Getting the House Ready to Sell
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.
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.
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.
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 carpet freshener on the carpet on a periodic
basis.
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.
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.
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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.
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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 and companies expect to earn as a
commission. The percentage varies from region to region,
and depending upon whether it is residential real estate
or commercial real estate. 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 Duties of a Listing Agent
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.
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.
Resolution of Disputes
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.
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Types of Listings
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 Listing
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.
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Listing Commissions and Related Issues
About Commissions
In most areas there is a customary percentage that
real estate agents expect to earn as a commission. When
completing the listing agreement, you and your agent
will negotiate and agree on the amount of the real
estate commission.
When you agree to a commission with a listing agent,
you should keep in mind that there are usually two
agents involved in most transactions. Most of the time,
only part of the commission goes to the listing agent?s
company. The other portion goes to the company
representing the buyer.
Some commission-related questions you could
ask:
Will your property be listed in the Multiple Listing
Service? Being listed in the MLS expands your sales
force. Every agent is invited to bring potential buyers
to your property. This larger supply of buyers effects
your pricing power and the ability to sell your home
more quickly.
What is the effect on the company representing the
buyer? Since part of the commission usually goes to the
company representing the buyer, you may want to ask
whether that portion of the commission offers the
customary amount. As mentioned above, the more agents
that show your property, the more pricing power you have
and the more quickly your home will sell.
What is the effect on marketing? Very few properties
are sold through advertising or open houses, but it does
happen. Most often, those ads generate calls from
potential buyers or sellers, who end up as clients for
real estate agents and you want agents to bring
potential buyers to your property. Advertising your
property to other agents has a higher impact than direct
advertising to consumers.
Will you be tied in to other services? A real estate
company with bundled services has more income
opportunity which may allow them to offer lower prices.
However, there are a few companies whose additional
services are not priced competitively with opportunities
you can find on the open market. You should be sure to
ask lots of questions and determine whether you are
limited to certain choices or you have the freedom to
also explore the open market.
How and When Listing Commissions are 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 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.
Office Preview
If your listing agent belongs to a fairly sizable
office, an office preview will introduce your house to
other agents working in the same office. In effect, they
get a head start on selling your property. Once a
week, the office's agents will get together, share
vehicles, and caravan to all of the new listings. They
generally pull up in front of your house at about the
same time (some even use a bus) then file quickly
through your home like some bizarre follow the leader
game.
It can be amazing to watch.
They go through very quickly, since most of them are
familiar with similar models of your house. They are
usually looking for anything memorable or different and
to determine if your house is one they would be proud to
show their clients. Then they all pile back into their
cars and move on to the next house on the tour.
But some of them come back, with buyers.
Broker Preview
Broker preview is very similar to an office preview,
except it is open to all the members of the local
multiple listing service. It usually occurs within the
first week your house is placed on the market, just
after the office preview. However, there are lots of new
listings to choose from, and not all the agents preview
all the new listings each week. You may not get as many
agents visiting your home as there were on the office
preview.
Unless your agent entices them to come. This is
where you could provide some help, if you are so
inclined.
Though it may seem funny, nothing seems to attract a
real estate agent like the offer of free food. So if
your agent offers free eats? at a broker preview, you
are likely to get more visitors than if nothing is
offered. Realize that many agents have been on this
weekly circuit for years, so boring food does not
really accomplish much. In other words, sandwiches
supplied from the local grocery chain are not very
interesting.
If you want to help your agent sell your home
quickly, try and help them be creative and original in
the choice of a culinary treat.
Of course, some agents will actually come to look at
your house, too whether food is offered or not.
Maybe.
Office Flyers
Your agent will undoubtedly prepare flyers about your
property so that prospective homebuyers can be informed
about the attractive features of your house. These
flyers (or similar ones) should also be sent to all the
local real estate offices, too. Most areas have a weekly
flyer service that delivers advertisements to all of the
local offices. Since agents get these flyers every week,
they do not always look at them. However, a large
percentage of them do. Some agents will keep the flyer
and bring buyers to your house.
The flyer should be done professionally and photocopy
well. Ask your agent to show you copies of office flyers
they have done in the past.
Association Marketing Sessions
Your agent probably belongs to a local association of
Realtors and they often have meetings once a month. At
these meetings there is often a marketing session
where some agents stand up and tell about their listings
and other agents stand up and tell about their buyers.
Your listing agent has an opportunity to pitch your
house at these marketing sessions.
At the same time, these sessions may not be as
effective as they were in the past. One reason is that
they are often more social occasions than serious
business meetings. Another reason is that, as technology
has expanded, local associations have tended to merge
and create larger Multiple Listing Services and
Associations. Local meetings have become poorly attended
gatherings. Often the most professional agents do not
even attend.
Advertising in General
Every home seller likes to be assured that their
listing agent or the real estate company will run ads
featuring their home. Newspaper ads could be large
display ads with lots of listings or small classified
ads featuring just your property. Ads may also appear in
local real estate magazines and your listing will also
show up on the Internet.
Of course the agents and companies will run ads
featuring your house, but not for the reasons you
expect.
You see, the main job of advertising is not to sell
your house directly. Advertising creates phone calls and
some of those callers become clients of the agents
answering the calls. This builds up a pool of homebuyers
looking for property in general, all represented by
selling agents (buyer's agents). Multiply this by all
the agents and companies who also advertise homes, and
there is a large pool of homebuyers in the market at any
given time all of whom are represented by selling
agents.
The agents representing those homebuyers know about
your home because it is listed in the Multiple Listing
Service, has been on office and broker preview, and
because your agent may have also sent flyers to all the
local real estate offices.
The agents match up their clients with available
homes, one of which may be yours. Then they show the
homes to their clients, who eventually make an offer on
one. That is how your house gets sold.
Ads create a pool of clients, one of which buys your
home. Ads do not usually sell your house directly.
Real Estate Office Advertising
As mentioned previously, advertising your home in
newspapers and magazines rarely sells your home
directly. More likely than not, the buyer who eventually
purchases your home will have called on a totally
different house. The same thing happens with buyers who
call on your house. They will probably buy something
else.
You still want to be certain the real estate company
selling your house runs ads in the local and major
newspapers, whether they feature your house or not. The
ads generate phone calls to the real estate office, and
if those agents viewed your house on the office preview,
they will be familiar with it. This is how your property
is sold.
Or you could be one of the lucky ones someone
calling on your house may actually end up buying it.
You should also realize that when a company
advertises the homes they have for sale, there is more
than one objective. Sure, the real estate office wants
to generate phone calls and sell houses, but the
advertising also shows home sellers how effectively they
market properties. This impresses not only you, but
others who may be thinking of selling their home.
The advertising brings in more listings, which
generate more ad calls, which produces more buyers...
and that is how real estate advertising really works.
Individual Agent Advertising to Homebuyers
Individual agents may advertise your home for the
same reasons as companies do. They usually advertise in
classified ads or in specialty magazines featuring
houses available for sale.
As in other types of advertising, these ads rarely
sell your home. Once again, the main goals of
advertising are to accumulate homebuyers as clients, and
to impress you and future home sellers with how well
they market their listings. Some agents actually do sell
their own listings, but not that often.
It is much more productive and beneficial if your
listing agent directs most of his or her marketing
efforts toward other agents. Since this is behind the
scenes marketing that you don't actually see, it is
often difficult for you to measure how hard the agent is
working for you.
It is a mistake to measure your agent's effectiveness
solely by counting the number of newspaper and magazine
ads featuring your property.
Neighborhood Announcements
When you first list your home many agents send
announcements to all of the other houses in your
neighborhood. This can be done in the form of postcards,
a letter, or flyers left hanging on the front door.
These are important because your neighbors might have
friends who are looking to buy a house.
The announcements create word of mouth advertising,
which is the best kind.
Open Houses
An open house when your property is first placed on
the market can be very important, but not for the
reasons most homeowners think. Just like with
advertising, most visitors to open houses rarely buy the
house they come to look at. They may not even know the
price of your home when they stop by to visit they
probably just followed an Open House sign to your
door.
An open house performs a similar function to the
neighborhood announcements it lets all of your
neighbors know that your house is for sale, and it
practically invites them to come take a look.? Being
generally nosy, a lot of your neighbors will take
advantage of the invitation.
And they may tell their friends about your house,
creating more word of mouth advertising.
Of course, there are other reasons for holding open
houses, too. Listing agents who farm a particular
neighborhood use them as an opportunity to meet with
other local homeowners who will someday be selling their
home. Your agent may hope to list their homes in the
future.
Open houses held after your home has been on the
market awhile do not usually serve a useful purpose in
selling your home. Most of the neighbors already know
your house is for sale and open house visitors rarely
buy the homes they visit.
However, if you really want more open houses, your
listing agent may allow other agents to hold it open.
Open houses attract prospective homebuyers and agents
hope to convince some of those homebuyers to become
their clients.
Showing the House
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.
Try Not to 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.
Keep the House Tidy
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.
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The Listing Agent Preliminary Marketing of Your
Home
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 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 a 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.
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Listing information is deemed reliable but is not guaranteed accurate. All information is subject to change and should be independently verified. Texas Law requires all Real Estate licensees to give the following information about Brokerage Services: