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Seller 101
by Scott Robinson / Robinson Realty

Selling your home is one of the most important financial decisions many  will make in their lives.  For most
people, the equity they have built up in their home is their largest source of wealth.  With the amount of emotion and money that is involved in selling your home, it is easy to see how important it is to be prepared and to make good decisions.  Hopefully the following information will help. Please contact me if you have any questions.

How can the Internet help me sell my home?
The Internet has changed the way homes are bought and sold in today's market. With over 40% of buyers using the Internet at some point during the home buying process, it is no longer extra advertising, it is necessary advertising.  There are literally hundreds of websites where your home can be posted (Useful Websites).  Realtor.com is the official site of the National Association of Realtors and is by far the most popular.  Make sure your agent has a clear and effective marketing plan that includes Internet exposure and a Virtual Tour.  

Do I need to have "Open Houses"?
Approximately 1% of homes are sold through open houses.  There are basically three reasons why agents want to host open houses: 1.  To sell the house.  2.  To meet buyers.  3.  The seller requests them.  Open houses can be helpful for spreading the word about your home, but the chances of your home selling as a result of an open house are fairly slim.  It is up to you if you would like to have your agent host open houses, but don't expect it to sell your home.  Because every bit of positive energy helps I or an associate will do as many open houses as are needed to sell your home.

How important is it to keep my home clean during showings?
You have 15 seconds until a buyer has developed an opinion about your property.  The way your home
presents itself is critical to its value. Prospective buyers react to what they see, hear, feel, and smell even
though you may have priced your home to sell.  It is vitally important to always keep your home in showcase condition. I taught "Getting Top Dollar for Your Home at Pierce College" and if contacted will share what will help you most upon request.

Should I show the buyers around the house?
One of the most common mistakes sellers make is overselling their home.  If possible, try to leave the house
during showings.  If you can't leave, then make yourself available to answer questions, but DON'T crowd the
buyers.  Quite often, sellers talk buyers out of buying their home rather than convincing them to buy it. Buyers are less likely to view the entire home if the seller is escorting them around and "selling" the home to them.  Plus, sellers usually reveal too much.  There are certain disclosures you are required to make, but there is some information (including why you are moving, and when you need to move) that you are not required to disclose.  An over zealous seller often makes a buyer feel uncomfortable and trapped.  It can also make the seller appear desperate.  Stay at a comfortable distance and let the buyers lead the way.

Why shouldn't I tell the buyer why I need to move?
When the buyer's agent is showing your home, they are also listening for key information to use in a negotiation and pricing your home.  Your reason for selling can play a large role in what they offer.  For example, if you are being transferred and your new home is closing in two weeks, they know you are probably desperate and their offer will reflect that.  Be careful what you reveal; it can literally cost you money.

Should I sell my home first before I buy a new home?
Sometimes people will want to look for a new home before putting their own home on the market. Typically, this is not a good strategy in this market.  Sellers are reluctant to accept an offer to purchase their home when it is contingent on the buyer selling his or her home.  It's not necessarily a bad idea to take a look at some of the competition before you list your home, but what happens if you find your dream home? Chances are it won't be available by the time you list and sell your current home.  So consider selling your current home first before you spend a lot of time searching for your new home.

If it is a seller's market, shouldn't I expect my home to sell fast?
There are 5 things that affect a home's value

1. Location

2. Market conditions 

3. Pricing

4. Condition of the home

5. Marketing.  

 

Location and market conditions are controlled by outside
factors, the seller determines the asking price and the condition of the home and the agent controls the
marketing of the home.   If all of these factors are strong, then you should expect a relatively quick and easy
sale.  I will help you in determining the saleability of your home and the strength of the current market.  

Should I select the agent who suggests the highest price?
When selecting an agent, avoid the temptation to select an agent solely based on their suggested list price.  
Some agents use this technique as a way to get the listing, only to ask for a price reduction when it doesn't sell.  Does this mean to avoid the agent with the highest price?  No.  Suggested sales price is only one element of the proposal.  Marketing, advertising, and expertise should also be considered when selecting an agent.

Who pays the commission?
The seller.  When a seller lists his or her home, they sign a contract agreeing to pay an agreed upon
commission to the listing office.  When the home is put in the Multiple Listing Service, the listing office agrees to split the commission with the agent who brings the buyer. The commission typically ranges between 5-7% of the sales price.  The buyer pays no commission to either of the agents unless there is a special arrangement.

Is it better to list with a big company?

Experience will tell you that no matter the company you choose, it's the Agent/Broker or individual who
represents you that's important. If that individual doesn't have the experience and compassion to do a great job for you, it will cost you.

Is it important for buyers to know what I paid for the home or what I need it to sell for?
Sometimes sellers believe that they, or the agent, determine the price of the home.  The truth is the market
determines the price of the home.  Buyers aren't interested in what you paid for the home or what you need to net from the sale.  Buyers are only interested in paying at (or below) what a comparable home in the area would sell.  However, your agent should be able to market the property and negotiate on your behalf to get the highest possible price and the best possible terms for you.

What should I counter offer?
Many aspects of the deal are negotiable in addition to price.  I find out what's important to your buyer and use it to your advantage during the negotiation.  For example, if the buyer needs a quick escrow and you would like a higher price, your agent should negotiate a shorter escrow for a higher sales price for you. Other negotiable items include closing costs, seller financing, and personal property.  Knowing what's important to the parties can be very helpful when negotiating the sale of your home.

Is selling "For Sale By Owner" a great way to save money?
Selling "FSBO" may cost you more than it saves you:

1. According to the National Association of Realtors, 85% of FSBO's end up listing with an agent.  However, by the time they do list with an agent, many FSBO's have already spent a lot of time and money marketing their home that will never be returned.

 

2. FSBO's still have to deal with Buyers who  typically have an agent that represents them.  Most FSBO's end up paying at least half a commission (3%) to the agent who brings them the buyer (and never get to pick their representative, or sometime never get any service on their side.).

 

3. Most buyers know that the seller is saving the commission and the buyer will often negotiate a lower price knowing that the seller is the one benefiting from the lower commission (remember, the seller pays the commission, not the buyer).

 

4. The vast majority of homes are sold through agent referral (The Multiple Listing Service).  According to the
National Association of Realtors, home sales break down as follows:  MLS 65%, yard signs 15%, classified ads 8%, friends 5%, knew the seller 4%, other 4%.  If a sign and classified ads are your main source of advertising, you will have about a 23% chance of being successful.  

 

5.The real estate transaction is very complex and has a lot of liability.  Many sellers mistakenly think that escrow will represent them and provide advice.  Escrow will not guide you through the proper disclosures and forms that need to be completed and they are forbidden to provide any advice.  Without representation, your risk for future lawsuits is substantially higher.  

 

Should you open your door and let any stranger into your bedroom, bathroom or child's  room?
Has this person been screened by a professional or possibly a burglar or worse checking you out?
I am a professional that makes sure licensed people bring screened clients to your property. In most cases I
personally make sure everything works out perfectly.

Should I order an appraisal to find out what my house is worth?
An appraisal tells you what your house may be worth, not what it can sell for.  An appraisal is typically done after the home is in escrow to protect the bank form over lending on a home.  My "Comparative Market Analysis" is usually a better indicator of value, and will save you about $350.  Let me show you "comparable" (properties like yours, in your neighborhood, recently sold, same size and year built.) to help you understand the value.

What's wrong with overpricing my home?  I can always reduce the price later.
When you overprice your home, rarely will the market be fooled.  Overpricing a home usually makes you less money than if you had priced it correctly to begin with.  An overpriced home will receive little response from the Real Estate Community and often end up on the market for months, leaving you with a few important drawbacks:

 

1. Your home is likely to be labeled as a "troubled" house by potential buyers and other agents, leading to a
lower than fair market price when an offer is finally made.

 

2.  Your overpriced home will actually make other homes for sale in your neighborhood look like a better deals.

 

3.  You will end up wasting a lot of time marketing and showing a home that would never sell at the above market price. Many agents will show your home to make another look good for the price. Make sure you price your home correctly.  It will save you a lot of time and frustration.

Under Pricing your home. The definition of "value" in Real Estate is; A property that is properly marketed
(Advertised properly in the MLS.) and  an informed buyer pays the most he is willing, but not compelled to pay, would pay, and the lowest price a seller, willing but not compelled to sell, would accept. So what I am saying is that market price, while strongly effected by over pricing as stated above, what happens if we underprice a property?

 

An under priced home creates excitement. Nobody wants to miss out on a good deal! This high level of
excitement on your property causes a lot of people to see it and write offers. You will quickly find out what your house is worth and there is often a chance it will go over market. With this level of excitement people often don't want to lose a great deal and will pay more than market. These situations
must be handled very carefully with proper contractual verbage to keep the buyer in the deal to the close of
escrow.

A "Comparative Market Analysis" or  CMA is a report prepared by a Real Estate Agent that estimates
the value of a property.  The report takes into consideration variables such as recent sales, currently listed
homes, expired listings and more.  Adjustments are made for features like square footage, condition, lot size, upgrades, etc.  CMA's are a valuable tool to help determine your homes worth.   Call me anytime for a "Free Market Analysis" no obligation.

Seller 101