01 11:14

Starting with the last question first, yes, we will be with you no matter how long it takes. And the time frame varies not only from market to market in terms of geography, but from time frame to time frame, sometimes being separated by a day and something that happened in the outside world. You know, and so it can be weather, it can be world circumstances, it can be money, it can be what's happening in terms of making the house easy to uh get a mortgage for. And so there are all kinds of internal and external factors that play into that, and so we'll have a moment in time where the impact of timing is kind of generally the same for most price points, and the next day it can shift.

SPEAKER_00 11:59

It's interesting that you bring up time. One of the things I commonly tell my clients is that your time frame is my time frame. This is what I do for a living. I'm not in a hurry for your house to sell, I'm not in a hurry for you to buy a house. My time frame is your time frame. So one of the things that may happen when you sit with a seller is they choose that they really, really believe their house is worth something way more than perhaps what I recommend. Yes. That could cost them time because if the price is truly beyond market value, it's going to take some time to get the buyers in there, get the feedback from the buyers, see how the market responds to that listing, and then adjust if you have to to get to the right buyers in the right price range who agree on the value of that house. So again, if that's your strategy, that it's it's worth it to me to take a little more time to see if maybe someone would agree with me that my house is worth way above what the market seems to be bearing right now. Yeah, it's it's a strategy. If that's your strategy, I'm here. Yeah.

SPEAKER_01 13:21

And we have to really assess it with the seller very carefully because it can not only cost them time, it can cost them money in the process. Because if that gap between what they want and what's even remotely realistic is too wide, then things shift in the marketplace and it can have a big impact on what the ultimate sales price is.

SPEAKER_00 13:42

Yeah. I have a realtor friend who refers to it as when you've priced your house too high, you're just helping all the people who are priced right get sold. Right. Because compared to yours, theirs looks like a bargain. Exactly. So you there's so many factors to consider when you're pricing your home. And we lay it all out there, and again, we control the process. For sure. You control the decisions. You have to be careful how you do it. Yeah.

SPEAKER_02 14:13

That's um interesting because I I didn't realize like with even something as not not as simple as, but with something such as pricing and how that will affect, you know, if you're going too high and how long it's gonna stretch that out for. So that's definitely something for people to take consider when selling. And I know that it's not an overnight process, and I do ask a lot of these things with timelines, just out of genuine curiosity, because I think sometimes maybe people think that they're going into it like, oh, my house will sell, you know, tomorrow. I know someone who's house sold in two weeks, so that's gonna happen to me. And that's not the case for most people. So sometimes I just like to ask to clarify, you know, because it's just different for everybody. But yeah.

SPEAKER_00 14:52

Um we certainly have the data where we can show them.

unknown 14:56

Good.

SPEAKER_00 14:57

Most houses in your neighborhood are selling within X number of days. Gotcha. So we're able to bring a lot to the table to help them and establish what they may expect. Yeah. But a lot of it then will roll out based on decisions you make as a seller.

SPEAKER_01 15:17

For sure. Sometimes you'll even see a house that's a standout where everything else is sold within a month's time, and this one house is still on the market. And if it's still on the market, let's go see it. Yeah. You know, let's go see it. You tell me, Mr. Seller, what's different between your house and this house that's going to make yours sell in a more timely fashion. Yeah. Because sometimes we like them to just have the reality check of that. And sometimes we're curious that we want to go back and either preview that property or take them to see it. But sometimes it really helps to get their input on it. Yeah. You know, because the first response is likely to be, oh no, my house is much better than that house. Really, show me why. Yeah.

SPEAKER_02 15:56

You know, play it all out for me. Yeah. Well, then I I also ask about timelines because I sometimes we were thinking about, you know, this episode and what we're going to talk about. Um, in regards to a seller who is moving to a new spot or, you know, just trying to get out of the house in general, um, when selling, does the seller need to wait for their home to be sold before they can move out and move on? Um, what if I, you know, was living somewhere and I needed to sell my current house before I'm trying to buy elsewhere? How does that work? Is it necessary to have your home sold before you pack up and leave?

SPEAKER_01 16:31

Again, it depends really strongly on the seller's individual circumstances and what's practical and what's financially feasible for them. And so that overlap or that connectivity to, you know, getting the sale closed, um, it's it's a necessary sequence that uh that has to be clear to us in terms of what their needs and their intent is. You know, needs are and their intent is. So um we actually need to explain what that trajectory is going to be in individual steps so that they can see what the endpoint's going to be, but everything they have to do in between. And is it practical primarily financially? Is it practical for them to do one before the other? Yeah. Yeah. Can you qualify for two mortgages potentially? That's it.

SPEAKER_00 17:20

And do you have the intestinal fortitude to own two houses for a a period of time? So the risk management of making sure that you can, even if you can qualify to go ahead and buy in your new location, what is the risk to this house being on the market for a period of time? And every single market is different. But again, we can bring the data and pretty reasonably share this is what you will likely experience. We should be able to have it done by X time. But what is the tolerance for the seller to hold on to that for longer before it has a huge impact on them financially? So there's a lot that goes into that.

SPEAKER_01 18:05

And are they planning on a certain price point that the existing house will sell at? And then it's going to enable them to move on to that either move up house or a house at a different price point. Yeah. And uh what kind of an impact will that have on their choices?

SPEAKER_00 18:20

Yeah. So there are other strategies we can employ to help alleviate the risk and get the seller out in a timely manner. Yeah. Knowing what they're getting for their house, what they have to put on next house. There's a lot we can do.

SPEAKER_01 18:40

And anybody who's buying should be speaking with a lender or with multiple lenders and getting opinions of value, you know, about the house that they're dealing with now and what their affordability will be for the next purchase.

SPEAKER_02 18:51

Absolutely. And it always comes full circle back to what we were saying earlier, but that's just again one of the big things about having realtors. Unless you're a market data expert on your own, you're not going to know any of these things going into it. So to have somebody who can give you a realistic picture of, hey, this is crazy or this might be okay, it's kind of good to have in your mind.

SPEAKER_01 19:10

And to that point, Jenna, we have much better access than the average consumer has in terms of getting that information quickly and effectively and currently. Yeah. You know, so that we have that data that that is readily available to us even in formats where we can get that comparative analysis all bundled up for them so that they can see what the if-then process of that is going to be. Yeah.

SPEAKER_02 19:33

That's a DIY that I can never do. Right. I'll just say that right now. Or would not want to do that. It doesn't even sound exciting for me. So yeah. Right. It's not not something I want to do this weekend. Um, so in a perfect world after everything is said and done, um, what happens for the seller when an offer is submitted? How would you know whether or not to take that offer? What if you get multiple offers? How does that process work?

SPEAKER_01 19:58

Well, we evaluate, if it's multiple offers, we really encourage them to evaluate them all. We help them with a spreadsheet for sure.

SPEAKER_02 20:05

Nice, okay.

SPEAKER_01 20:06

Because it's so much information to digest that we try to do a spreadsheet that's very comprehensive and that talks about all of the valuable things that are coming in from each of the offers and what some of the downsides might be. Sure. What makes one preferable to another? So again, we go back to that fulcrum of time and money. You know, is there one that requires extended occupancy for the seller? Um, if is there another one that moves very quickly, but is it a lesser price point? And and we factor all of that together, and again, getting their feedback is absolutely imperative. But we try to keep that burden of confusion off their back if we can, because having so much information coming at you, and somebody that you met on the walkway to the house that you really liked compared to somebody that you didn't have any opinion about, you know, it's still an emotional process for sellers. And so is there, you know, is there some preferred buyer that they have a reason to like without objectivity? You know, that all of it can play into what they're what they're thinking and feeling. It's a very emotional and factual process. So we really try to help them declutter that.

SPEAKER_00 21:23

Emotionally, you will make a decision that is not always financially best for you. For sure. Which is just one of the reasons. Dare I say, the stupid buyer love letters are not beneficial to the sellers. Exactly. I have seen sellers make financial decisions that aren't right based on seeing a love letter. And in some states, you're not even allowed those. They're outlawed. You cannot have those love letters. It is a love letter now. I'm inquiring. I'm the buyer and I'm writing. About how oh my I want to raise exactly here and right all these things. That is a very risky venture, speaking of risk for the seller, when they are accepting those letters and reading those letters and using those letters to determine help determine which offer to take, it actually puts them potentially in a risky situation because of fair housing. Because people tend to talk about themselves as people rather than talking about the house. So if I have a seller, I'm telling them, do not accept those letters. They're a risk to you. Or let me ferret out the letter and make sure that it doesn't tramp all over fair housing before I present it to you. Gotcha. So you have to, there's so many facets of risk for a seller that we have to take into account.

SPEAKER_01 22:57

Absolutely. We really try to keep love letters out of the equation because it complicates everything.

SPEAKER_02 23:03

Yeah.

SPEAKER_01 23:03

And it does put the seller at risk if they're making decisions that are based on things like familial status, where somebody's describing that they can't wait to have their children playing on the swing set that's in the back. You know, it establishes that there are children. We don't need to have that be a factor that influences anybody to take a transaction all the way to the closing line or not. Gotcha.

SPEAKER_00 23:27

That's what's beautiful about having those spreadsheets. Because it is, it's down to numbers and facts and objectives. That's it. And we help them decide which is the better way to go. And once you have those terms laid out for a seller in such a manner, you can see maybe one that's really sticking out more than the others. But you know what? I really like this term that this offer provided. Well, if you like everything else about this offer, why don't we go back to this offer and ask them to also include that term? Yeah. Or some term similar to that. So the spreadsheets, keeping it objective, and figuring out which is the most likely offer that we can actually see through to the end with the best terms and price. That's what we're trying to do.

SPEAKER_02 24:28

Yeah. I could see how that could become a very emotional part of the process. And I think you know, looking at it, looking at it from practicality is definitely the way to go. So yeah, the love letters are a very good point because I would not have thought about that, but wow, yeah, that that complicates things for sure. So takeaway, look at the data on that one. Um and then just wrapping up from today, when everything is said and done, for the sellers, what are their expectations financially during the close? Um, what should they expect to take care of or cover, if anything, when this whole process is said and done?

SPEAKER_01 25:05

The sellers need to be talking with their financial advisors because it's very important that they understand what their global financial position is. Sure. Because they are going to come to the closing table and have an obligation to pay whatever is outstanding on the house. That has to be able to be something that either the cost of the purchase for the new buyer is going to cover, or that they're going to have the wherewithal financially to bring to the table from whatever other resources they have. And there is nothing that's more disappointing than getting all the way to that closing table without a seller being able to close. And everybody's had those experiences where they forgot about some outstanding financial obligation that you know just got automatically deducted from a paycheck, and they didn't realize that there was a big fat balloon hanging on the end of that that had a balance that still needs to be paid to the person who loaned them that money or whatever it is. Uh, and that can be both very disappointing and catastrophic to a house closing.

SPEAKER_00 26:10

In general, we know and we can provide an estimate of the expenses and what the seller may net if they take each of the offers, and that's helpful. But what Jackie is talking about is something beyond the scope of what we would know.

SPEAKER_01 26:29

We would have no access to that information. Right. Absolutely. You know, so it it falls into the hands of the title company. And what's really important is having a relationship with the person who's handling the escrow and what the title company does. So it's always this kind of three-way agreement between the lender, the realtor, the title company to make sure that people can get over that finish line. Absolutely. We have had it we've seen discrepancies into five figures where people didn't realize that there was some outstanding item that had to be taken care of and that the proceeds of sale weren't going to cover it. You know, so it can be disappointing all the way around at the last possible moment.

SPEAKER_00 27:07

Thank God. Most of them are not like that. Right. Yes.

SPEAKER_01 27:11

Most of them remember the exception. For sure, for sure.

SPEAKER_00 27:15

We can tell the seller up front, here are the expenses. You should net something very close to this number that we've estimated for you. And they then can decide how they carry that money moving forward.

SPEAKER_02 27:31

Yeah, that's definitely very important to take into consideration because no one likes a sneak attack at the very last second.

SPEAKER_01 27:37

Surprises are not always good.

SPEAKER_02 27:39

Not the surprise that we enjoy, yes, for sure. Um, well, takeaways from this episode certainly are just again kind of the first emotional, you know, try to draw back from the emotions and look at the data and what you have and you know, make informed decisions. And again, with the realtor by your side, it's gonna be a far easier process than a solo track. 100%. One that I would not like to do. But um, I appreciate you both for coming in and giving all this wealth of information to our podcast listeners, and I appreciate your time. I had a blast talking to you. Thanks, Dave. Thank you.

SPEAKER_01 28:13

Likewise.

SPEAKER_02 28:14

Um and with that, if you enjoyed this episode of our Consumer Podcast, I invite you to listen to both our past and upcoming episodes as we release them. We also have nine whole seasons of our regular Home for All podcast available to stream as well as some fast lane learning episodes. You can stream us on most platforms, but be sure to follow us on social media to stay updated with what's going on. There's always a wealth of information around here, which is why I'm excited to see our consumer series continue to grow. That's all for now, and we'll catch you next time.