This is a document prepared to help people who are interested in selling their own home in order to avoid paying a hefty commission to a realtor. It is put together in the recognizable format of a frequently asked questions menu in which the question is in boldface lettering directly above the pertinent answer so the reader can easily brows the content and quickly find answers to their own inquiries. The seller can find the answers to extremely important questions like how to determine an asking price for their home and they can find the answer to more mundane inquiries such as ideally how long it should take to sell. The text also gives definitions for industry terms and acronyms such as “curb appeal” and “MLS®”. There is a section devoted to creating a good first impression to potential buyers that goes over many seemingly trivial steps that a seller can take to better their chances of impressing prospects that may not be immediately obvious to a person who is not experienced in the sale of realty. This form also touches on reasons why it might be helpful to have realtors be part of the equation.
BEATRICE LEONARD & ASSOCIATES SELLERS – FAQ Can I sell my house myself? Many people believe they can save a considerable amount of money by selling on their own. They look at the average commission on a house, and remember stories of friends or relatives who managed to get through the process with seemingly little trouble. "People sell their own homes," they say - "so why can't I?" Right now, over 10% of American homeowners handle their own sales. But in order to join the ranks of the successful ones, you need to realistically assess exactly what's is involved. The routine parts of the job involve pricing your house accurately, determining whether or not a buyer is qualified, creating and paying for your own advertising, familiarizing yourself with enough basic real estate regulations to understand (and possibly even prepare) a real estate contract, and coordinating the details of a closing. The greatest downsides are the fact your house is only on the market when you're home, and the possibility that a mistake may cost you the money you're trying to save. The best reason for working with real estate broker is the enormous amount of information they have at their disposal – information that can help make your house sell faster and easier and are trained in areas like screening potential buyers and negotiating with them. Finally, they're always "on-call," and willing to do the things most of us hate: working on the weekends, answering the phone at all hours, and always being polite about it. What makes a house sell? A successful sale requires that you concentrate on five considerations: your price, terms, condition, location, and exposure. Since you can't control all of them, you may have to overcompensate in one or more areas to offset a competitive disadvantage in another. When is the best time to list a house for sale? As soon as you decide to sell it. If you want to get the best price for your house, the key is to give yourself as much time as possible to sell it. More time means more potential buyers will probably see the house. This should result in more offers; it also gives you time to consider more options if the market is slow or initial interest is low. Is there any seasonality to the market? Peak selling seasons vary in different areas of the country, and weather has a lot to do with it. For example, late spring and early fall are the prime listing seasons in many areas because houses tend to "show" better in those months than they do in the heat of summer or the cold of winter. And of course, people like to do their house shopping when the weather is pleasant. But keep in mind that there are also more houses on the market during the prime seasons, so you'll have more competition. So while there is seasonality in the real estate market, it's not something that should dominate your decision on when to sell. What about market conditions -- price trends, interest rates, and the economy in general? Should they have any bearing on when I list? Probably not. Even if you're under no pressure to sell, waiting for better market conditions is not likely to increase your profit potential. How long should it take to sell? Average listing times vary from 30 to 180 days, according to market conditions in a particular region, town, or even neighborhood; and of course, price, terms, condition, location and exposure play an even greater role. Selling in any market is easier if you keep time on your side. Most professionals will tell you that allowing yourself at least six months will put you in a position to get a better return from their marketing efforts. How do I price my house? Today's residential real estate market is no place to look for easy profit. That's not to say you can't get what your house is worth. You just have to be realistic about its value, and price it accordingly. A good place to start is by determining the fair market value. What is "fair market value," and how do I determine mine? The fair market value of a house is the highest price an informed buyer will pay, assuming there is no unusual pressure to complete the purchase. It is usually not the asking price. An analysis will give you a realistic figure based on the most salient points of the local real estate market. It should provide information about recent sales of similar houses, including how much they sold for and how long it took. The broker's price opinion is very helpful in determining the right asking price. What's the difference between fair market value and asking price? Generally speaking, the owner's asking price -- the advertised price of a house when it goes on the market -- is set slightly higher than fair market value. You can assume that some negotiation will be necessary to reach an agreement with a buyer. In most cases, the agent who presents you with the results of your CMA will be willing to help you establish a competitive pricing strategy. Who can help me determine the right asking price? Real estate sales agents suggest asking prices based on a wide array of information you may not have at your disposal, including recent listing and selling prices of houses in your neighborhood. If you're not completely confident in their suggestions, you may want to order an appraisal. How flexible should I be about the asking price? Most buyers also leave room for negotiation when they make an offer. Thus, a certain degree of flexibility is usually called for on the part of both the buyer and seller. While it is ultimately your decision to accept or reject an offer, or present a counter-proposal, a good agent can be of great assistance to you during the negotiating process. In fact, negotiation is one of the valuable skills an agent can offer you. As negotiations proceed -- whether in writing, face-to-face, or by phone -- your agent should inform you of your options in responding to each offer from the buyer. Should I fix my house up before it goes on the market? Unless your house is nearly new, chances are you'll want to do some work to get it ready to market. The type and amount of work depends largely on the price you're asking, the time you have to sell, and of course, the present condition of the house. If you're in a hurry to sell, do the "little things" that make your house look better from the outside and show better inside. What is "curb appeal," and how do I create it? Curb-Appeal" is the common real estate term for everything prospective buyers can see from the street that might make them want to turn in and take a look. Improving curb appeal is critical to generating traffic. While it does take time, it needn't be difficult or expensive, provided you keep two key words in mind: neat and neutral. Neatness sells. New paint, an immaculate lawn, picture-perfect shrubbery, a newly sealed driveway, potted plants at the front door -- put them all together, and drive-by shoppers will probably want to see the rest of the house. Hand in hand with neatness is neutrality. If you're going to repaint, stick to light, neutral colors. Keep the yard free of gardening tools and the kids' toys. Remember, when a family looks at a house, they're trying to paint a picture of what it would be like as their home. What should I do to make the house show better? As a homeowner, you can play an important part in the timely sale of your property. In taking the following steps, you’re helping your Sales Associate sell your home faster, at the best possible price. If your busy schedule does not allow your detailed attention, if possible. The easiest and most reliable way to improve the appeal of your home is to enlist a quality home service professional. The right professional can help you get everything in order - from repainting the kitchen to providing a thorough cleaning - so you can stay focused on more important things. Make the Most of that First Impression A well-manicured lawn, neatly trimmed shrubs and a clutter-free porch welcome prospects. So does a freshly painted or at least freshly scrubbed front door. If its autumn, rake the leaves. If its winter, shovel the walkways. The fewer obstacles between prospects and the true appeal of your home, the better. Here is your chance to clean up in real estate. Clean up the living room, the bathroom, the kitchen. If your woodwork is scuffed or the paint is fading, consider some minor redecoration. Fresh wallpaper adds charm and value to your property. Check Faucets and Bulbs Dripping water rattles the nerves, discolors sinks, and suggests faulty or worn-out plumbing. Burned out bulbs or faulty wiring leave prospects in the dark. Dont let little problems detract from what’s right with your home. Don’t Shut Out a Sale If cabinets or closet doors stick in your home, you can be sure they will also stick in a prospect’s mind. Dont try to explain away sticky situations when you can easily plane them away. A little effort on your part can smooth the way toward a closing. Think Safety Homeowners learn to live with all kinds of self-set booby traps: roller skates on the stairs, festooned extension cords, slippery throw rugs and low hanging overhead lights. Make your residence as non-perilous as possible for uninitiated visitors. Make Room for Space Remember, potential buyers are looking for more than just comfortable living space. They’re looking for storage space, too. Make sure your attic and basement are clean and free of unnecessary items. Consider Your Closets The better organized a closet, the larger it appears. Now is the time to box up those unwanted clothes and donate them to charity. Make Your Bathroom Sparkle Bathrooms sell homes, so let them shine. Check and repair damaged or unsightly caulking in the tubs and showers. For added allure, display your best towels, mats, and shower curtains. Create Dream Bedrooms Wake up prospects to the cozy comforts of your bedrooms. For a spacious look, get rid of excess furniture. Colorful bedspreads and fresh curtains are a must. Open up in the Daytime Let the sun shine in! Pull back your curtains and drapes so prospects can see how bright and cheery your home is. Lighten up at Night Turn on the excitement by turning on all your lights - both inside and outside - when showing your home in the evening. Lights add color and warmth, and make prospects feel welcome. Avoid Crowd Scenes Potential buyers often feel like intruders when they enter a home filled with people. Rather than giving your house the attention it deserves, they're likely to hurry through. Keep the company present to a minimum. Watch Your Pets Dogs and cats are great companions, but not when you're showing your home. Pets have a talent for getting underfoot. So do everybody a favor: Keep Meow and Rover outside, or at least out of the way. Think Volume Rock-and-roll will never die. But it might kill a real estate transaction. When it's time to show your home, it's time to turn down the stereo or TV. Relax Be friendly, but don't try to force conversation. Prospects want to view your home with a minimum of distraction. Don't Apologize No matter how humble your abode, never apologize for its shortcomings. If a prospect volunteers a derogatory comment about your home's appearance, let your experienced agent handle the situation. Keep a Low Profile Nobody knows your home as well as you do. But your experience agent know buyers - what they need and what they want. Your agent will have an easier time articulating the virtues of your home if you stay in the background. Don't Turn Your Home into a Second-Hand Store When prospects come to view your home, don't distract them with offers to sell those furnishings you no longer need. You may lose the biggest sale of all. Defer to Experience When prospects want to talk price, terms, or other real estate matters, let them speak to an expert - your agent. HOW YOU CAN ASSIST YOUR AGENT Your agent will have an easier time selling your home if showings are scheduled through his or her office. You'll appreciate the results. Should I make any major home improvements? Certain home improvements that are useful to almost everyone have been proven to add value and/or speed the sale of houses. These include adding central air conditioning to the heating system, building a deck or patio, basement finishing, some kitchen remodeling (updating colors on cabinets, countertops, appliances, panels, etc.), and new floor and/or wall coverings, especially in bathrooms. Improvements that return less than what they cost are generally items that appeal to personal tastes, like adding fireplaces, wet bars, and swimming pools, or converting the garage into an extra room. The challenge that comes with any home improvement designed to help sell your house is recouping your investment. There's always the risk of over-improving your house that is, putting more money into it than neighborhood prices will support. So how much is too much? Professional renovators have found that, no matter how much you improve any given house, you're unlikely to sell it for more than 15% above the median price of other houses in the neighborhood, whether you do $1,000 worth of work or $50,000. That's why you might want to ask your agent's opinion about the viability of recouping the cost of any major renovation you have in mind before you start the work. Am I liable for repairs after I sell? In certain situations. If the buyer's Inspection reveals major problems with your house's structure or mechanical systems (heating, electrical, plumbing, etc.), the buyer may wish to negotiate the price downward on the basis of anticipated repair costs. So even though the repairs won't be made until after the sale, practically speaking, you'll be paying for them. Sometimes, repairs may be required before the transfer of Title takes place. This is especially true in sales that involve financing that's insured or guaranteed by the government (FHA/VA loans, for example). You may have also heard about lawsuits involving sellers who failed to disclose major problems before the sale -- like an addition to the house that wasn't built to code. Most states now maintain very specific disclosure laws that require sellers to disclose any pertinent information relative to the condition of the property. For example, most states require sellers to notify buyers about the presence of any lead-based paint. It is important for you to be knowledgeable about your state's disclosure laws. These are just a few good reasons to retain a lawyer or Agent who knows as much about the condition of your property as you do. It's also a good idea to get the buyer's written acknowledgment of any major problems when you accept their offer. What about home warranties? Are they available to sellers as well as buyers? Yes they are, and they're worth investigating. After a buyer has invested substantial cash savings in a down payment and moving expenses, the last thing they want to worry about is a costly home repair. With the Home Protection Plan , they don't have to. warranty can offer protection for you and your buyer, covering repair or replacement costs for breakdowns to most major systems and built-in appliances up to a year or more after the date of closing. In many states, there is no additional cost for coverage to sellers who provide coverage for their buyers except for a small deductible if you make a claim. And when you consider the returns -- a quicker sale and a better chance of selling. What's an MLS®, and why do I need one? A Multiple Listing Service, or MLS, is one innovation that makes it easier to reach a large number of prospective buyers and dramatically increase the exposure of a property. Quite simply, it's a system under which participating Brokers agree to share commission on the sale of houses listed by any one of them. So, for example, if you list your house with one broker and another broker actually sells it, they share the commission. The advantage to you is clear; more people have an interest in selling your house. How important is advertising? Advertising remains one of the most important components of the marketing process. But again, it's not as simple as it used to be, at least not in the hands of a good broker. Many people don't realize how costly advertising can be -- a single page of photo listing ads run by a local real estate office in your local newspaper can cost anywhere from several hundred to several thousand dollars. Yet it's a far more cost-effective way to go than the three or four-line classified ad you would probably run you were selling the house yourself. What should we expect from an open house? As another valuable part of the marketing process, the open house offers prospective buyers the chance to view houses in a low-pressure, "browsing" atmosphere. With that in mind, you shouldn't expect it to generate a sale, at least not directly. What you should look for is traffic, and calls to your agent for private showings in the days following the open house. Should we try to avoid being at home when the house is shown? You should definitely plan to be out of the house during any open house your agent has scheduled; the same goes for first showings to prospective buyers. People often feel uncomfortable speaking candidly and asking questions in front of current owners. You want them to feel as free as possible to picture your house as their "dream home." Who actually sells my house -- a broker or an agent? Both. In legal terms, a real estate agent is an individual trained and licensed to act for other people looking to buy or sell a piece of property. While that definition applies to both broker is permitted to collect fees and/or commission for such work. Thus, the sale agent -- with whom you have most of your day-to-day contact -- works on behalf of, and is compensated by, the broker. Will my agent be present at the closing? If you wish. While their presence is not required by law, both the buying Agent and the selling agent may attend the closing. Even though most of the procedures are handled by the lenders, title companies and in some cases an attorney, you'll find your agent to be a valuable source of information and counsel, especially if any last-minute problems arise. Good agents are also extremely helpful in the days immediately prior to the closing. They'll help you prepare by giving you a step-by-step preview of the entire process and what will be expected of you. And they'll make certain you bring all necessary documents and other information. How do I find the agent that's right for me? A good place to start is by talking to friends, neighbors, relatives -- anyone whose recommendation you trust. Another way to find an agent well-suited to sell your house specifically is by responding to local advertising from agents -- such as those "just sold" mailings you find in your mailbox from time to time. The very existence of such self-marketing efforts suggests that they may have more to offer you than the agent who picks up the phone when you call the local real estate office. Do I have to pay a commission even if I find the buyer? That depends of the type of listing you agree to. If you sign an exclusive agency contract, you may still sell the house on your own without paying a commission. In an exclusive right-to-sell agreement, you owe a commission even if you find the buyer. What if my agent doesn't produce? Besides commission, the most important matter you negotiate at the time of listing your house with a broker is the duration of the Listing contract. Terms vary, but listing agreements are seldom for less than three months or greater than one year. So what if you find yourself dissatisfied midway through a nine-month contract? While the listing contract is legally binding, some brokers offer homeowners an "out" if they are unhappy with the services they are receiving.
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