Disconnect Your Emotions
When conversing with real estate agents, you will often find that when they talk to you about buying real estate, they will refer to your purchase as a "home." Yet if you are selling property, they will often refer to it as a "house." There is a reason for this. Buying real estate is often an emotional decision, but when selling real estate you need to remove emotion from the equation.
You need to think of your house as a marketable commodity. Property. Real estate. Your goal is to get others to see it as their potential home, not yours. If you do not consciously make this decision, you can inadvertently create a situation where it takes longer to sell your property.
The first step in getting your home ready to sell is to "de-personalize" it.
Make Your Home "Anonymous"
If there is a new home sales tract near your home, go visit. It doesn't matter what size the homes are. What you will find are some wonderfully (but sparsely) furnished homes that anyone could live in -- with the emphasis on "anyone." They are anonymous. There may be a baseball glove in the boy's room, but no family photos on the walls.
There may be "personality" - but no person.
The reason you want to make your home "anonymous" is because you want buyers to view it as their potential home. When a potential homebuyer sees your family photos hanging on the wall, it puts your own brand on the home and momentarily shatters their illusions about living in the house themselves.
Put away family photos, sports trophies, collectible items, knick-knacks, and souvenirs. Put them in a box. Rent a storage area for a few months and put the box in the storage unit.
Do not just put the box in the attic, basement, garage or a closet. Part of preparing a house for sale is to remove "clutter," and that is the next step in preparing your house for sale.
Uncluttering the House
This is the hardest thing for most people to do because they are emotionally attached to everything in the house. After years of living in the same home, clutter collects in such a way that may not be evident to the homeowner. However, it does affect the way buyers see the home, even if you do not realize it.
Clutter collects on shelves, counter tops, drawers, closets, garages, attics, and basements. You want as much open clear space as possible, so every extra little thing needs to be cleared away.
Take a step back and pretend you are a buyer. Let a friend help point out areas of clutter, as long as you can accept their views without getting defensive. Let your agent help you, too.
Kitchen
Clutter
The kitchen is a good
place to start removing clutter, because it is an easy place to start.
First, get everything
off the counters. Everything. Even the toaster. Put the toaster in a
cabinet and take it out when you use it. Find a place where you can
store everything in cabinets and drawers. Of course, you may notice
that you do not have cabinet space to put everything. Clean them out.
The dishes, pots and pans that rarely get used? Put them in a box and
put that box in storage.
You see, homebuyers
will open all your cabinets and drawers, especially in the kitchen.
They want to be sure there is enough room for their "stuff."
If your kitchen cabinets, pantries, and drawers look jammed full, it
sends a negative message to the buyer and does not promote an image of
plentiful storage space. The best way to do that is to have as much
"empty space" as possible.
For that reason, if you
have a "junk drawer," get rid of the junk. If you have a
rarely used crock pot, put it in storage. Do this with every cabinet
and drawer. Create open space.
If you have a large
amount of foodstuffs crammed into the shelves or pantry, begin using
them – especially canned goods. Canned goods are heavy and you
don’t want to be lugging them to a new house, anyway – or paying a
mover to do so. Let what you have on the shelves determine your menus
and use up as much as you can.
Beneath the sink is
very critical, too. Make sure the area beneath the sink is as empty as
possible, removing all extra cleaning supplies. You should scrub the
area down as well, and determine if there are any tell-tale signs of
water leaks that may cause a homebuyer to hesitate in buying your
home.
The Rest of the House...
Closet Clutter
Closets are great for accumulating clutter, though you may not think of it as clutter. We are talking about extra clothes and shoes – things you rarely wear but cannot bear to be without. Do without these items for a couple of months by putting them in a box, because these items can make your closets look "crammed full." Sometimes there are shoeboxes full of "stuff" or other accumulated personal items, too.
Furniture Clutter
Many people have too much furniture in certain rooms – not too much for your own personal living needs – but too much to give the illusion of space that a homebuyer would like to see. You may want to tour some builders’ models to see how they place furniture in the model homes. Observe how they place furniture in the models so you get some ideas on what to remove and what to leave in your house.
Storage Area Clutter
Basements, garages, attics, and sheds accumulate not only clutter, but junk. These areas should be as empty as possible so that buyers can imagine what they would do with the space. Remove anything that is not essential and take it to the storage area.
Or have a garage sale.
Fixing Up the House Interior
Costs of Repairs
Do not do anything expensive, such as remodeling. If possible, use savings to pay for any repairs and improvements – do not go charging up credit cards or obtaining new loans. Remember that part of selling a house is also preparing to buy your next home. You do not want to do anything that will affect your credit scores or hurt your ability to qualify for your next mortgage.
Plumbing and Fixtures
When looking at a house, prospective home buyers often do not really know what to do. So they play with things. They flick light switches. They open everything with a handle. They turn on all the faucets and flush all the toilets. Having nice shiny fixtures makes an impression.
All your sink fixtures should look shiny and new. If this cannot be accomplished by cleaning, buy new ones. If you don’t buy something fancy, this can be accomplished inexpensively. Make sure all the hot and cold water knobs are easy to turn and that the faucets do not leak. If they do, replace the washers.
It sounds like hard work, but it's pretty easy -- even for the inexperienced.
Check to make sure you have good water pressure and that there are no stains on any of the porcelain. If you have a difficult stain to remove, one trick is to hire a cleaning crew to go through and clean your home on a one-time basis. They seem to be wonderful at making stains go away.
Ceilings, Walls and Painting
Check all the ceilings for water stains, whether the leak is caused by plumbing or a faulty roof. Find the leak and repair it and make sure a proper job is done. Nothing irritates a buyer more than finding out - after the fact - about plumbing or roofing leaks. They will be talking about calling a lawyer faster than your car engine starts when you turn the ignition key.
If a water stain is left after something you have already repaired, do the cosmetic work necessary to improve the desirability of your home. That means painting.
You may have to paint anyway, especially if dirt has accumulated in spots or you have an outdated color scheme. Painting makes a home look fresh and new on the inside and never fails to impress.
Painting can be your best investment when selling your home. It is not a very expensive operation and often you can do it yourself. Do not choose colors based on your own preferences, but based on what would appeal to the widest possible number of buyers. You should almost always choose an off-white color because white helps your rooms appear bright and spacious.
Carpet and Flooring
Unless your carpet appears old and worn, or it is definitely an outdated style or color, you probably should do nothing more than hire a good carpet cleaner. If you do choose to replace it, do so with something inexpensive in a fairly neutral color.
Repair or replace broken floor tiles, but do not spend a lot of money on anything. Remember, you are not fixing up the place for yourself. You want to move. Your goal is simply to have few negative impressions upon those who may want to purchase your property.
Windows and Doors
Check all of your windows to make sure they open and close easily. If not, a spray of WD40 often helps. Make sure there are no cracked or broken windowpanes. If there are, replace them before you begin showing your home.
Do the same things with the doors – make sure they open and close properly, without creaking. If they do, a shot of WD40 on the hinges usually makes the creak go away. Be sure the doorknobs turn easily, and that they are cleaned and polished to look sharp. As buyers go from room to room, someone opens each door and you want to do everything necessary to create a positive impression.
A "Sensitive" Topic - Odor Control
For those who smoke, you might want to minimize smoking indoors while trying to sell your home. Actually, it is best to move smoking outside. You could also purchase an ozone spray that helps to remove odors without creating a masking odor.
Apologies to pet owners, but pets come with odors. You may have become used to them, but they are immediately noticeable to those with more finely tuned olfactory senses.
For those with cats, be sure to empty kitty litter boxes daily and use plenty of baking soda. For dog owners, keep the dog outdoors as much as possible, even those adorable lovable little dogs. You might also try sprinkling
non-scented carpet freshener on the carpet on a periodic basis.
Fixing Up Outside the House
The Exterior of the House
Most real estate advice tells you to work on the outside of the house first, but unless there is a major project involved, it is probably best to save it for last. There are two main reasons for this. First, the first steps in preparing the interior of the house are easier. They also help develop the proper mind set required for selling - beginning to think of your "home" as a marketable commodity. Second, the exterior is the most important.
A homebuyer’s first impression is based on his or her view of the house from the real estate agent’s car. They call that first impression "curb appeal."
So take a walk across the street and take a good look at your house. Look at nearby houses, too, and see how yours compares. Then it may be time to go to work.
Landscaping
Is your landscaping at least average for the neighborhood? If it is not, buy a few bushes and plant them. Do not put in trees. Mature trees are expensive, and you will not get back your investment. Also, immature trees do not really add much to the appearance value of the home.
If you have an area for flowers, buy mature colorful flowers and plant them. They add a splash of vibrancy and color, creating a favorable first impression. Do not buy bulbs or seeds and plant them. They will not mature fast enough to create the desired effect and you certainly don’t want a patch of brown earth for homebuyers to view.
Your lawn should be evenly cut, freshly edged, well watered, and free of brown spots. If there are problems with your lawn, you should probably take care of them before working on the inside of your home. This is because certain areas may need to be re-sod, and you want to give it a chance to grow so that re-sod areas are not immediately apparent. Plus, you might want to give fertilizer enough time to be effective.
Always rake up loose leaves and grass cuttings.
Is Painting Required?
House Exterior
The big decision is whether to paint or not to paint. When you look at your house from across the street, does it look tired and faded? If so, a paint job may be in order. It is often a very good investment and really spruces up the appearance of a house, adding dollars to offers from potential homebuyers.
When choosing a color, it should not be something garish and unusual, but a color that fits well in your neighborhood. Of course, the color also depends on the style of your house, too. For some reason, different shades of yellow seem to illicit the best response in homebuyers, whether it is in the trim or the basic color of the house.
As for the roof, if you know your roof leaks, repair it. If you do not repair a leaky roof, you are going to have to disclose it and the buyer will want an entire new roof. If you know your roof leaks and you don't repair it and don't disclose it, look forward to hearing from lawyers at some point in the future.
Otherwise, wait and see what the home inspector says. Why spend money unnecessarily?
The Back Yard
The back yard should be tidy. If you have a pool or spa, keep it freshly maintained and constantly cleaned. For those that have dogs, be sure to constantly keep the area clear of "debris." If you have swing sets or anything elaborate for your kids, it probably makes more sense to remove them than to leave them in place. They take up room, and you want your back yard to appear as spacious as possible, especially in newer homes where the yards are not as large.
The Front Door & Entryway
The front door should be especially sharp, since it is the entryway into the house. Polish the door fixture so it gleams. If the door needs refinishing or repainting, make sure to get that done.
If you have a cute little plaque or shingle with your family name on it, remove it. Even if it is just on the mailbox. You can always put it up again once you move. Get a new plush door mat, too. This is something else you can take with you once you move.
Make sure the lock works easily and the key fits properly. When a homebuyer comes to visit your home, the agent uses the key from the lock box to unlock the door. If there is trouble working the lock while everyone else stands around twiddling their thumbs, this sends a negative first impression to prospective homebuyers.
Want to Start Off With a High Sales Price?
When Your Selling Price
is too High, Beware!
Meeting With Realtors
So you’ve decided to sell your home and have a fairly good idea of what you think it is worth. Being a sensible home seller, you schedule appointments with three local listing agents who’ve been hanging stuff on your front doorknob for years. Each Realtor comes prepared with a "Competitive Market Analysis" on fancy paper and they each recommend a specific sales price.
Amazingly, a couple of the Realtors have come up with prices that are lower than you expected. Although they back up their recommendations with recent sales data of similar homes, you remain convinced your house is worth more.
When you interview the third agent’s figures, they are much more in line with your own anticipated value, or maybe even higher. Suddenly, you are a happy and excited home seller, already counting the money.
A Sales Practice Called "Buying a Listing"
If you’re like many people, you pick Realtor number three. This is an agent who seems willing to listen to your input and work with you. This is an agent that cares about putting the most money in your pocket. This is an agent that is willing to start out at your price and if you need to drop the price later, you can do that easily, right?
After all, everyone else does it!
The truth is that you may have just met an agent engaging in a questionable sales practice called "buying a listing." He "bought" the listing by suggesting you might be able to get a higher sales price than the other agents recommended. Most likely, he is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price.
Why do some agents "buy" listings this way?
There are basically two reasons. A well-meaning and hard working agent can feel pressure from a homeowner who has an inflated perception of his home’s value. On the other hand, there are some agents who engage in this sales practice routinely.
What Happens Behind the Scenes
If you start out with too high a price on your home, you may have just added to your stress level -- and selling a home is stressful enough. There will be a lot of "behind the scenes" action taking place that you don’t know about.
Contrary to popular opinion, the listing agent does not usually attempt to sell your home directly to a homebuyer. That would be inefficient.
Listing agents market and promote your home to the hordes of other local agents who do work with homebuyers, dramatically increasing your personal sales force. During the first couple of weeks your home should be a flurry of activity with buyer’s agents coming to preview your home so they can sell it to their clients.
If the price is right.
If you and your agent have overpriced, fewer agents will preview your home. After all, they are Realtors, and it is their job to know local market conditions and home values. If your house is dramatically above market, why waste time? Their time is better spent previewing homes that are priced realistically.
Dropping Your Price -- Too Late
If you start out with a
high sales price, then drop it later -- your house is "old
news." You will never be able to recapture that flurry of initial
activity you would have had with a realistic price. Your house could
take longer to sell.
Even if you do
successfully sell at an above market price to an uninformed buyer,
your buyer will need a mortgage. The mortgage lender requires an
appraisal. If comparable sales for the last six months and current
market conditions do not support your sales price, the house won’t
appraise. Your deal falls apart. Of course, you can always attempt to
renegotiate the price, but only if the buyer is willing to listen.
Your house could go
"back on the market."
Once your home has
fallen out of escrow or sits on the market awhile, it is harder to get
a good offer. Potential buyers will think you might be getting
desperate, so they will make lower offers. By overpricing your home in
the beginning, you could actually end up settling for a lower price
than you would have normally received.
Realtors Talk to Each Other
If you start out with a sales price that is too high, there is a high likelihood you interviewed other agents. They didn't get the listing, of course. They got "aced out" by someone telling you what you wanted to hear.
If your listing agent routinely engages in "buying" listings, he has probably aced out scores of other agents in the same way. Being human, Realtors talk to each other. If they don’t like your listing agent, not as many of them will be showing your home.
In short, you may have ended up with an agent who was good at selling you, but not good at selling your house. And you’re going to pay them a commission for it.
It is human nature for you to want the highest price for your home. However, when you choose the agent who promises what you want to hear, it often leads to stress and frustration. Most of the time, it will take you longer to sell your home. Possibly, you will end up selling at a lower price instead.
Or maybe as a result of reading this article, you will choose one of the "good" Realtors in the first place. They are out there, you know.
Types of Listing Contracts
There are several different types of listing contracts, but very few of them are used. The "Exclusive Right to Sell" is the most common, but there is the "open listing," the "exclusive agency listing," and the "one-time show."
Open Listing
The "open listing" is mostly used by people trying to sell their home by owner who are also willing to work with real estate agents. Basically, it gives a real estate agent the right to bring buyers around to view your home. If their client buys your home, the agent earns a commission. There is nothing exclusive about an open listing and a home seller can give out such listings to every agent who comes around.
For that reason, no agent who accepts an open listing is going to market your home or put it in the Multiple Listing Service. If your home fits the criteria for one of their clients, and it is convenient, they may be willing to show it to their client.
That is all an "open listing" is good for.
One-Time Show
A "one-time show" is similar to an open listing in many respects, as it is most often used by real estate agents who are showing a FSBO (for sale by owner) to one of their clients. The home seller signs the agreement, which identifies the potential buyer and guarantees the agent a commission should that buyer purchase the home. This prevents the buyer and seller from negotiating directly later and trying to avoid paying the agent’s commission.
As with an open listing, agents will not be spending money on marketing your home and it will not be placed in the Multiple Listing System.
Exclusive Agency Listings
An "exclusive agency" listing allows an agent to list and market your home, guaranteeing them a commission if the house sells through any real estate agent or company. It also allows sellers to seek out buyers on their own.
This is not a popular type of listing agreement.
The reason an "exclusive agency" listing is unpopular is because there is no incentive for your agent and their company to spend money and time marketing your home. If you come up with your own buyer, they have spent money (and time) that cannot be earned back through the real estate commission.
Plus, it is too easy for greed and a lack of ethics to enter the picture. Some unethical buyers or sellers will try to cut out the agent, even though it was an agent's efforts that brought the buyer to the home.
If you find an agent willing to accept such a listing, do not expect too much from them. They will probably just place it in the Multiple Listing Service and sit around to see if something happens.
Exclusive Right to Sell
Giving a real estate agent the "exclusive right to sell" your property does not mean that there will not be other agents involved. Your agent is the listing agent and the most important part of his or her job is to market your home to other agents who work with buyers. Those agents will show your home to their clients. Regardless of who sells the home, even if you sell it yourself to a friend at work, your listing agent will earn a commission.
If you want full service from an an agent and his or her company, this is probably the only type of listing they will accept. Full service means an agent will advertise your home, place it in the Multiple Listing Service, market the home to other agents, and perhaps even hold open houses. This requires an expenditure of both time and money.
Only with an "exclusive right to sell" does an agent have a realistic expectation of earning anything on their investment in selling your home. That is why it is the most common type of listing.
Of course, the agent and their company still have to perform in order to get paid -- your home has to sell.
Details of a Listing Contract
Obviously the name of the seller and the property address will be included in the listing contract. There are many other things that are included, too, and you should be aware of them.
Price and Terms of Sale
When setting the terms of sale, the main thing you are concerned with is the price. You should have a basic idea of what your home is worth by keeping track of other sales in the neighborhood. Plus, you have probably interviewed at least two real estate agents and they have given you their own ideas. Exercise great care in determining your asking price, making sure not to set it too high or too low.
In addition to the price, you will disclose what personal property, if any, goes with the house when you sell it. Personal property is anything that is not attached or fixed to the home, such as washers, dryers, refrigerators, and so on.
There may be some item that is considered "real property" that you do not intend to include in the sale. Real property is anything that is attached to the home. For example, you may have a chandelier that has been in your family for generations and you take it from home to home when you move. Since the chandelier is attached to the house, it is considered "real property" and a reasonable buyer would normally expect it to go with the house. The listing contract should make clear that it does not, and your agent should also enter this information with the Multiple Listing Service.
Real Estate Commission
In most areas there is
a "customary" percentage that real estate agents expect to
earn as a commission. Usually, it is six percent of the sales price.
In some areas it can be as high as seven percent. However, just like
anything else in real estate, this amount is negotiable. When
completing the listing agreement, you and your agent will agree on the
amount of the real estate commission.
The listing contract
also specifies when the commission is earned. This is important and
you should pay close attention:
If a ready, willing and
able buyer presents an offer that meets your listing price and terms,
the agent has effectively earned the commission at that time. If
a buyer presents an offer and you reach agreement on price and terms
through counter-offers, the agent has also earned his or her
commission.
Sellers occasionally
get cold feet, just like buyers do. If this is going to happen
to you - make sure you consider it before you agree to terms with a
buyer.
Once you reach terms
with a buyer, you have incurred two contractual obligations. One
is to the buyer and the other is to your agent. if you should
decide to cancel just because you've changed your mind about moving --
the agent has earned their commission according to the terms of most
contracts. They will probably want to be paid.
Multiple Listing Service
Your listing contract
should specify whether or not the house will be listed with the local
MLS (multiple listing service). It is definitely in your interest to
have the house listed. This is because your sales force is
automatically multiplied by however many agents are members of the
local MLS. If your house is not listed, then you only have one agent
working for you instead of many.
This is where selling
"by owner" generally fails.
Owners see that an
agent puts a sign in the yard, prepares brochures, holds open houses,
advertises in the paper and on the internet, and they think this is
how houses are sold. It is easy to understand why owners believe
that, but it just isn't so.
Listing agents do those
things for three main reasons. First, because the owners expect
them to. Second, because it shows other sellers how much they do
to market a home, and it gets more listings. Third, because it
brings in clients who want to buy "some" house - though it
probably will not be yours.
Practically no one buys
the house in the ad or a home they visit during an open house.
Think about your own experiences when you bought the house you are now
selling. How did you find it? Probably through your agent,
who found it in the Multiple Listing Service.
The MLS is a huge
network and practically every local agent is a member -- and those
agents have clients looking to buy a home. That network is
what sells your house.
Agency and Salesperson Responsibilities
Many people think of
the real estate agent as a salesperson. Many agents (perhaps
most agents) would jump at the chance to be "just" a
salesperson. But they aren't just a salesperson. Most
states have legislated it so that real estate agents are also --
agents.
An agent is
"responsible" to their clients. They have a duty,
called a "fiduciary duty." This means the agent is
responsible to act in the best interests of their client. A car
salesman does not have to act in your best interests -- they just have
to sell the car. It isn't that simple for real estate agents.
Real estate agents not
only have to sell the house, they have to be responsible. That
involves a lot of liability, which is one reason for all the
disclosures and the pages and pages of contracts, and why they want to
be paid for being more than "just" a salesman.
The listing contract
will specify that your agent is acting as a "seller’s
agent." This means that, in the sale of your house, they are
working for you and only you -- and looking out for your best
interests.
However, there may be
times when your listing agent has a client who wants to buy your home.
For that reason, there is a little "wiggle room" in the
listing contract. If your agent also represents the buyer, the listing
contract should specify that they provide an additional disclosure
that details whether they continue to act as your agent or assume the
duties of a dual agent.
The contract also
provides permission for your listing agent to act as an agent for
others on other transactions. They can continue to list other
properties, and represent buyers looking at other homes besides yours.
The Lockbox
A lockbox is a basically a padlock with a cavity inside where a key to your home can be placed. Only someone with a key (electronic or mechanical) or the combination can get into the lockbox and access the key to your home. Having a lockbox available at your house makes it easy for other agents to get access to your house.
Without the lockbox, agents representing buyers would have to set appointments to meet you or your agent at the house so they could gain access and view the home. This would be inconvenient. Since almost every other house does have a lockbox available, if you do not allow one most agents will simply not show your property. You will miss out on lots of potential buyers.
The listing contract specifies whether you allow a lockbox or not. It is locked into place, usually on the front door and cannot be removed. Only other agents can access the key that is located within the lockbox.
Resolving Disputes with Your Agent
There are times when you and your agent have a disagreement that you cannot resolve by yourselves. Maybe the agent did a poor job or misrepresented something. Maybe your agent was really doing their job correctly, but you did not understand. Perhaps the agent will have a dispute with you.
The listing contract specifies what methods will be used to settle such disputes. You can choose to accept binding arbitration, which is usually cheaper than hiring a lawyer and going to court. Usually, matters that can be dealt with in a small claims court are excluded from having to go to binding arbitration.
You are not required to sign or initial the binding arbitration clause. This would leave you free to hire an attorney and pursue disputes in civil court instead of binding arbitration. However, we are not recommending one choice or the other. That is your decision.
Listing Commissions and Related Issues
Are
Commissions Negotiable?
In most areas there is
a "customary" percentage that real estate agents expect to
earn as a commission. Usually, it is six percent of the sales price.
In some areas it can be as high as seven percent. However, just like
anything else in real estate, this amount is negotiable. When
completing the listing agreement, you and your agent will agree on the
amount of the real estate commission.
Cut-rate commissions
With the advent of the
web, a lot of agents are offering "cut-rate" commissions.
Most of the time, lower commissions are tied to a lower level of
service. If all you want is to be listed with the Multiple Listing
Service and a sign in the front yard, then a cut-rate commission may
be right for you. If you want an agent who will actively promote your
property to other agents and spend money on advertising, then you
probably are not going to get that level of service with a reduced
commission.
At other times, the
lower commissions are offered when you agree to tie in to other
services offered by the broker, such as agreeing to use a specific
lender, escrow, settlement, or title company. The broker (not the
agent) will probably have some type of ownership or profit
participation in those businesses.
The problem with
agreeing to tie in to these other companies is that they do not have
to be as competitive in pricing those other products or services.
Sometimes they are priced in a way that allows them to earn back the
income lost by offering a smaller real estate commission.
Another common practice
when you see an ad for a reduced commission is that the compensation
is lowered when you agree to buy your next home through the same agent
or broker. Usually, the reduced commission is not really being offered
on the sale of your existing home but on the purchase of your next
one. The ads are usually unclear on this.
As a result, when you
see an offer for a lower commission, you should analyze what you are
giving up by accepting such an offer. It probably will not be readily
apparent in the advertisement. Be sure to ask lots of
questions
How and When the Commission is Earned
Your listing contract
specifies a listing price. Your agent’s job is to bring a
"ready, willing and able" buyer to present an offer. If you
reach agreement with the buyer, then the agent has done his job and
earned the commission. Once the sale has closed, the real estate
broker gets paid from the proceeds of the sale.
If the buyer proves
unable or unwilling to conclude the sale, the house is placed back on
the market and the agent has to begin earning his or her commission
all over again.
However, if the seller
backs out or does not accept an offer that meets the price and terms
of the listing agreement, the listing broker has still earned the
commission. They may want to be paid, even though you did not actually
sell your home. Therefore, it is very important to carefully consider
every detail when completing your listing contract and accepting an
offer to buy your property.
The Listing Agent & Basic Marketing
The "real" role of a
listing agent
When you bought your
home, you probably used the services of a real estate agent. You found
that agent through a referral from a friend or family member, or
through some sort of advertising or marketing. The agent helped you in
many ways and eventually you found the house of your dreams, made an
offer, closed the deal, and moved in.
For whatever reason,
now it is time to sell your home and you need a real estate agent
again. Many home sellers, especially those selling their first home,
tend to think all agents are similar to the one that helped them buy
their home.
Although real estate
agents can (and do) work with both buyers and sellers, most tend to
concentrate more on one than the other. They specialize. When you
bought your home, you probably worked with a "selling agent"
– an agent that works mostly with buyers. Because of the nature of
real estate advertising and marketing, the public’s main image of
the real estate profession is that of the selling agent (buyer's
agent).
As a result, many
homeowners expect their listing agent to do the same things that a
selling agent does – find someone to buy their home. After all, they
do the things you would expect if they were searching for buyers. A
sign goes up in the front yard. Ads are placed in the local newspaper
and real estate magazines. Your agent holds an open house on the
weekend. Your house is proudly displayed on the Internet.
But this is only
"surface" marketing. More important activity occurs behind
the scenes. After the "for sale" sign goes up and flyers are
printed, your agent’s main job is to market your home to other
agents, not to homebuyers.
The Listing Agent - Marketing Your House to Other Agents
The "For Sale" Sign
It seems fairly obvious that when you
put your house up for sale that your agent will put a "for
sale" sign in the front yard. The sign will identify the
agent’s company, the agent, and have a phone number so prospective
buyers can call and get information.
Signs are great at
generating phone calls, even if very few actually purchase the home
they call about. However, you might be one of the lucky ones. For that
reason, you should determine what happens when someone calls the
number on the sign. Does a live person answer the phone or does the
call go to a voicemail or recorder?
You want someone to
answer the phone while the caller is "hot." When buyers call
the number on the sign, the call should go to a live person who can
answer questions immediately. A potential buyer may be on the street
outside your home, placing the call using a cell phone.
Also, take a look at
the sign and see if it seems more interested in generating calls from
buyers, or if it seems more oriented toward advertising your agent’s
listing services to your neighbors.
Flyers and the Brochure Box
Your agent should
prepare a flyer that displays a photo and provides details about your
house. There should also be a phone number so buyers can contact your
agent to get additional information. The flyers should be displayed in
a prominent location in your home and also in a brochure box attached
to the "for sale" sign.
The brochure box is
convenient for those buyers who drive by and just happen to see the
"for sale" sign in front of your house. It provides enough
information so they can determine if they want to follow up with a
phone call or inform their own agent they are interested in your
house.
The Multiple Listing Service
Even before the sign is up and the
brochures are ready, your agent should list your property with the
local MLS (Multiple Listing Service). The MLS is a database of all the
homes listed by local real estate agents who are members of the
service, which is practically all of the local agents.
Important information
about your property is listed here, from general data such as square
footage and number of rooms, to such details as whether you have
central air conditioning or hard wood flooring. There should also be a
photo, and a short verbal description of what makes your house
"special."
Agents search the
database for homes that fit the price range and needs of their
clients. They pay special attention to homes that have been recently
placed on the market, which is one reason you get a lot of attention
when your house is first listed. Many agents will want to preview the
home before they show it to their clients.
The main point about
having your house listed in the MLS is that you expand your sales
force by the number of local MLS members. Instead of having just one
agent working for you, now you may have hundreds or more, depending on
the size of your community.
The listing agent’s
main job to make sure that the other MLS members know about your
house. This is accomplished through listing your house in the Multiple
Listing Service, broker previews and advertising targeted toward other
agents, not homebuyers.
Showing Your House to Home Buyers
Convenience & Availability
Your house should
always be available for show, even though it may occasionally be
inconvenient for you. Let your listing agent put a lock box in a
convenient place to make it easy for other agents to show your home to
homebuyers. Otherwise, agents will have to schedule appointments,
which is an inconvenience. Most will just skip your home to show
the house of someone else who is more cooperative.
Most agents will call
and give you at least a couple of hours notice before showing your
property. If you refuse to let them show it at that time, they will
just skip your house. Even if they come back another time, it will
probably be with different buyers and you may have just lost a chance
to sell your home.
Why You Should Not be Home
Homebuyers will feel
like intruders if you are home when they visit, and they might not be
as receptive toward viewing your home. Visit the local coffee house,
yogurt shop, or take the kids to the local park. If you absolutely
cannot leave, try to remain in an out of they way area of the house
and do not move from room to room. Do not volunteer any information,
but answer any questions the agent may ask.
Lighting
When you know someone
is coming by to tour your home, turn on all the indoor
and outdoor lights – even during the day. At night, a lit house
gives a "homey" impression when viewed from the street.
During the daytime, turning on the lights prevents harsh shadows from
sunlight and it brightens up any dim areas. Your house looks more
homey and cheerful with the lights on.
Fragrances
Do not use scented
sprays to prepare for visitors. It is too obvious and many people find
the smells of those sprays offensive, not to mention that some may be
allergic. If you want to have a pleasant aroma in your house, have a
potpourri pot or something natural. Or turn on a stove burner (or the
oven) for a moment and put a drop of vanilla extract on it. It will
smell like you have been cooking.
Pet Control
If you have pets, make
sure your listing agent puts a notice with your listing in the
multiple listing service. The last thing you want is to have your pet
running out the front door and getting lost. If you know someone is
coming, it would be best to try to take the pets with you while the
homebuyers tour your home. If you cannot do that, It is best to keep
dogs in a penned area in the back yard. Try to keep indoor cats in a
specific room when you expect visitors, and put a sign on the door.
Most of the time, an indoor cat will hide when buyers come to view
your property, but they may panic and try to escape.
The Kitchen Trash
Especially if your
kitchen trash can does not have a lid, make sure you empty it every
time someone comes to look at your home – even if your trash can is
kept under the kitchen sink. Remember that you want to send a positive
image about every aspect of your home. Kitchen trash does not send a
positive message. You may go through more plastic bags than usual, but
it will be worth it.
Tidiness Counts
Not everyone makes his
or her bed every day, but when selling a home it is recommended that
you develop the habit. Pick up papers, do not leave empty glasses in
the family room, keep everything freshly dusted and vacuumed. Try your
best to have it look like a model home – a home with furniture but
nobody really lives there.
Seller's Class
