|Selling A Home
Time to Sell - You Want
- The right price
- At the right terms
- In the right amount of time.
To Reach These Goals:
- Make you home look good.
- Price it at market value right away.
- Use real estate professionals.
Make Your Home Look Good
It's important you make your home look presentable before you put it on the market. Exterior and interior paint will give you the best return on your money.
Clean up the yard, fertilize and add some flowers for that most important first impression.
Have an agent preview your house to give you suggestions.
If yours is an older house, your agent should recommend a termite and or property inspection at the beginning.
This can work to your advantage in a couple of ways. Negotiations go smoother if you are aware of problems at the beginning.
Allows you time to fix or correct things before an offer is brought in, which may give the buyer the confidence to offer more. Knowing of problems up front will give you and your agent more time to come up with ways to negotiate around them, should you choose not to fix them.
Price It Right
Pricing your house at market value from the start will typically result in the best price you will get for the property in the least amount of time and inconvenience to you.
Listing your property high at first only helps to sell the other houses like yours on the market. Remember, buyers preview a lot of homes so they know what is overpriced.
The sales price also has to appraise at market value in order to get a loan on it.
Pricing a Home is Key
When you figure extra mortgage payments, property tax, insurance, the time and energy to keep your home looking good and the inconvenience of having your home on the market a couple extra months, over pricing isn't practical.
Real Estate Professionals
Real estate today has become a business that is very labor intensive on many fronts. Continuing education is required to stay up with all the changes and requirements for a real estate transaction. Most home owners don't have the time or knowledge to successfully market and sell their home and get the best price.
To save a commission, some people start marketing their home by FSBO (for sale by owner). Some are successful, while most eventually list with an agent.
Most buyers work with an agent, because they don't want to go through the buying process without the use of a knowledgable professional which they essentially get their service for free. Since the commission on a listed house is typically the source of income for the buyers agent, FSBOs get far less market exposure. Agents typically prefer not to work with FSBOs as they wind up doing much more work. Why - because FSBOs typically don't have the knowledge and required forms needed for selling a home so the agent winds up providing for and consulting with the owner.
Real estate professionals have the needed information to arrive at market value. A real estate agent will conduct a Comparative Market Analysis(CMA) using the Multiple Listing Service (MLS). This involves a survey of homes that are on the market or have recently sold that are similar to yours. The agent will advise you on the additional value (or deficit) of your home's unique features and factor that into the equation.
Going with the agent who recommends the highest price isn't always the best. This technique is used to get the listing. Dismiss any agent who can't justify a high price estimate. Sellers mistakenly believe that they should price their house higher knowing that they can come down in price if it doesn't sell. Buyers shop around before buying and recognize value in a specific price range because of comparison shopping.
Homes that wind up on the market a long time typically sell below market value.
A quick word about commissions. Commissions are negotiable. They can vary between 4%-10%, depending on the type of property, current market conditions, and the sellers motivation. 6% seems to be most typical. Many people wrongly assume the whole commission goes to one person. Typically it is divided four ways: the listing agent, the listing agent's broker, the buyer's agent and the buyer's agent's broker. Referral fees and franchise fees many times are a factor also.
Getting your home listed at 5% may not net you more then if you listed at 6%.
When a home is listed, the commission is split between the listing office and the buyers agent's office. When agents show properties to potential buyers, one thing they generally look at is how much commission is being offered. Agents typically will show homes offering 3% before the ones offering 2.5%. If your home is offering 2.5% to the other agents, it will get fewer showings meaning fewer people will even look at your house. The result: you will be helping other sellers get their homes sold first. If the listing office offers 3% to buyer agents on a 5.5% or less listing contract is the best of both worlds. This scenario reduces costs to you along with good marketing incentives for other agents.
MLS fees, insurance and membership dues can run thousands of dollars a year for each agent. There is the cost of overhead, computers, office equipment, transportation, signs, advertisement and so on. It's a business with many expenses without a weekly paycheck.
Marketing Real Estate
The MLS is still the best effective way to market your home to the public.
The internet is fast becoming the preferred method for finding homes. More and more potential buyers start looking for homes on the internet. A tremendous amount of information can be found on the internet. Soon it will be the norm for buying and selling real estate.
Now one can take a virtual tour of a home at the click of a button. More and more homes will be marketed this way, especially high end homes or special property. Real estate companies that use this technology will be serving their clients better. Flyers on a For Sale sign are common today, virtual tours will be common tomorrow. See examples of Virtual Tours.
A FOR SALE sign should be placed on your front yard. Not allowing a sign on you property will greatly decrease your marketing power. Use signs that have a box for flyers about the property.
A Lock Box
It's important that you have a lock box so agents can preview and show the property during the day. Not allowing a lock box will dramatically reduce the needed exposure to properly market your home. Lock boxes are very secure devices that records who uses it.
Agents don't like to show property if access is an inconvenience. Use a lock box.
Talking Houses, is a new effective marketing device, allowing potential buyers driving by, to tune in a radio station to hear about your home's features. It also allows the agent to get a phone number to that person for further marketing.
Advertising in property magazines, newspapers and open houses are additional methods used and probably the least effective ways to market real estate.
Does Size Matter
Is a bigger real estate company better?
Most large franchises want sellers and their agents to believe that.
Which Company is the Best?
Today, most of the large "name brand" companies were bought out and owned by one company - NRT. Companies such as Coldwell Banker, Contempo, Cornish & Carey are owned by NRT. Larger companies can't be as flexible on commission because they have more layers to feed. Smaller companies have less overhead with less or no other ownership involved to feed. As a result, a lower commission can be agreed upon with the same effective marketing a large company offers. Talk with agents from different companies to find out what services they can provide and decide what is the best value for getting your property sold.
Choose an Agent / Company
- Good local market knowledge
- That markets through the MLS
- Has good web site - internet marketing
- Give the best value for commission rate.
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