Chapter 7: Important Advice For Sellers
If you have decided to sell your home, prepare yourself by investigating the house market in your area.
Check large real estate web sites like HomeGain. They will show you the cost of similar houses in your area, usually for free. Local newspapers often list the selling price of local houses as well as how long they had been up for sale. Pay attention to houses sold in recent months more than anything else.
Compare recent prices to those of a year ago to find out if the market is warming up, cooling or staying the same. Doing this, will give you an idea of what your home is worth.
Choosing REALTORS®
You can sell your home without a REALTOR®. This will leave you with the extra 6% that REALTORS® generally earn from you. Remember though that there is a lot of work required to advertise the house and then to show it to others.
If you choose to work with a REALTOR®, get referrals from friends, advertisements in a local newspaper or the Internet. You can not just accept any recommendation. Be sure to set an appointment and interview the REALTOR® for competence and reliability.
The things that you should consider when choosing a REALTOR® are whether or not they are professional and personable. Would you find this person easy to deal with if you were a buyer? Are they knowledgeable and quoting prices similar to what you have discovered doing your homework? Be careful not to be flattered by a REALTOR® that quotes high prices. Rather, trust in information you have researched for yourself.
What you need to know about commissions
A REALTOR® will require you to sign a listing agreement. This contract lays out the details of your agreement with the REALTOR®. It specifies things such as how long the REALTOR® will represent your home and with what compensation.
Generally REALTORS® prefer to have an exclusive list. This means that they would be paid a commission when your house sells regardless as to whether or not it was directly sold through them. Commit to just three months and as little as one month during a hot market. This gives you freedom to make a change if the REALTOR® proves to lack enthusiasm.
When you are given a listing agreement, discuss all of the variables of your agreement. If there are times when you don't want the house available for walk-throughs share that information at that time.
Try to negotiate the amount of the commission. If your house is going at a high price, the REALTOR® may not worry if you suggest a commission of 4% or 5%. On the other hand, if it's a buyer's market, you may want to add the commission if the REALTOR® can get you a buyer within 5% of your asking price.
Prepare for open house
Take the time to clean up your house before you put it on the market whether you are selling yourself or working with a REALTOR®.
Take a good look at your house. Is it cluttered? You may need to give it a new paint job. Definitely tidy it up. Use the attic or the basement to store unused furniture or just items that are in the way and cluttering the place up. Don't forget to mow the lawn and spruce up the garden. These small details can potentially add thousands to your ultimate sale price.
Coming up with an asking price is fairly simple. You have to look at what other homes in your area are selling for. Forget about what you spent on the house, how much you have spent on repairs and renovations and even what you need to move into your new place. What matters is the current state of the market.
Even the little research that you did when you first thought of selling your home will give you an idea of the state of the market. Your REALTOR® should be able to let you know what has happened with other recent sales in the area.
Timing is everything
In addition to the amount a house sells for, find out how long they were on the market for as well. If houses are being sold in a week or two and you are truly in a seller's market then you can consider adding a premium to the amount of the home.
Beware! The most critical time in selling a home is during the first month it hits the market. Excessively high prices may turn potential buyers and REALTORS® off and you could have a very difficult time attracting them back later, even if you bring the price of your home down.
Whenever you get an offer via your REALTOR®, ask for advice as to how to respond. Your response will very much depend on the current market, on how you priced the home in the first place, and on how much and how quickly you want to sell.
The contingency clauses in any bid are important. Be sure that your lawyer or REALTOR® reviews these. It is not a good idea to agree to a clause that requires the buyer to sell their home before buying yours.
Also, contingencies should have an expiration date. For example, if one contingency is that the agreement will be made if the home passes inspection, it should also be stated that inspection must occur within a week or ten days an offer that has been accepted. A time limit should also be placed on the closing date. The buyer should be required to commit to know more than 60 days from acceptance.
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