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Using a Real Estate Agent or going it alone?
The main reason that home owners decide to sell their homes themselves is to save the commission charged by a real estate agent. The commission rate may vary, depending on where you live or what agency you choose, but it is generally upwards of 5%. Weighing against that commission rate are the advantages that having an agent offers.
Advantages of using a real estate agent:
- Handling your own sale means you will be responsible for placing ads, answering phones and showing your home to strangers, a real estate agent has marketing systems in place for listing and selling homes.
- An agent will take the potential buyer through the home at scheduled times, an agent can sell the house, not just show the house.
- The Agent is experienced in the local market and will help you determine a proper selling price.
- The agent will negotiate with the buyer for you.
- The agent can find qualified buyers.
- An agent can offer advice on preparing the house for a faster sale, and closer to the asking price.
- When your selling on your own buyers who know you are saving on an agent’s commission may offer less for your home, wiping out the financial incentive to do it all yourself.
- Remember: a real estate agent probably knows a lot more about the business of selling a home than you do.
In the end the decision is yours. If you have lots of spare time, and some experience that will allow you to research the market, establish a competitive price and then show and sell your home, you may feel going it alone is the answer. If your time is valuable, the commission a real estate agent takes will more than pay for itself.
Are you ready to move?
The home-selling process typically starts several months before a property is made available for sale. It's necessary to look at a home through the eyes of a prospective buyer and determine what needs to be cleaned, painted, repaired and tossed out.
Ask yourself: If you were buying this home what would you want to see? The goal is to show a home which looks good, maximizes space and attracts as many buyers - and as much demand - as possible.
While part of the "getting ready" phase relates to repairs, painting and other home improvements, this is also a good time to ask why you really want to sell.
Selling a home is an important matter and there should be a good reason to sell - perhaps a job change to a new community or the need for more space. Your reason for selling can impact the negotiating process so it's important to discuss your needs and wants in private with the REALTOR® who lists your home.
Finding a Good Real Estate Agent
The size and nature of a real estate transaction requires an agent you can trust to act in your best interest. Finding the right agent can be a chore in itself. Consider asking friends and neighbors for recommendations, or use a service such as Most Referred® Real Estate Agents, to find agents that other agents would use. Before settling on an agent:
- Talk to several agents before picking the one you want to work with.
- Walk through your home with an agent to get a feel for how that person will handle prospective buyers.
- Ask prospective agents how they plan to market your home.
- Don’t sign with an agent just because he or she suggests the highest asking price.
- Negotiate the broker’s commission prior to listing your home, and sign for a limited period of time—usually three to six months.
Remember: you're agent has a fiduciary obligation to act in your best interest. They are there to represent you in the real estate transaction, and the value of their skills and experience should not be underestimated.
Pricing Your Home for Sale
Today's consumers are comparison shoppers. Although eager to achieve the best possible return on their hard earned investment dollars, they will shy away from properties that are listed too high or too low.
Listing above market value, you will more than likely sell your neighbor's house instead of yours, or at the very least, risk a lack of potential purchasers visiting your home. By listing too low, you create the impression that you are desperate for the sale, or that something is seriously wrong with the structure.
Your Real Estate Agent will provide a Comparative Market Analysis (CMA) that includes information on competitor listings, properties that have recently sold, and those that are currently pending. Factors affecting the price of a home:
- The property's location and lot size.
- The home's condition, size and age, and any improvements you have made.
- Review the assessed value of your home, taxes, and utility costs.
- Repairs required.
- Economic conditions
- Supply and demand in the local housing market
- Seasonal influences
- Local schools
- Average home prices in the neighborhood
- Your home's extras -- pool, fireplace, central air, etc.
Buying or selling property in today's fluctuating and competitive marketplace takes industry knowledge, a proven track record, and expert opinion. It also takes dedication, commitment and the ability to achieve the goals set before you. When discussing the critical factors in the sale of any property, your Real Estate Agent's expert opinion will guarantee that your home is accurately positioned for market dominance.
In the end, it's still your choice as to pricing. However, by taking into account years of professional experience and real estate wisdom, you increase the possibility of selling your home within the critical first 30 days for the highest possible sale price, or achieving a fair market price for the home you are purchasing.
Disclosing the Facts about your home
No home is perfect! In one way or another, they all have defects to some extent. However, concealing problem areas can result in costly lawsuits....at your expense! The horror stories come in many forms. During the height of purchasing excitement, not everyone will notice the cracked foundation or faulty roof that leak only when it rains, turn on the hallway light to experience electrical gymnastics, or even flush the toilet to watch it overflow because the septic lines are blocked.
Undisclosed defects can come back to haunt, destroying what you originally considered protected....your pocketbook and peace of mind! It is in both your best interest and that of your purchaser to obtain a structural inspection during contract negotiation. Settlement and legal fees cost far more than if you had agreed to a price concession or repaired it yourself!
Home Repair Priorities - for selling your home
You consider your home one of your most prized possessions. You have lavishly decorated to individual taste, using paint and wallpaper as expression of your personality. Eyes glued to yet another magazine, you finally found the perfect window treatment. Your furniture reflects the colors and textures that have become important over the years. And don't forget, you DID spend hour after weekend hour bent over that magnificent garden. However, it will cease to matter once you sign the "For Sale" agreement. The paint, the drapes and the carpeting mean nothing to those outside the family. And that lovely bathroom tile you imported from some exotic land isn't even mentioned. How could they NOT notice that you spent a great deal of money and months waiting patiently for it to arrive at the shipyards?
The answer is simple... your potential purchasers are not emotionally involved in your investment. Unlike you, they see the flaws you have come to ignore over the years. They will notice the carpet your cat has used as a scratching post, the tap that drips incessantly, and the ugly stain in the kitchen caused by the leaky roof. To them, it's nothing but added expense, and probably not worth the effort. After all, there are many, many more properties on the market other than just yours. However, the marketability of your home WILL increase if you take the time and effort to view it through their eyes, and take extra care in ensuring that minor things are attended to.
One sure way of guaranteeing that your potential purchasers can see themselves enjoying life in your home, is to make it as presentable and uncluttered as possible. What is known in the industry as "curb appeal" may become the difference between "Sold" and "continued showings". The tiny hand print that adorns the front door is cute only to you. To the other side, it's a combination of filth and downright laziness. Despite the cost of a can of paint, your family room should NOT resemble a mud-room. And remember the sun shining through the windows? A little bit of elbow grease goes a long way!
When the time comes to list your home for sale, take into account that your potential purchasers are searching for new roots. They need to be enticed, enthralled and enchanted at first glance. It needs to feel like THEIR castle, THEIR history, THEIR love story the moment your home comes into view. If expense is a concern, do it yourself. If there's litter in the front yard or the grass needs cutting, hire the teenager next door. Five dollars a time REALLY CAN make the difference! If not, there are numerous contractors, painters, decorators, cleaning services, and landscaping firms that your Real Estate Agent can recommend. For the more major repairs including replacement roof, flooring or structural defects, etcetera, you can opt to invest in the repair, or you can choose to disclose this information in the Listing Contract.
Also pay attention to the "finishing touches" - the serene background music, the tidy bathroom , the made beds, and the bouquet of flowers. Open a few windows, the air will be fresher. A welcome mat at the front door is inviting, and please, no laundry running in the machines while you attempt to catch a few more minutes of lost time! By being ruthlessly honest in your evaluation of your home prior to listing, you will:
- Position your home at the top of the "Too See" list
- Guarantee that your own roots will be transplanted sooner rather than later
- Protect your hard earned investment dollars.
Curb Appeal - Appearance is everything.
When potential buyers drive by your home what do they see? A good first impression is key bringing in potential buyers.
Take this list into consideration when looking at the outside of your home:
- Is the yard well maintained? Lawns mowed, hedges trimmed?
- Are garbage and debris stored out of sight?
- Are lawn mowers and hoses properly stored?
- Is the garage door closed?
- Does the house need painting- the window casings, shutters, siding or doors?
- Are there cracks in the foundation or walkways?
- Does the driveway need resurfacing?
- Are the gutters, chimney and walls in good condition?
By taking care of the little and often inexpensive details you can sell your home faster and at the price you are looking for.
Preparing Your Home for sale
A real estate agent can be a helpful guide for setting up a home to be sold. Their experience allows them to prepare a home for an easier sale. If the potential buyer makes it past the outside, it’s the interior of the home that makes the sale. Remember, there are plenty of easy and inexpensive improvement that you can make to improve your home’s interior.
A clean home is your number one priority.
Your windows, floors and bathroom tiles should sparkle. Make sure you have clean heating and air conditioning filters. Shampoo dirty carpets, clean tubs and showers, repair dripping faucets and oil squeaky doors. Keep your home neat, clean and picked-up at all times. It may not seem fair, but a peek in the oven may be the hallmark by which a buyer judges how well you have kept up your home. Consider how your home smells. You may be used to the smell of a pet or cigarettes, but such odors can be a strong turn-off to potential buyers. Insure that your storage areas are tidy, and remove materials that may be to others who may not share your same views, beliefs or sense of humor.
Creating a vision
The buyers need to be able to visualize themselves living in your space, too much clutter can be a distraction that makes it harder for them to achieve that vision. If you have too much furniture consider putting some in storage. Not enough furniture try renting some. If you need some ideas visit a show home to see the levels of furnishings and decoration that is not too distracting.
Define living spaces
Having a living room/office/dining room/ storage locker can be a negative to buyers, not having an obvious purpose for a room makes it look less useful. Rearrange furniture to create focus areas inside of a larger room, define the spaces through a good layout.
Power of Paint
Painting is an inexpensive and easy way to give a room a makeover. You can paint a room in less than a day. If a room needs a fresh coat of paint, use a neutral off-white. Provide a blank canvas for them to create their vision. Light colors make the rooms seem larger, and airier. A fresh coat of paint also looks cleaner.
Security
Be certain to remove valuables such as jewelry and other items from view. It might be wise to put these items in a safe deposit box before showing your home.
Setting the Mood
On the day of a showing give you house a homey feeling, put out some live flowers and fresh guest towels in the bathroom. Place scented potpourri around the house or, pop a batch of frozen cinnamon rolls into the oven for a welcoming aroma. Remember, cosmetic changes do not have to be expensive, and giving the impression that your home is well maintained will help you get the price you want.
Changing Homes – time becomes money
If your are buying a new home and selling your current one, place your home on the market as far in advance as possible of purchasing a new one. Selling your home prior to purchasing a new on allows you greater flexibility in financing as well as the piece of mind of not having to worry about selling that home after you’ve moved into your new one. Depending on market conditions you may be better off selling your current home and renting until you find the right home for you. If you find a new home first and then try to sell your present home, you may wind up with two mortgages, and in a financial position that threatens both properties. A real estate agent may be able to provide you with advice on current market conditions, and the potential challenges you may face.
Also keep in mind that many events need to be coordinated when you sell and buy for example closing and moving dates have to be arranged. Put all agreements about dates in writing, and protect yourself by negotiating financial penalties for failure to comply. The firmer everyone commits to a window of dates and sticks to them, the better for all involved.
Qualifying a Buyer
At some point either your or the agent will need to determine the viability of a potential buyer. Identifying whether a potential buyer will be purchasing your home or not, depends on several factors:
- The buyer's debt and credit history.
- The buyer's current income and employment.
- The buyer's cash position and availability of a down payment.
- The length of time the buyer needs before closing on your home.
- How interested the buyer appears to be in your home versus other homes.
Don't underestimate the time that it takes to deal with each potential buyer. Having the skill to determine if a person is serious and able to purchase your home can save you a lot of time and headaches.
Real Estate Sales and Taxes
Selling a home can have a major impact on your tax returns. A tax consultant can help you determine the effects that selling your home would have on you. Here are some factors that could effect your taxes:
- Whether you purchased the home or acquired it by gift or inheritance.
- Whether you used your home partly for business or rental.
- Costs associated with selling your home.
- Home improvements or additions, which may help to offset capital gains.
- The sale of your home. In certain cases you can exclude up to $250,000 in gain ($500,000 for married couples filing a joint return) on the sale of property that was your principle residence for at least two years. Generally, you can use this exclusion every two years.(USA).
Seek Legal Representation
When selling your home it’s a good idea to be represented by an attorney especially an attorney with expertise in real estate transactions. When a potential buyer puts an offer in writing and you accept it, the signed acceptance becomes the sales contract. Your attorney can help you protect your interests with the sales contract at the closing.
Elements of a sales contract:
- The Sale price.
- Items included in the purchase.
- The amount of the down payment.
- The date of settlement and possession date.
- Contingencies to the sale--inspections (e.g. structural, lead-based paint, radon), required improvements, legal review of the contract by the buyer's or seller's attorney, etc.
- The amount and length of the mortgage loan, interest rate and time limits to secure the loan.
- Determining which closing costs are to be paid by the buyer and which by the seller.
The fee you pay the lawyer can easily be offset in the long run.
Disclaimer: This information is intended as a guide for those interested in finding a real estate agent to assist them with the purchase or sale of a home. It is not intended to solicit services from those who have already signed listing agreements with a licensed Realtor or to act as legal advice. It is always best to take your questions to a licensed real estate professional in your local area.
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 Quick Links for Real Estate
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Find a Property
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Sign up today for your own Listingbook® Account. Search the MLS like an agent.
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Keep track of your favorites houses that you will see at Open House. See how many people are viewing your listing online.
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Use the "Need an Account?" link in the members area on the left and get started searching.
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Go with the Best and Get...
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The Most Money for Your House
and
The Most House for Your Money
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