Sellers Risk Mitigation Plan for
Selling a Home in Sonoma County

It’s a Big-Picture Plan

Before you put your Santa Rosa or Windsor home on the market, you should take the time required to develop a "Risk Mitigation Plan". This is a concept that I developed for my Seller clients to help them avoid potential problems. A Risk Mitigation Plan is simply the recognition that there will be some risks involved in the sale of your property, and that with forethought many of these risks can be minimized or eliminated by creating a "plan" on how you will deal with each of these issues. The risks involved in selling a home include potential safety hazards in and around the home, protection against loss of valuables, family pets, security, and of course, the inherent unknowns about market timing. The following information is a list of some of the more common problems. While reading this list other issues may come to mind and you should include them in your personal "Risk Mitigation Plan".

Talk to Your Realtor© About Managing Your Security System.

There are many ways to work around this. For example you can leave the system turned off during the day when potential showings could happen, or you can have a special code that is posted in the Multiple Listing Service (MLS) under the “confidential remarks” to be used only by real estate agents. Some systems will even allow this code to be active only during certain times of the day. Some of the newer Realtor© lock boxes in Santa Rosa Ca, or Windsor have the ability to contain yet another “call before showing” security code that is provided to the Buyer’s agent VIA a phone call to your agent and must be entered in addition to the other security measures.

Do You Have any Restrictions on Showing Your Santa Rosa or Windsor Home?

Discuss with your Realtor© any showing restrictions that you need to have on your home. This could include certain hours of the day or days of the week when you do not want the home to be shown. This information must be communicated to all real estate agents who could potentially show your home. This can be done through the Multiple Listing Service (MLS) and also some of the newer Realtor© lock boxes in used in the Santa Rosa area allow for restricted access during certain times of the day, and can be very helpful at managing this aspect. It is also a good idea to alert your neighbors about any showing restrictions or furniture moving activities you have decided upon.

Word of Caution: Be careful not to create unnecessary obstacles for your home to be shown. I have been on many home tours with Buyers where we were not able to go through one or more houses because the house had showing restrictions. So what did we do? We toured the ones we could go through and picked from these to make an offer. We often never went back to the home with showing restrictions because there were so many houses that did not have any. If you absolutely need restrictions, use them, otherwise don’t.

Pets Include; Dogs, Cats, Birds, Polar Bears, Goats, Fish, Monkeys. Maybe a Realtor©

Do you have a dog or cat? Perhaps you have a polar bear for a pet? Could this pet be a danger to buyers and agents who the pet doesn’t know? Could the pet escape during a home showing and potentially become hurt or lost? How will you handle the pet during these un-planned showings? Your Realtor© can help you devise a plan to deal with pets during the marketing period. Perhaps you have a neighbor that you can leave your pet with during the day while you are absent. Perhaps you have a relative in the area who can keep the pet during the entire marketing period. Sometimes creating a comfortable environment for the pet inside the garage, with instructions to Realtors© about not opening the garage will work. If your pet could potentially bite a stranger, this garage area should be locked with a key separate from the rest of the house to guarantee safety.

Emergency Back-up Keys Can be Very Helpful

Make several extra copies of keys to your home and keep them in a secure location. If possible identify a "best neighbor" who could provide emergency access to the home, should someone accidentally lock their keys inside. I have had sellers who "Re-keyed” the front door to their home with a new key that is unique to that door only. This is the only key which is then used for access to the home during showings. If this particular key is ever “lost”, then only one lock would need to be rekeyed to guarantee the security of the home.

Will Your Home be Empty During the Marketing Period?

If you plan to take any vacations during the marketing period of your home, be sure that your real estate agent is aware of this timeframe, and so are your closest neighbors. Remember that before you leave on vacation you must do a thorough "security sweep" of the property before you leave. Check all doors and windows to be sure they are securely locked. It is also a good idea to stop delivery of your newspaper too. During this sweep, be sure to remove any valuables, medications and firearms from the house.

Get a Home Inspection BEFORE You List Your Home.

In today's market, a home inspection will be performed by the vast majority of buyers before they release their inspection contingency. Don’t fool yourself, there will be problems. There is ALWAYS something wrong with every home that the Seller either did not notice, or had forgotten about. If you wait until the buyer performs their inspection to learn about the problems you have with your home, your options for repairs are extremely limited. This is because you will have severe time constraints and the buyer's opinion of a “proper repair” to deal with. Neither of these exists if you get the inspection before you go to market.

Doing your own pre-market inspection gives you the opportunity to do repairs on your own timeframe and makes the Buyer’s inspection a non-event. It is also one of the best ways to improve your chance of closing escrow on the home. I have seen quite a few homes drop out of escrow because the buyer freaked-out over the way a repair was done by the Seller. The Seller could have completed this before they went to market, and there would have been no problem. A dropped escrow is WAY more expensive than the cost of an inspection.

What About Parking or Other Neighborhood “Restrictions”?

Are there any parking restrictions within your neighborhood that could impact people viewing the home? If so, how are these enforced? Be sure to communicate this to prospective buyers and agents to avoid loosing a buyer because of a ticket or complaint. This communication can take place through the Multiple Listing Service (MLS) or from your Realtor© directly.

Send RAMBO to the Time-Out Corner.

No weapons of any kind should be left in your house for the entire time you are in the market. If you find this impossible to consider, the weapons MUST be in a locked safe at all times you are not in the home. I have actually had Buyers see a firearm in a home and decide to leave the home immediately. Some people are very uncomfortable around firearms and this is a great way to loose a potential buyer.

Safety Issues While Selling Your Home in Santa Rosa or Windsor

Make your house safe for visitors. During the time that your home is on the market, you will have strangers entering your home and walking through it. There is no other way to sell a home. During this time, you do not want someone to become injured as a result of a hazardous condition in your home. These may seem “mild” such as a loose rug or uneven floorboard. Do a “fresh look” analysis of your home; are there any hazardous or unsafe areas in or around the home? How will we deal with these? All too often, after having lived in a home for several years most people become "blind" to certain problems, or hazards within the home. We are accustomed to simply avoiding that hazard. This does not work with strangers entering your home for the first time. Be sure to check handrails throughout the home to ensure that they are secure, any broken glass must be replaced, loose floorboards or exposed nails and screws must be remedied, unsafe structures such as a shed or old wooden deck must be repaired, removed, or access to these hazards must be eliminated. One of the best ways to attract a lawsuit is to have someone injured in your home as a result of a condition you should have known about and could have prevented.

Security During Open House Tours

Not everyone is honest ! While 99% of the people that attend open houses are honest and legitimate potential buyers, there is always the possibility that someone may have a dishonest motive. The use of a Realtor© is perhaps the best "first defense" for this issue. Realtors© prequalify their buyer-clients to confirm their sincerity, and always accompany their clients into every room of the home during a buyer showing. During the weekend open house tours, your own experienced listing agent is always alert to potential problems and will accompany any prospective buyers or neighbors through the home. Regardless of whether you have an agent or not, it is imperative that you do a “security check” before each open house. This includes removing all small valuables from throughout the home, remove prescription medications from your medicine cabinet, do not leave spare keys laying around, and remove any personal information from public view. If you have a locking desk in your home office you should lock it, as well as any filing cabinets.

The Sonoma County Weather Has it’s Moments

Be prepared for Bad Weather Showings. During certain time of the year In the Santa Rosa and Windsor area, we have rain. Lots of rain, and the weather doesn’t care if you have an open house planned for tomorrow or not. BUT! You can be prepared. A functional umbrella stand at the entry can be a good way to make the home seem more inviting on rainy days, also have an attractive, absorbent rug you can throw down in the entry way to contain water from people’s feet. If you have slippery areas put a throw-rug down to prevent injuries. I recommend you have a supply of little disposable booties that people can put over their shoes, or you may instruct your Realtor© to request that people remove their shoes upon entry. Having booties available in an attractive container at your entryway will also protect your carpets from normal-every-day traffic on dry days too. Perhaps your Realtor© will supply them? I have found that rainy days are some of the best days to show a home. If the home has a cozy feel, it becomes an inviting refuge to any potential buyers getting out of the rain. So, don’t cancel the open house due to bad weather, simply prepare for it.

Timing the Market

What if your home doesn’t sell quickly? One of the biggest unknowns in real estate in Sonoma County is “How fast will my home sell?” A good Realtor© can make a very educated guess which can serve as a guide, but it is only a guess and you never really know till it happens. If you have a specific time constraint such as relocation, another house closing escrow, or an IRS tax event, you should have a plan as to what you will do if your home doesn’t sell quickly. Will you rent the property and wait for a better market? Will you dramatically lower the price? Will you offer to provide buyer financing? If you are attempting a For Sale By Owner, how long will you try it on your own before you call a Realtor©? Thinking of the possible alternatives BEFORE you get to the last minute will allow you many, many more options than if you wait.

What if it sells FAST!! Then again, what if your house sells FASTER than you expected? Do you have a back-up plan as to where you can stay while you are waiting for your next house or apartment to be ready? I have actually seen sellers get an offer faster than they ever thought possible only to have to reject the offer because they could not decide quickly enough; where would they go and how would they move their belongings? In a Buyers Market, this is the last thing you want to happen. Thinking about these possible events at the beginning and making a plan when you are calm and have time on your side, will allow you more solutions with better outcomes and it will make selling your home go much smoother.

Insurance and Records on Your Home

One of the first stops is your insurance agent. Let them know you are putting your house on the market and ask them to do a current value analysis. This is to confirm that you have your property insured for the proper amount. It may have been a while since you last thought to check your replacement value and it probably has gone up. Also ask about your liability limits and if you should consider an umbrella policy. Remember be sure and maintain your insurance in force all the way THROUGH close of escrow. Perhaps part of your Risk Mitigation Plan includes the possibility of renting the property if it doesn’t sell within your timeframe. If so, ask what the insurance consequences for this are so you can include this in your cost to rent. If you are considering having the home empty for a while, be sure that your current policy covers a vacant home. Insurance companies hate empty houses.

Seller Disclosures in Sonoma County are an Important Risk Measure

The biggest and best kind of insurance is proper Seller Disclosures. Make sure you understand the Federal, State and Locally mandated disclosures, and that you complete them, keeping records of your disclosure. Talk to your Realtor© about any concerns you have regarding the property or its history and if you should disclose a particular condition. Improper or inadequate Seller Disclosures is one of the leading reasons for a buyer-initiated lawsuit in a real estate transaction.

Take Photos of Your Home and Keep Copies.

Be sure to keep a copy of every report, document or escrow statement for a minimum of five years after the sale of your home. If you are selling any portion of the property in “as is” condition, take photos of the condition you left it in as you leave the property. Also, be sure to take photos of any item mentioned in the inspection reports as well as any repairs you made to the property. It is really a huge disappointment to have a buyer come back to you, legally or otherwise, after the sale closes escrow. It is much worse to have this happen and not have any records to support your position. If you used a Realtor© for the sale of your home, they usually carry Errors and Omissions Insurance which will add another layer of protection between you and an unhappy buyer. If the Buyer also used a Realtor©, there is yet another layer of protection.

Use a Realtor© to Sell Your Home

I have mentioned parts of this in some of the above paragraphs, but it is worth mentioning again. One of the best risk mitigation actions you can do is to use a Realtor© while selling your home. A good Realtor© will help you through ALL of the above risk mitigations actions as well as help to identify and solve others. A good Realtor© will help you with Seller Disclosures, meeting your contractual deadlines, and providing advice through every step of the way.

Buy a Home Warranty

Home Warranties protect more than the appliances. I always recommend that a seller in the Santa Rosa / Windsor area include a home warranty in the sale of their home, regardless if a buyer asks for one or not. You never know “how small is the straw that breaks the camel’s back”, and a home warranty is a very affordable way to add another layer of insulation between yourself and an unhappy buyer. I recommend that the seller purchase the warranty, but they should NOT include this in their listing. A warranty should be reserved for possible use as a negotiation tool. People do NOT decide if they want to make an offer on a home just because the warranty is included (or not). A buyer may “ask” for it in the offer to buy, and in this case here is a concession you are ready and willing to make. Even if they don’t ask for it, you can throw it in after the buyer inspections are done as a gesture of good faith. I think you get way more mileage out of a home warranty in the negotiation phase than you ever get in the offer phase and a warranty is great seller-protection. A good agent will have several resources for affordable home warranty programs, and you can find them on the internet or in the yellow pages. For more information on other negotiation tactics, read my article; The Art Of Negotiations.

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